Largest Newsprint Maker Cuts Back in `Challenging' Marketby and
Resolute Forest Products shutting machine in Augusta, Georgia
Company says newsprint market vulnerable to strong dollar
Resolute Forest Products Inc., the world’s largest maker of paper used in newspapers, is cutting capacity in the U.S. amid a "challenging" market and a stronger dollar.
The Montreal-based company will close one of its machines in Augusta, Georgia, that makes newsprint, as the low-grade paper is called. The move will incur a net expense of about $20 million, Resolute said Thursday in its first-quarter earnings statement.
The shutdown comes even as newsprint prices have rebounded in 2016 after falling for the past give years. Resolute said in February it was raising U.S. prices by $40 a ton, its first increase in almost six years.
"Despite the improved market conditions in newsprint, the underlying fundamentals and currency environment remain challenging for some U.S. mills," Chief Executive Officer Richard Garneau said Thursday on a conference call.
The Augusta plant has two newsprint machines, 256 workers and an annual production capacity of 408,000 metric tons, according to the company’s website. Resolute makes newsprint at 10 North American plants and at one South Korean facility, supplying the raw material to publishers in almost 80 countries.
Resolute posted a first-quarter loss excluding one-time items of 20 cents a share, compared with the 21-cent average of five analysts’ estimates compiled by Bloomberg. The shares dropped 6.9 percent to $5.05 in New York.