Tag Archives: AbitibiBowater

Resolute Forest Products (formerly known as AbitibiBowater) closed its Gatineau, Quebec operation in August 2010, laying off 330 employees.

The mill will reopen in June as a lower cost operation with just 1 paper machine and a co-generation power plant. Only 130 workers will be employed.

The newsprint will be sold in North American and overseas.

In 2011, with the hope their mill could reopen, the workers of the Gatineau mill (and the Dolbeau mill) agreed to reopen their contracts and change some elements of the contract with regards to the sub-contracting of mechanics and workshop functions.

No severance was paid to the workers in 2010 when the mill closed because the company was restructuring and under creditor protection.

Outlook for Resolute Forest Products other mills

At this time, President and CEO Richard Garneau does not foresee the reopening of any other of its closed mills.

Resolute Forest Products’ Thunder Bay, Ontario mill is said to be at the greatest risk for mroe downtime because its access is only to the North American market. As newsprint demand continues to fall, the uncertainty of the Thunder Bay’s paper mill grows.

Read more:
Gatineau paper mill reopens (Ottawa Business Journal)

The Newfoundland and Labrador Department of Natural Resources has issued an additional call for Expressions of Interest to develop the Central Newfoundland timber resource, a process that began with the closure of AbitibiBowater in 2009.

“A significant portion of the forest resource in central Newfoundland is open to development by the right proponent,” said the Honourable Tom Marshall, Minister of Natural Resources and Minister Responsible for the Forestry and Agrifoods Agency. “Since 2009 interested parties have come forward, however we have yet to find the initiative that is the best fit for industry, government and central Newfoundland.”

The EOI process will determine the level of interest that exists for sustainable opportunities focused on new timber processing facilities.

The department allocated a portion of the former AbitibiBowater timber in central Newfoundland to two integrated sawmills that traditionally rely on saw logs from Abitibi in order to maintain lumber production levels. Crown operators who traditionally had access to Abitibi fibre and logging contractors who were dependent on Abitibi for fibre were given allocations at their historic levels.

The unallocated wood supply that is available for industry development is 280,000m3/year. This wood is identified in the 25-year harvest schedule developed as part of the most recent provincial wood supply analysis. Road access has been established to many, but not all of these areas.

“Recently, a number of reputable forest products and energy companies have contacted the department and expressed interest in the resource,” said Minister Marshall. “Inquiries have focused on the availability of fibre and mill infrastructure to support such ideas as wood pellet plants, ethanol plants and raw pulp for export. To ensure the process is fair, it is important that we have an additional open call for those interested in submitting a proposal.”

Expressions of Interest will be accepted until 4:30 p.m. on March 28, 2013 and must be submitted in accordance with set terms and conditions. The Department of Natural Resources does not bind itself to any Expressions of Interest that may be submitted.

The terms and conditions are available on the Department of Natural Resources website at http://www.nr.gov.nl.ca/nr/

The Supreme Court of Canada has sided with AbitibiBowater (now Resolute Forest Products) over the environmental cleanup of its operations in Newfoundland and Labrador, including the former Grand Falls-Windsor mill.

AbitibiBowater/Resolute Forest Products will not be responsible for any environmental clean-up in the the province.

AbitibiBowater (and its predecessor companies) operated in Newfoundland  for over 100 years.   In 2008, AbitibiBowater announced it was closing the Grand Falls-Windsor mill, the last of its operations in the province.

The province expropriated the assets of the company to secure the timber and water assets, but argued AbitibiBowater should still be responsible for the environmental cleanup costs. There are 5 sites in Newfoundland that require environmental clean-up, including the Grand Falls – Windsor mill site.    3 of the sites were expropriated by the province.

The clean-up cost is estimated to be between $50-100 million.

AbitibiBowater was under creditor protection in 2009-2010.  The province wanted the Supreme Court to decide it a company’s environmental contamination responsibilities were extinguished under the Companies’ Creditors Arrangement Act like a commercial debt.

The Supreme Court ruled 7-2 against the province.

Read the Ruling:
Newfoundland and Labrador v. AbitibiBowater Inc. 2012 SCC 67

Read media coverage:
N.L. loses Abitibi case in Canada’s top court (CBC)
Canada’s top court says province can’t force insolvent company to clean up contamination (National Post)
AbitibiBowater wins Canada case on environmental cleanup costs (Reuters)
Supreme Court sides with Abitibi in environmental cleanup case (Globe and Mail)

Tomorrow the Supreme Court of Canada will rule on who is responsible for the environmental clean-up of the former paper mill in Grand Falls-Windsor, Newfoundland and Labrador.

Will the “polluter pays” laws result in Resolute Forest Products (formerly AbitibiBowater) being assigned responsibility?

Or will the province of Newfoundland and Labrador be on the hook because they expropriated the assets of the mill after the company announced the closure in March 2009.

Read more:
Supreme Court to rule in AbitibiBowater case (CBC)

The story behind the company vying for government money to open a wood pellet plant in AbitibiBowater’s old mill in Grand Falls-Windsor, Newfoundland is far from clear, but in the end it doesn’t matter – the provincial government has ended negotiations.

The CBC has looked into York Energy, the company that has been identified as the party interested in starting the pellet mill, and discovered a lot of mysteries.

The company claims to produce 120,000 metric tonnes of pellets at a plant in New Brunswick, but according to the CBC, no one seems to have heard of the company there, or their pellet operation.

Matthew Fox, of York Energy, told the CBC  the company was planning on investing $36 million in the old paper mill in Grand Falls-Windsor.

Fox said the province has abruptly cancelled negotiations and has killed the deal.

Read the story:
Pellet plan shot down for former Abitibi mill (CBC)

More coverage:
Talks With Company on Paper Mill End (VOCM)

The security guard at the former AbitibiBowater pulp and paper mill in Grand Falls-Windsor in Newfoundland feels it is time something is done with the old building.

The mill was a cornerstone of the community for over a century, but since the mill shut down in 2009, it has been left mostly abandoned.

The building is so hazardous now that no one is allowed in without a permit and anyone who does go in must be in contact with security staff with a radio and wearing a mask or respirator is recommended.

Water is said to be everywhere. Ceiling tiles, possibly containing asbestos, are falling off, and there is mold growing everywhere.

Security guard Kevin Whiffen said there isn’t enough water in most parts of the structure to be considered flooding, and that you can still walk around in just work boots. He said the only part of the mill he knows of where there has been flooding is in the wood room.

“There’s a basement there that’s about 15 feet deep, and we’re pumping that out all the time to keep the water down,” he said. “Over the winter now when it freezes over it’ll fill up a little bit…we might get three to four feet of water down there.”

Whiffen and the other security staff are employed by the provincial Department of Transportation and Works.  The Government of Newfoundland and Labrador assumed control of the property when it was expropriated.

The Supreme Court of Canada has yet to rule on whether the cleanup of the site will fall to AbitibiBowater (now Resolute Forest Products), or to the province.

Read more:
Deteriorating (Advertiser)
Old paper mill a hazard (CBC)

Grand Falls – Windsor mill, 2009

At AbitibiBowater‘s annual general meeting today, stockholders have approved renaming the company to “Resolute Forest Products” effective tomorrow – May 24, 2012.

As part of this change, stockholders also agreed to change the company’s common stock ticker symbol from ABH to RFP on both the New York Stock Exchange and the Toronto Stock Exchange.  RFP will begin trading on the New York Stock Exchange on May 24, and on the Toronto Stock Exchange on May 28.

Any impact this legal entity name transition may have for Resolute’s customers and business partners will be communicated directly to these parties over the coming days.

Also at the meeting today, 8 directors were elected for 2012:

• Richard B. Evans
• Richard D. Falconer
• Richard Garneau
• Jeffrey A. Hearn
• Bradley P. Martin
• Alain Rhéaume
• Michael S. Rousseau
• David H. Wilkins

Today the stockholders have also ratified the appointment of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for the 2012 fiscal year.

Source: Resolute Forest Products

AbitibiBowater Inc., doing business as Resolute Forest Products, has announced that its Board of Directors has authorized the repurchase of up to 10% of the company’s common stock for an aggregate purchase price of up to US$100 million. The repurchase program will be funded using the company’s available cash.

“We are taking advantage of our strong financial position to act on an attractive opportunity to return cash to shareholders,” said Richard Garneau, President and Chief Executive Officer. “The Company will continue to manage its capital with the utmost discipline, carefully balancing initiatives to return cash to shareholders with other considerations, such as pursuing sound capital investments and opportunities to further increase Resolute’s earnings power.  We are committed to enhancing shareholder value in the long term.”

The company is authorized to repurchase from time to time shares of its outstanding common stock on the open market or in privately negotiated transactions in the United States.

The timing and amount of stock repurchases will depend on a variety of factors, including the market conditions as well as corporate and regulatory considerations. The share repurchase program may be suspended, modified or discontinued at any time and the company has no obligation to repurchase any amount of its common stock under the program. The repurchase program has no set expiration date. The company intends to make all repurchases in compliance with applicable regulatory guidelines and to administer the plan in accordance with applicable laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

Source: Resolute Forest Products

AbitibiBowater Inc., doing business as Resolute Forest Products, has taken up and accepted for payment 1,633,800 additional shares of Fibrek Inc. deposited to its offer as of the close of business today.

Together with the shares the company acquired up to and including April 23, Resolute now has majority control of Fibrek, with approximately 50.1% of the currently outstanding shares.

As aggregate consideration for the shares taken up today, Resolute will distribute approximately 46,000 newly-issued shares of its common stock and CAD$900,000 in cash through RFP Acquisition Inc., a wholly-owned subsidiary.

Source: Resolute Forest Products

AbitibiBowater, doing business as Resolute Forest Products, is reporting a net income of $23 million in its first quarter of 2012, on sales of $1.1 billion.

These results can be compared to net income of $30 million on sales of $1.2 billion in the first quarter of 2011.

“Our balance sheet continued to strengthen despite seasonal softness and market headwinds,” said Richard Garneau, president and chief executive officer. “We demonstrated the discipline that sets us apart by taking market-related downtime to control finished goods inventory and by advancing annual pulp mill major maintenance to the first quarter from the second.”

Excluding $16 million of special items described below, net income for the quarter was $7 million. Net income excluding special items for the first quarter of 2011 was $10 million.

Special Items in first quarter, 2012

Special items incurred in the first quarter of 2012, net of tax, included:

• $15 million non-cash gain on translation of Canadian dollar net monetary assets
• $12 million gain on disposition of assets
• $4 million charge related to closure costs, impairment and other related charges
• $4 million of transaction costs related to the acquisition of Fibrek
• $3 million non-cash charge related to reorganization tax adjustments
• Income from other items, offset by a severance charge and post-emergence costs

Segment Details

Newsprint

The newsprint segment generated operating income of $21 million, a $5 million decrease from the fourth quarter of 2011. The decrease reflects a 9% seasonal reduction in shipments and the stronger Canadian dollar, largely offset by lower input costs, mainly recovered paper and power. The average transaction price remained unchanged and inventories were stable as the company took 85,000 metric tons of production downtime.

Coated Papers

Operating income in the coated papers segment was $14 million lower in the first quarter than in the previous quarter, resulting in an operating loss of $1 million. Shipments were stable but the average transaction price declined approximately $30 per short ton on weaker market conditions. Costs increased by $56 per short ton, primarily as a result of the annual maintenance outage in Catawba, South Carolina.

Specialty Papers

The specialty papers segment generated operating income of $15 million, down from $24 million in the previous quarter. Shipments were down 13% from the seasonally stronger fourth quarter and operating costs were higher due to a stronger Canadian dollar, offset in part by lower maintenance costs. The average transaction price remained stable, notwithstanding a decline in market demand to which the company responded with approximately 36,000 metric tons of production downtime.

Market Pulp

Operating loss in the market pulp segment was $21 million, compared to operating income of $12 million in the previous quarter. The average transaction price continued its downward trend, falling another $38 per metric ton in the first quarter. Results also included an $11 million charge for annual maintenance outages at two mills, including one advanced from a later quarter in light of softer demand. Shipments were essentially unchanged from the fourth quarter as the company took production downtime of over 77,000 metric tons.

Wood Products

The wood products segment reported an operating loss of $6 million in the first quarter, compared to a loss of $5 million in the fourth quarter. Shipments decreased by 8% over the same period, offsetting the $24 increase in average transaction price.

Outlook

“Our outlook for newsprint remains the same: despite modest secular decline in North America, we expect stable pricing, with continued weakness in Asian and European markets as long as the combination of lower ONP prices, a strong U.S. dollar and weaker euro continues,” said Richard Garneau. “We remain somewhat cautious in our outlook for pulp over the balance of the year, and we plan to complete the bulk of annual pulp mill maintenance in the second quarter. Pricing pressure in the specialty grades is building as a result of weak demand, especially in high gloss grades, but we expect the coated segment to recover as a result of recent price increase announcements by us and a number of our competitors. For their part, lumber markets are starting to reflect the gradual improvement in U.S. housing starts.”