West Fraser announced on Wednesday (4-5-22) that it will permanently reduce capacity at its pulp mill in Hilton, Alberta (“Hilton Pulp”) by the end of this year. One of Hinton Pulp’s two production lines will shut, and the remaining line will produce Unbleached Kraft Pulp (“UKP”) rather than Northern Bleached Softwood Kraft Pulp (“NBSK”).
Commenting on the capacity reduction, Ray Ferris, President and CEO of West Fraser said, “Hinton Pulp has been in operation since 1956 and these changes are necessary to simplify our operation, reduce capital requirements and greenhouse gas emissions, and better align with consumer expectations.”
“Our Hinton Pulp team has been engaged in a comprehensive review process and I want to thank them for their creativity and commitment to the mill, our customers, and the environment,” Ferris added. “We remain strongly committed to the community of Hinton, the future of the plant, and to our neighboring lumber operation, Hinton Wood Products.”
The capacity reduction will see staffing levels transition from 345 positions to 270. West Fraser expects to mitigate the impact on employees through natural attrition, retirements, and by offering employment opportunities at other West Fraser operations.
It is anticipated that an impairment charge of approximately US$13 million will be recorded in West Fraser’s Q1 2022 results associated with the write-down of equipment that will be decommissioned permanently as part of the transition to UKP.
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WEST FRASER’S HINTON PULP TO REDUCE PRODUCTION CAPACITY AND MOVE TO UNBLEACHED KRAFT PULP