Chile’s CMPC to Book $40 Million Loss After Shutting Paper PlantMatt Craze
Empresas CMPC SA, Chile’s second-largest forestry company, plans to close a newspaper mill in the country’s south because of rising power prices and said it will book a $40 million loss.
Shutting the Rio Vergara plant comes as its electricity contract is due to expire, which would lead to an increase in costs, the Santiago-based company said in a filing to Chile’s securities regulator today.
CMPC, owned by Chile’s billionaire Matte family, is shedding its worst performing unit as the company ramps up pulp processing in Brazil to meet rising demand from Asia. CMPC shares rose 1.7 percent to 1,500 pesos at 3:17 p.m. in Santiago, reducing a year-to-date decline to 13 percent.
“We did not want to close the mill, and have searched for options to keep Papeles Rio Vergara in operation,” Chief Executive Officer Hernan Rodriguez said in the statement. “Unfortunately, the economic reality of higher electricity prices made this impossible.”
The plant will continue to operate until Nov. 30. CMPC will offer a retirement program to the plant’s 202 workers and offer them jobs at the company’s other units, it said.