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MONTREAL — Abitibi-Consolidated is shutting down its Fort William paper mill in Thunder Bay, Ont., cutting 353 jobs.
The forestry company said Tuesday it's idling the plant indefinitely to reduce costs as paper prices remain low and production costs stay high. The mill will be shut on Sunday.
Of the jobs to be cut, 265 are employees at Fort William and 88 are part of Abitibi's woodlands operations in the area.
“In spite of the efforts of our people to identify and implement opportunities for cost reductions, current market conditions, combined with high production costs, have led to this difficult but necessary action,” Alain Grandmont, senior vice-president for commercial printing papers, said in a statement.
The company said it will keep an eye on market conditions to see if the mill can be reopened later.
The mill has an annual production capacity of about 145,000 tonnes of commercial printing papers.
It has been shut down frequently over the past six months and the company tried to sell it but could not find a buyer.
The shutdown comes ahead of a planned merger between Abitibi-Consolidated and Bowater Inc. to create North America's third-largest publicly traded paper and forest products company.
The Abitibi-Bowater union is expected to generate $250-million in synergies that will transform the new company into a profitable business after each company reported losses.
The synergies are based on cost reductions that aren't predicated on any mill closures. The merger is expected to close in the fall, subject to regulatory approval.
Abitibi shares gained two cents to $3.59 in early trading Tuesday on the Toronto Stock Exchange.
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