Tag Archives: Cascades

Cascades Inc. is reporting improved results for its first quarter of 2012. Net earnings for the quarter were $6 million on sales of $891 million.

Commenting on the first quarter results, Alain Lemaire, President and Chief Executive Officer stated: “We announce today financial results which are a significant improvement over the previous quarter and the same period last year. This performance is below our expectations due to a low level of productivity of our Containerboard manufacturing operations. Our Tissue Papers Group continues to perform well and our Specialty Products Group shows improved results. During this past quarter, we benefited from lower recycled fibre costs and average selling prices have held for most of our products despite volatile demand. Continuing to implement our action plan, we have been particularly active with restructuring and capital allocation measures aimed at modernizing our operating units. The actions taken by our team reflect our commitment to improve profitability and efficiency in an increasingly competitive market.”

Looking ahead in the near-term, Lemaire added: “The economic environment remains difficult but seems to be gaining momentum in North America which is encouraging as we enter what have been historically our two strongest quarters of the year. We have identified and fixed certain of our operational issues which should enable operations to produce in line with usual standards. Moreover we are starting to see the benefits of the measures we have taken to improve our portfolio of assets, a good example being the Tissue Papers Group. In Europe, the economic uncertainty poses unique challenges in the short term but we believe we have the right platform to face this situation.

We will likely continue to face high variable costs and a strong Canadian dollar. After a slight increase in the beginning of the year, we expect the pricing environment for recycled fibre to be more favorable during the next quarter.”

Cascades’ Recent Strategic Initiatives

• Acquisition of the corrugated boxes converting and warehousing facilities of Bird Packaging Limited located in Ontario.
• Announcement of investments of $30 million and closures of three plants as part of the consolidation of our corrugated products sector in Ontario.
• Consolidation of our honeycomb packaging manufacturing operations with the announced closure of Cascades Enviropac in Toronto.
• Announcement of the closure of the Trenton containerboard mill effective June 1, 2012 due to financial losses and unsatisfactory labor relations.

Read Cascades’ full release

Cascades Inc. has announced the consolidation of its corrugated product plants in its Norampac division in Ontario.

The consolidation translates into an investment totalling in excess of $30 million in the Vaughan, St. Mary’s, Etobicoke, and Belleville plants, and the closure of the North York and Peterborough units, as well as the OCD plant in Mississauga.

“The purpose of this restructuring is to optimize the productivity in our corrugated product plants in Ontario and enhance customer service. These steps are in line with our regional development strategy, which includes the recent acquisition of three Bird Packaging plants,” explained Marc-André Dépin, President and Chief Executive Officer of Norampac.

As part of the strategic plan set in motion by Cascades, this consolidation aims to improve the group’s profitability in an increasingly competitive market. This decision is another step in a series of initiatives taken over the past years that seek to modernize the company’s assets. With this goal in mind, Cascades announced in June 2011, the construction of Greenpac Mill LLC, a lightweight containerboard mill located in Niagara Falls, NY.

Investment in the Corrugated Products Sector

With this investment of over $30 million, Norampac aims to modernize manufacturing equipment in the four Ontario plants and increase production capacity, profitability, as well as productivity.

“We are investing for the future by taking the necessary measures to strengthen our leadership in the market and demonstrate our commitment to our clients,” explained Mr. Dépin. “The Vaughan, St. Mary’s, Etobicoke and Belleville plants have the ideal infrastructure in which to incorporate new equipment with cutting edge technology, ranking them among the most competitive in Canada. These investments will enable us to provide clients with a wider variety of packaging products, increase the speed of execution and improve the quality of our products and services,” added Mr. Dépin.

Closure of Three Plants

In a competitive packaging market, which is strongly influenced by the strength of the Canadian dollar and enhanced competition from US manufacturers, Norampac has no choice but to reduce its operating costs through the closure of three corrugated product plants in Ontario.

“The decision to close the OCD, North York and Peterborough plants can be explained by a decrease in demand in the Canadian and North American corrugated products industry dating back to the beginning of the recession, as well as the large number of Norampac converting plants in Ontario. These factors, combined with adverse economic conditions, have forced us to restructure our assets in order to be more competitive” explained Mr. Dépin. The three operating units are scheduled to close at the end of 2012.

The OCD, North York and Peterborough plants are specialized in converting corrugated products. In preparation for the closures, production from these plants will gradually be redirected to other Norampac converting plants in the Province, which will continue to supply the plants’ clients with the same quality and services. Many of the 200 employees from the three plants will have the opportunity to transfer to other Norampac plants in Ontario.

“As was the case in Québec in 2010 and in the north-east of the United States in 2011, the consolidation of our Norampac operations in Ontario, to which we are adding significant investments to modernize our facilities, will allow us to optimize our assets in this region and improve Cascades’ performance,” added Mr. Dépin.

Source: Cascades Inc.

The Communications, Energy and Paperworkers Union of Canada (CEP) is calling on Norampac to stop “job blackmail and work with the union to save jobs and protect the local economy.”

The reaction comes after Cascades issued a news release today announcing the planned closure of its Norampac-Trenton mill, while in the middle of contract negotiations with the union.

Most of the 130 workers at the company’s Trenton mill are members of the Communications, Energy and Paperworkers Union of Canada. They voted yesterday to reject the employer’s contract offer, which contained “unacceptable concessions,” says Dave Moffat, CEP Administrative Vice-President, Ontario.

“We have been trying to negotiate with the company for the past year,” explains Moffat. “It’s been a complicated bargaining session, but we had hoped to continue working within the collective bargaining process, and not negotiate through the media.”

“Norampac employees, who have worked to build this mill up over the past decades, deserve better than this,” says Moffat, noting that the closure would also jeopardize dozens of spin-off jobs in the community.

“We would like the company to stop the job blackmail and work with us to save jobs and protect the local economy.”

Source: CEP

Cascades Inc. has just announced the closure of its Norampac containerboard mill located in Trenton, Ontario.

The closure announcement follows the rejection of the final offer made to the employees regarding the new collective agreement.

The closure of the mill will be effective no later than June 1, 2012.

Difficult negotiations for the renewal of the collective agreement took place from May 2011 to March 2012 between Norampac’s management and the CEP union, following which the two parties were unable to come to an agreement.

Marc-André Dépin, President and Chief Executive Officer at Norampac, declared: “We are deeply disappointed that the Norampac – Trenton employees have turned down a positive and reasonable offer.”

“Despite substantial investments made by Cascades/Norampac to help increase its profitability, the Trenton mill has incurred significant losses over the years. These losses, combined with unacceptable labour relations, have left us with no other choice but to close the mill,” added Mr. Dépin.

Nearly 130 employees will be affected by this closure.

The Norampac – Trenton facility produces corrugating medium and has an annual production capacity of 150,000 metric tons.

Source: Cascades

Rumours that the Norampac plant in Trenton, Ontario is about to be closed have been rampant for years.  After several years of layoffs, it appears the plant’s possible closure may be imminent (again).

Recent contract conciliation talks have broke down.  Senior officials from Norampac’s parent company, Cascades Inc., met with the workers today at the Trenton city hall.

Workers are represented by Local 1470 of the CEP.

The Trenton facility produces corrugated medium paper used in boxes.

Recent History

• November 2008 – 90 employee laid off
• January 2009 – 90 employees recalled
• February 2009 – plant is idled, 140 are laid off
• May 2009 – operations restart
• June 2009 – Norampac Trenton received $3.3 million to construct 2 high-efficiency wood residue boilers ($1.5 million from the Eastern Ontario Development Fund and $1.8 million from the Forest Sector Prosperity Fund)
• October 2010 – Norampac Trenton received $83,000 from the Government of Canada’s Pulp and Paper Green Transformation Program. Investment was earmarked to improve the energy efficiency of the mill’s existing paper machine by upgrading its capacity to capture and redirect energy for other uses within the mill
• June 2011 – all workers were given indefinite lay off notices
• August 2011 – 137 workers called back to work

Cascades Inc., a leader in the recovery and the manufacturing of green packaging and tissue paper products, has announced that its Norampac division has acquired Bird Packaging Limited‘s converting and storage facilities located in Guelph, Kitchener and Windsor, in Ontario. The financial terms of the transaction have not been disclosed.

According to Marc-André Dépin, President and Chief Executive Officer of Norampac, “This acquisition is beneficial to Norampac and Cascades as it will allow us to broaden our market reach in Ontario by integrating plants that benefit from an excellent reputation amongst their customers. In addition to a well-established customer base, Bird also has state-of-the-art equipment, a team of skilled people and a vast line of products and services that complement Norampac’s product offering”.

This investment is part of Norampac’s development strategy which aims at expanding its geographical presence in Ontario and relying on productive assets. Furthermore, Bird’s packaging products represent a compelling add-on to Norampac’s portfolio and will increase our competitiveness with an improved product offering.

“Our goal is to innovate and react promptly to our customers’ needs by offering innovative packaging solutions. The addition of Bird’s production plants to Norampac’s assets, in line with our strategic plan, will help us to reach our target with the expansion of our spectrum of products and services in terms of corrugated, high standards of printing and packaging solutions, just to name a few”, added Mr. Dépin.

Founded in 1975, Bird Packaging Limited is a family-owned business which employs 130 employees. It specializes in the fabrication of corrugated boxes of all sizes and grades, floor displays and products with high standards of printing.

Source: Cascades

Cascades Inc. has announced the permanent closure of Cascades Enviropac, located in Toronto.

Production at this unit, specialized in the manufacturing of Technicomb™ honeycomb packaging, intended primarily for the furniture packaging industry, will progressively be redirected towards the Cascades Enviropac Berthierville, Québec and the Grand Rapids, Michigan plants.

Approximately 36 employees will be affected by this closure which will be effective on June 1, 2012.

“The decision to cease operations at the Toronto plant is due to a significant reduction in business volume. This decision was taken to secure the group’s profitability and to improve its position as leader in the industrial packaging sector. Demand in the honeycomb packaging industry has been affected by challenging economic conditions over the past few years and it is imperative we adjust our operations based on this new economic environment. This initiative will enable us to maximize the operations at our mills of Grand Rapids and Berthierville, while continuing to offer a first-class product and service to our customers”, stated Luc Langevin, President and Chief Operating Officer of Cascades Specialty Products Group.

Cascades has taken the necessary measures to help employees affected by this closure relocate to other manufacturing units and provide them with assistance in their search for work.

Source: Cascades

Cascades Inc. has reported a loss of $19 million in the third quarter of 2011.

In the same quarter last year, Cascades reported a profit of $24 million.

Highlights of Cascades third quarter:

• Construction kick-off for the new, state-of-the-art, Greenpac containerboard mill
• Acquisition of the remaining 50% of the shares of Papersource, a leading tissue paper converter (effective in November 2011). This transaction should add more than $125 million to Cascades’ annual sales and have an immediate positive impact on net profitability.
• Closure of the Burnaby (British Columbia) containerboard mill and divestiture of the land and building for $20 million (effective in October 2011).
• Closure of the Le Gardeur corrugated box plant (effective in Q4 2011).
• Improved operating results compared to Q2 2011, in spite of the increase in average raw material costs and the production interruption following a flood in one of our tissue mills.
• 27% sequential increase ($17 million) in operating income before depreciation and amortization (EBITDA), excluding specific items.
• Significant F/X gains on working capital items and on our cash management following the divestiture of Dopaco.
• Almost fourfold increase in cash flow from operations in comparison to Q2 2011.
• Notwithstanding significant improved operating results compared to the previous quarter, net loss per share, excluding specific items, of $0.05 given tax adjustments of approximately $7 million.

Commenting on the third quarter results and recent strategic actions, Alain Lemaire, President and Chief Executive Officer stated: “Although we are still looking for stronger results, overall, we are encouraged by our performance during the past three months. For a second consecutive quarter, our operating results continued to move in a positive direction. Three of our four segments posted an improvement in their quarterly sequential financial performance, and the several proactive measures taken to address our lesser-performing units have continued to pay off.

Moreover, in the face of ever more volatile markets and economic conditions, we have continued to refine our strategic goals. In the coming quarters, we will pursue the implementation of initiatives aimed at improving our competitive position through enhanced productivity and profitability. The Greenpac containerboard mill, the acquisition of Papersource, the sale of our Burnaby mill and the closure of our Le Gardeur plant are prime examples of these measures. We are highly confident that these measures will have a positive impact on our financial performance on both the near and long term”.

Source: Cascades Inc.
Read full release

Once again, dangerous chemicals have been left behind in a closed paper mill with no power, no heat, and with winter approaching.

This time it is the Cascades/Thunder Bay Fine Papers/Superior Fine Papers mill in Thunder Bay, Ontario.

History of the Mill

The paper mill is 90 years old and sits on the shore of Lake Superior in Thunder Bay.

Cascades operated the mill from 1993 until 2006 when the company decided to close the mill due to unfavourable economic conditions.

The mill was purchased by Thunder Bay Fine Papers in 2008 for $1. With $45 million in government grants, loan guarantees, investments from local investors, and even $4.5 million from Cascades who decided to contribute to the mill’s start-up costs, the mill restarted in 2008.

The triumph was short lived. After operating for less than 3 months, the mill was idled.

A receiver took over the mill in October 2008, and Thunder Bay Fine Papers evaporated, leaving local business owed over $3 million. A local group of investors joined together to form Superior Fine Papers, and purchased the mill back from the receiver early in 2009, just as it was about to be sold for scrap to a recycling company.

Superior Fine Papers purchased the mill for $2.75 million. $750,000 was paid on closing, and the remaining balance was made payable by a promissory note for $1.75 million, repayable 6 months after closing by a vendor-take-back mortgage.

In July 2009, the Ontario Ministry of the Environment notified Superior Fine Papers, and the former owners of their facility – Thunder Bay Fine Papers and Cascades, that they were required to make immediate repairs to the mill’s industrial sewage works. They were concerned with a crack in the berm wall of the lagoon that could allow sludge and waste water to enter Lake Superior.

Superior Fine Papers, Thunder Bay Fine Papers, and Cascades jointly launched an appeal against the work order.

Why did all 3 companies appeal the environmental work order?

Cascades Fine Papers argued that it was no longer responsible for the Facility, having sold it almost two years prior, and subsequently paying Thunder Bay Fine Papers $500,000 to discharge Cascades Fine Paper’s responsibilities in relation to dredging the lagoon. And their parent company, Cascades Inc., claimed they were not responsible because they didn’t own the mill, Cascades Fine Papers did.

Superior Fine Papers argued that they could not take care of any environmental concerns because they did not have the financial ability to pay for any of the work.

All of Thunder Bay Fine Papers assets were distributed when the company was bankrupt, so no funds would be available for the environmental clean-up.

Environmental Tribunal Decision

An environmental review tribunal decided in May 2011 that the environmental concerns of the idled Thunder Bay Fine Papers mill are the responsibility of its former owners: Superior Fine Papers and Cascades Fine Papers Group.

The tribunal found significant environmental risks at the site, in particular:

• threat of breach of the berm
• possibility of another fire in the bark pile
• presence of significant volumes of dangerous chemicals both inside the mill building and in outdoor storage tanks

Until these risks are permanently addressed, the electricity must be kept on, and two security guards must secure the site at all times.

Superior Fine Papers says it can’t pay

Superior Fine Papers said it wasn’t purposely not complying with the orders from the Ministry of the Environment, but they were not in a financial situation to comply. The power company would not reconnect their electricity without a financial guarantee, the company could only afford one security guard, and the company was not in a financial position to hire a consultant to carry out the environmental orders.

Superior Fine Papers said they are not able to sell their assets to pay for the environmental clean-up because they still had a mortgage on the property for $1.96 million.

Even if the mill was sold for scrap (estimated to be worth $3.5 million in scrap metal), the Director’s orders requested the company to contribute $5 million in financial assurance towards the clean-up, so they would still not have enough money.

The environmental tribunal in May 2011 discussed that while Superior Fine Papers was crying poor, it had received nearly $700,000 in tax rebates from the city of Thunder Bay, and had spent only $100,000 of that money on environmental clean-up.

The Truths behind Superior Fine Papers

The Director of the Ministry of the Environment said in May 2011 that there was no way it was going to let Superior Fine Papers off the hook for all the environmental clean-up responsibilities just because it said it was too poor.

And here are some of the reasons why:

• Superior Fine Papers is a company backed by sophisticated business people who have loaned it a total of roughly $2.1 million (yet all remain anonymous)
• These business people were investors in Thunder Bay Fine Papers and, therefore, well aware of the environmental issues associated with the site and with the business risks associated with the business
• Andrew Sinclair, President of Superior Fine Papers, while working for his father’s company EKT90, did work on the mill for Thunder Bay Fine Papers to make the mill operational again
• Andrew Sinclair was then himself CFO of Thunder Bay Fine Paper for a brief period before it went into receivership, and therefore presumably aware of the financial risks associated with the business
• The Sales Information Package prepared by the receiver for Thunder Bay Fine Papers, highlights the environmental risks associated with the Site and emphasizes that the site is to be sold “As is, where is”
• The Sales Information Package refers to a Phase I environmental assessment report, yet Superior Fine Papers never requested a copy of the report prior to purchasing the site and, apparently, never did any environmental due diligence of its own, despite its knowledge of the environmental issues on the site.
• Superior Fine Papers own business plan highlights environmental risks associated with the site and notes the failure of the two previous owners of the mill – Cascades and Thunder Bay Fine Papers – to make money running the mill
• Superior Fine Papers purchased the mill and associated assets on an “As is, where is” basis, knowing that it needed a further $35 million in financing to resume operations, and knowing that it did not have sufficient cash in hand to address the environmental problems on the site, even by its own estimates
• Superior Fine Papers did stand to gain financially if it managed to make a go of the operation

What are Cascades Responsibilities?

Cascades, as former owner of the site, has been ordered to:

• Remove the bark pile waste and restore the site in that vicinity
• conduct the geotechnical assessment and monitor the Lagoon berm until this assessment has been completed

Cascades was not required to provide money as financial assurance the work will be completed because the tribunal found no reason that would suggest Cascades would not comply.

Cascades was found to be not responsible for maintaining the site now, including the electricity and security. Cascades removed all hazardous chemicals from the site before selling the mill to Thunder Bay Fine Papers.

And Now What?

It’s been over two years since the environmental orders were issued to Superior Fine Papers.

After an extension had been given, the chemicals were to have been removed from the Superior Fine Papers site by October 31, 2011 but the Ontario Ministry of the Environment said this has not happened.

“This in fact is a very serious matter,” said Lisa Brygidyr, spokesperson for the Ministry of the Environment.
“Its especially worrisome with winter temperatures arriving soon. If they are in portions of the mill that are not being heated, there is a concern if the chemicals freeze, the containers could crack and there could be a spill,” she said.
“The chemicals need to be removed in order to protect a risk to the environment and to Lake Superior.”

Last year the buildings storing the chemicals were heated through the winter.

The Ontario Ministry of the Environment is currently evaluating the current options and repercussions for Superior Fine Papers for not cleaning up the site. Brygidyr said it is possible the Ministry will put out a tender for cleanup, and will give the bill to Superior Fine Papers.

Sources:
Previous ForestTalk.com coverage of Thunder Bay Fine Papers
Previous ForestTalk.com coverage of Superior Fine Papers
Response to Superior Fine Paper’s Appeal to the Provincial Officer’s Order – July 24, 2009(link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – September 11, 2009 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – November 10, 2009 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – November 23, 2009 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – December 10, 2009 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – December 22, 2009 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – April 26, 2010 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – May 20, 2011 (link)
Environmental Review Tribunal – Superior Fine Papers Inc. v. Director, Ministry of the Environment – August 25, 2011 (link)
Cleanup incomplete (TbNewsWatch)

Cascades is continuing to consolidate its operations, by announcing the closure of its Norampac plant in Le Gardeur, Quebec.

The Le Gardeur plant is specialized in the conversion of corrugated products, and has annual revenues of $8 million.

In preparation for this closure, the plant’s operations will be redirected progressively towards the other Norampac Québec based plants that already serve the greater Montreal region.

Nearly 50 employees will be affected by this closure that will be effective before the end of 2011.

“The decision to cease operations at the Le Gardeur plant can be explained by the necessity to continue the consolidation of our Québec operations. In fact, the demand in the Canadian corrugated industry has been affected by unfavorable economic conditions for the past few years and it is imperative that we make the adjustments to take into account this new reality. This initiative will therefore allow us to optimize our production in the province, reduce our costs, improve our profitability, while continuing to offer quality services to our customers”, said Marc-André Dépin, President and Chief Executive Officer of Norampac.

In order to help employees affected by this closure, Norampac has prepared a relocation program throughout its other facilities and will offer assistance regarding employment searches.

Source: Cascades