More than 560 jobs will be lost in New Brunswick and Quebec as Smurfit-Stone Container Corp. said it will close down several paper products mills.
The Chicago-based company announced Thursday it will close its New Richmond, Que., linerboard mill and a corrugated paper mill in Bathurst. The company said 295 jobs will be cut in New Richmond, while 270 jobs will be lost in Bathurst.
"The packaging industry is undergoing swift changes, and Smurfit-Stone is in the process of assessing its entire asset base to determine how to stay ahead of the market," said Patrick Moore, Smurfit-Stone's chairman, president and CEO, in a release.
"While extremely difficult and painful, the decisions we have announced today are the first steps toward better positioning the company for future growth and success," he said.
New Brunswick Premier Bernard Lord said he learned of the closure just hours before the workers.
The premier said some of his ministers will meet with company and community leaders in hopes of resolving the situation.
But he said that there might not be anything they can do to change the company's mind, which made a decision it felt made economic sense.
"Businesses make these decisions for business reasons," said Lord. "We have to continue to work at making sure New Brunswick remains competitive."
The closure is a blow to the economy of Bathurst, since Smurfit-Stone was one of its major employers.
There's no word on what severence pay the 270 workers will get.
The New Richmond and Bathurst mills have an annual production capacity of 235,000 tons of linerboard and 243,000 of corrugating medium respectively. Both mills have been recently idled due to market conditions.
Smurfit-Stone also plans to permanently shut a paper machine at Fernandina Beach, Fla. The machine has been idle since April 2001.
Smurfit-Stone said demand is slowing for packaging in North America, as manufacturing is being shifted overseas. "We are in a mature industry that has struggled to achieve adequate returns," Moore said.
"We have been unable to pass along inflationary costs, such as energy and fiber, to our customers. In addition, the manufacturing exodus overseas has had a strong impact on containerboard demand throughout North America.
Last month, Abitibi-Consolidated announced plans to close several paper machines in Newfoundland and Ontario as it tries to cope with tough conditions in the paper sector.