TORONTO, Oct. 21, 2019 /PRNewswire/ - Norbord Inc. (TSX
and NYSE: OSB) today announced that effective mid-November, it will
indefinitely curtail production on Line 1 of its two-line oriented
strand board (OSB) mill in Cordele,
Georgia until further notice.
Cordele Line 1 has been operating on a reduced 10/4 operating
schedule since early September. Cordele Line 2 will continue to
operate on a full production schedule.
The Cordele Line 1 indefinite curtailment is due to continued
poor market conditions and lower-than-anticipated OSB demand
to-date, particularly in the South East region. These conditions no
longer support the economic operation of Line 1 at this time. The
indefinite curtailment will ensure Norbord continues to only
produce what the company can sell, in the most efficient and
cost-effective manner.
"This is a difficult decision and a very disappointing outcome,
but it reflects the economic realities facing our business," said
Peter Wijnbergen, Norbord's President & CEO. "We have an
experienced, hard-working team at Cordele and we thank them for their commitment
to the company, our customers and our suppliers."
Norbord will continue to serve its customers without disruption
from Cordele Line 2 and from its other operating OSB mills in
North America. The Cordele, Georgia mill has two production lines
and a total stated annual production capacity of 1,040 million
square feet (MMsf) (3/8-inch basis). The indefinite curtailment of
Line 1 will affect 440 MMsf (3/8-inch basis) or 42% of the
mill's available capacity (6% of Norbord's North American OSB
capacity). Approximately 45 employees will be impacted by this
curtailment.
As a result of this curtailment, the Company will record a
non-cash impairment charge of $10
million (pre-tax) against the carrying value of the
Cordele mill's fixed assets as
part of its third quarter 2019 earnings results.
Norbord Profile
Norbord Inc. is a leading global manufacturer of wood-based
panels and the world's largest producer of oriented strand board
(OSB). 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 2,500 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," "pro forma," "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. Factors that could
cause actual results to differ materially from those contemplated
or implied by forward-looking statements include: assumptions in
connection with the economic and financial conditions in the US,
Europe, Canada and globally; risks inherent to product
concentration and cyclicality; effects of competition and product
pricing pressures; risks inherent to customer dependence; effects
of variations in the price and availability of manufacturing
inputs, including continued access to fibre resources at
competitive prices; availability of rail services and port
facilities; various events that could disrupt operations, including
natural or catastrophic events and ongoing relations with
employees; impact of changes to, or non-compliance with,
environmental regulations; impact of any product liability claims
in excess of insurance coverage; risks inherent to a capital
intensive industry; impact of future outcomes of tax exposures;
potential future changes in tax laws; effects of currency exposures
and exchange rate fluctuations; future operating costs,
availability of financing, impact of future cross-border trade
rulings or agreements; ability to implement new or upgraded
information technology infrastructure; impact of information
technology service disruptions or failures; and other risks and
factors described from time to time in filings with Canadian
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 January 31, 2019 Annual Information Form and the
cautionary statement contained in the "Forward-Looking Statements"
section of the 2018 Management's Discussion and
Analysis dated January 31, 2019 and
Q2 2019 Management's Discussion and Analysis dated July 31, 2019.
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SOURCE Norbord Inc.