Abitibi-Consolidated Announces Further Actions to Lower Costs
December 10 2003 - 8:43AM
PR Newswire (US)
Abitibi-Consolidated Announces Further Actions to Lower Costs -
Indefinite idling of Lufkin, Texas and Port-Alfred, Quebec paper
mills - $125 million reduction in operating costs MONTREAL, Dec. 10
/PRNewswire-FirstCall/ -- Abitibi-Consolidated Inc. (TSX: A, NYSE:
ABY) today announced a continuation of its focused downtime
strategy by indefinitely idling the Company's Lufkin, Texas and
Port-Alfred, Quebec paper mills, as of December 14, 2003. These
actions with improved operating efficiencies will reduce annual
operating costs by at least $125 million. The Company will begin
2004 with more than a million tonnes of focused downtime. Despite
these announcements, the Company anticipates selling as much, if
not more, product in 2004 than in 2003. > "We continue to work
through an oversupplied market. Additionally, the high-cost
structure of Port-Alfred has been further exacerbated by the rapid
rise of the Canadian dollar, while energy-related costs have
jeopardized the cost position of our Texas paper mill operations,"
stated President and CEO John Weaver. "Considering the current
consumption levels for North American newsprint, today's decisive
actions are necessary and consistent with our focused downtime
strategy. This is a difficult decision and we regret the impact on
our employees, but it is essential that we take these steps in
order to bring the Company back to a sustained level of
profitability as quickly as possible, while maintaining the
production flexibility needed for the future." A provision for
closure costs amounting to $64.5 million ($42.4 million after-tax)
will be taken in the fourth quarter of 2003. This announcement
affects 580 employees at the Lufkin mill and 640 employees at the
Port-Alfred mill. The Company also announced today the closure of
two previously idled paper machines, one in Port-Alfred and one in
Sheldon, representing a combined annual capacity of 230,000 tonnes
of newsprint. A fourth quarter write-down of $69.3 million ($42.8
million after-tax) will be taken to reflect this action.
Abitibi-Consolidated remains committed to customer service and
delivery of a high-quality product. The Company will work closely
with its customers to offer a smooth transition.
Abitibi-Consolidated is the world's leading producer of newsprint
and value-added paper as well as a major producer of wood products,
generating sales of $5.1 billion in 2002. With 16,000 employees,
the Company does business in more than 70 countries. Responsible
for the forest management of 18 million hectares,
Abitibi-Consolidated is committed to the sustainability of the
natural resources in its care. The Company is also the world's
largest recycler of newspapers and magazines, serving 17
metropolitan areas with more than 10,000 Paper Retriever(R)
collection points. Abitibi-Consolidated operates 27 paper mills, 21
sawmills, three remanufacturing facilities and one engineered wood
facility in Canada, the US, the UK, South Korea, China and
Thailand. FORWARD-LOOKING STATEMENTS This press release includes
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on certain assumptions and analyses made by
the Company in light of its experience and its perception of future
developments. However, these forward-looking statements are subject
to a number of risks and uncertainties, many of which are beyond
the control of the Company and the entities in which it has equity
interests. There can be no assurance that the actual results and
developments anticipated by the Company will be realized, or that
they will have the expected consequences to the Company and the
entities in which it has equity interests. The Company disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. DATASOURCE: ABITIBI-CONSOLIDATED INC. CONTACT:
Investors: Lorne Gorber, Manager, Investor Relations, (514)
394-2360, ; Media: Marc Osborne, Manager, Corporate Communications,
& Media Relations, (514) 394-2340,
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