2023-04-25 20:18:15
The Cascades company announced on Tuesday that it wanted to concentrate the majority of its fabric product production activities around main sites “well positioned geographically”.
“These changes will reduce costs, create synergies and significantly improve the financial, operational and environmental performance of the Tissue Group,” the statement said.
“With a smaller number of sites, a better allocation of resources and a good commercial strategy, we believe that Cascades will be in a better position to create more value for its shareholders and its customers. I am convinced that the actions taken today will allow us to achieve our objectives of improving the performance of the Tissue Group,” said Cascades President and Chief Executive Officer, Mario Plourde.
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In total, the nominal annual capacity of the equipment to be closed is 92,000 short tons of paper and 10 million cases annually. In 2022, this equipment produced 56,000 short tons and 5 million cases, mainly on the American West Coast.
A portion of this production will be absorbed by the available capacity in other facilities and by the increase in site productivity, particularly in the United States. Cascades will also have the option of possibly redeploying the seven conversion lines impacted by this decision to other sites.
“This announcement lays the foundations for a simplified and sustainable production model that will better meet the growth aspirations of our customers and Cascades,” said Tissue Group President and Chief Operating Officer Jean-David Tardif. .
Closure costs, including severance pay, are approximately $20-25 million.
The 300 employees affected by the closure of these factories will have the possibility of being relocated to other business units on American soil. For those who cannot or do not want this option, the company will offer them support in finding another job.
“This decision was not easy to make but it is the right one for the future of the company. I would like to sincerely thank our impacted employees and I hope that many of them will be able to stay with Cascades,” added Mr. Tardif.
When publishing the financial results for the first quarter of 2023 on May 11, Cascades will provide more details on the impact of this announcement in relation to the objectives set in the 2022-2024 Strategic Plan.
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