• August 2, 2012
• By Jim Johnson

Catalyst Paper Corp. is permanently closing the Snowflake recycled paper mill in northeastern Arizona at the end of September.

The site, which was once solely a recycled newsprint operation, had been redesigned to also make higher value specialty papers.

But Richmond, British Columbia-based Catalyst indicated the decision to close was made "in the face of intense supply input and market pressures."

Newsprint demand has fallen more than 10% annually since the end of 2008, the year Catalyst acquired the mill. That, coupled with old newsprint price volatility and higher freight costs, made the mill unprofitable, the company said.

"Reduced quality of ONP as municipalities moved to single stream waste recovery combined with ONP price volatility driven by export markets were obstacles on the input side, CEO Kevin J. Clarke said in a statement. "Added to these challenges are the protracted demand decline for recycled newsprint and other printing papers. While we did everything possible to prevent this outcome, employees, vendors and customers needed the certainty that today's announcement provides."

News of the mill's closure comes as Catalyst continues to restructure under creditor protection in both Canada and the United States.

The Snowflake mill previously was owned by AbitibiBowater Inc., which sold the site to Catalyst in 2008 for $161 million. That company purchased the site in 1998, when it was known as Abitibi-Consolidated Inc., from another well-known company in paper recycling business, Stone Container Corp., for $250 million. AbitibiBowater recently changed its name to Resolute Forest Products.

 

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