TORONTO, March 25, 2020 /PRNewswire/ - Norbord Inc. (TSX
and NYSE: OSB) today announced that effective March 30, it will commence reducing production
across its portfolio of North American oriented strand board (OSB)
mills in response to the demand impact of the COVID-19
pandemic.
The Company will adjust its operating configuration by reducing
shifts and running a number of its North American mills on
alternating schedules to match production with an anticipated
reduction in OSB demand and to comply with government-imposed
restrictions. This approach will allow the Company to continue to
serve its customers, retain operating flexibility and preserve jobs
for as many employees as is practicable, while at the same time
being prepared to quickly resume normal operations when economic
conditions improve.
This adjusted operating configuration will initially result in a
25% reduction to Norbord's currently operating North American mill
capacity. The OSB demand situation is changing day-by-day, and the
Company's ability to continue to operate any of its mills could be
influenced by factors outside Norbord's control, including
government-imposed restrictions, therefore additional operating
adjustments may be necessary. The Company does not intend to
provide further operational updates unless there is a significant
change in this curtailment strategy.
Norbord's European business is prepared to take similar action
and will adjust mill operating schedules as needed to match
production with demand.
In addition, the Company is deferring non-critical capital
projects and further reducing its 2020 capital expenditures budget
by 25%, from US $100 million to US
$75 million, to preserve cash and
balance sheet flexibility.
"These are extraordinary times and difficult decisions, but they
reflect the uncertainties facing businesses around the globe," said
Peter Wijnbergen, Norbord's President & CEO. "Of utmost
importance, our first priority remains the health and safety of our
employees, and in response we have been implementing a number of
measures across our operations to mitigate potential exposure to
COVID-19. Further, we believe that reducing operating schedules
across our mills gives us the best flexibility to adapt to the
ever-changing demand landscape while still meeting our customers'
needs, reducing hardship on our employees and ensuring we are
prepared for a return to growth when markets normalize."
Norbord Profile
Norbord Inc. is a leading global manufacturer of wood-based
panels and the world's largest producer of oriented strand board.
In addition to OSB, Norbord manufactures particleboard, medium
density fibreboard and related value-added products. Norbord has
assets of approximately $1.9 billion
and employs approximately 2,400 people at 17 plant locations in
the United States, Canada and Europe. Norbord is a publicly traded company
listed on the Toronto Stock Exchange and New York Stock Exchange
under the symbol "OSB".
This news release contains forward-looking statements, as
defined by applicable securities legislation, including statements
related to our strategy, projects, plans, future financial or
operating performance and other statements that express
management's expectations or estimates of future performance.
Often, but not always, forward-looking statements can be identified
by the use of words such as "set up," "on track," "expect,"
"estimate," "forecast," "target," "outlook," "schedule,"
"represent," "continue," "intend," "should," "would," "could,"
"will," "can," "might," "may," and other expressions which are
predictions of or indicate future events, trends or prospects and
which do not relate to historical matters identify forward-looking
statements. Forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Norbord to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements.
Although Norbord believes it has a reasonable basis for
making these forward-looking statements, readers are cautioned not
to place undue reliance on such forward-looking information. By its
nature, forward-looking information involves numerous assumptions,
inherent risks and uncertainties, both general and specific, which
contribute to the possibility that the predictions, forecasts and
other forward-looking statements will not occur. These factors
include, but are not limited to: (1) developments related to
COVID-19, including health and safety measures instituted to
protect our employees, government-imposed restrictions that may
apply to our operations, the impact of COVID-19 on customer demand,
supply and distribution and other factors; (2) assumptions in
connection with the economic and financial conditions in the US,
Europe, Canada and globally; (3) risks inherent to
product concentration and cyclicality; (4) effects of competition
and product pricing pressures; (5) risks inherent to customer
dependence; (6) effects of variations in the price and availability
of manufacturing inputs, including continued access to fibre
resources at competitive prices and the impact of third-party
certification standards; (7) availability of transportation
services, including truck and rail services, and port facilities;
(8) various events that could disrupt operations, including
natural, man-made or catastrophic events and ongoing relations with
employees; (9) impact of changes to, or non-compliance with,
environmental or other regulations; (10) government restrictions,
standards or regulations intended to reduce greenhouse gas
emissions; (11) impact of weather and climate change on Norbord's
operations or the operations or demand of its suppliers and
customers; (12) impact of any product liability claims in excess of
insurance coverage; (13) risks inherent to a capital intensive
industry; (14) impact of future outcomes of tax exposures; (15)
potential future changes in tax laws, including tax rates; (16)
effects of currency exposures and exchange rate fluctuations; (17)
future operating costs; (18) availability of financing, bank lines
and/or securitization programs; (19) impact of future cross-border
trade rulings or agreements; (20) implementation of important
strategic initiatives and identification, completion and
integration of acquisitions; (21) ability to implement new or
upgraded information technology infrastructure; (22) impact of
information technology service disruptions or failures; and (23)
changes in government policy and regulation.
The above list of important factors affecting forward-looking
information is not exhaustive. Additional factors are noted
elsewhere, and reference should be made to the other risks
discussed in filings with Canadian and US securities regulatory
authorities. Except as required by applicable law, Norbord does not
undertake to update any forward-looking statements, whether written
or oral, that may be made from time to time by, or on behalf of,
the Company, whether as a result of new information, future events
or otherwise, or to publicly update or revise the above list of
factors affecting this information. See the "Caution Regarding
Forward-Looking Information" statement in the February 4, 2020 Annual Information Form and the
cautionary statement contained in the "Forward-Looking Statements"
section of the 2019 Management's Discussion and
Analysis dated February 4,
2020.
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SOURCE Norbord Inc.