KINGSEY FALLS, Que. — Cascades Inc. plans to shut down its folding carton plant in Montreal and transfer its customers and equipment to other plants, the Montreal-based forestry giant said late Monday.
About 118 employees will be affected by the closing at the end of the first quarter next year as the company reorganizes its folding carton converting operations.
The plant is on Pierre de Coubertin Street in east-end Montreal near the Olympic Stadium.
Cascades said its boxboard group will transfer customers and the equipment to other folding carton plants in Quebec, Ontario, Manitoba and the United States.
Monday's shutdown comes a week after Cascades struck a $560-million cash deal to buy out its joint venture partner Domtar Inc. in Norampac Inc., Canada's largest cardboard producer.
With 100 per cent ownership of Norampac, Cascades is turning its attention towards becoming more efficient in its overall packaging business.
“Despite significant efforts to reduce costs and improve productivity over the past two years, this decision is unfortunately the solution that is called for in order to cope with the difficult folding carton market conditions in North America,” said Eric Laflamme, president and chief operating officer of the company's North North American boxboard operations.
“The consolidation of our assets will enable us to reduce our operating costs and increase our flexibility and efficiency, while continuing to offer much higher quality products and service to our customers. The transfer of certain equipment will enable us to continue upgrading and computerizing our other plants."
Cascades said the cost of the plant shutdown as well as the transfer of equipment will be financed primarily by the sale of the plant's property.
Cascades produces and sells packaging, tissue paper and fine papers, mainly from recycled fibres. The company employs nearly 14,300 people at plants in North America and Europe.
The shutdown announcement came after the close of stock trading Monday. Earlier, the company's shares rose three cents to close at $13.23 on the TSX.
