Resolute idles Calhoun, Tenn., pulp and paper operations indefinitely
By CFI staff
By CFI staff
A year of operating in the red has led Resolute Forest Products to indefinitely idle its Calhoun pulp and paper operations in Tennessee.
Tissue manufacturing and converting will continue on site, and the company’s adjacent distribution centre will remain in full operation.
The facility employs 545 people and can produce yearly 147,000 metric tons of pulp, 149,000 metric tons of paper, and 60,000 metric tons of premium tissue.
“We have taken the very difficult decision to indefinitely idle pulp and paper operations at Calhoun knowing how hard this is for the affected employees and their families,” said Remi G. Lalonde, Resolute’s president and chief executive officer. “Success has proved elusive at Calhoun’s pulp and paper operations, despite the best efforts of our dedicated employees and significant investments of time, energy and resources over the last few years.”
According to the company’s news release on the idling, the Calhoun facility is losing money despite a favourable market for pulp and paper.
From September 2020 to September 2021, the operation racked up a $62-million operating loss before corporate expense allocation, including a depreciation expense of $10 million. The operations also faced significant production upsets over the past month and a half.
The shutdown process will see pulp and paper operations continue for up to two months.
“Our focus now will be to support our employees through this difficult time, to operate for the remaining period with the same degree of focus on safety and quality, and to facilitate a smooth transition for our customers,” Lalonde said.
“As business conditions for our tissue operations continue to improve after a challenging 2021, our priorities remain focused on driving performance progress to leverage the full potential of our converting operations and the quality of the paper from the machine, together with the right customer mix, to seize the upside, even as the lost integration benefit will add to pulp costs,” he said.