ABH (NYSE, TSX)
MONTREAL, Feb. 14 /PRNewswire/ - AbitibiBowater announced today that it will permanently close its paper machine at its Coosa Pines, Alabama operation and cease its pilot project to manufacture recycled lightweight and ultra lightweight packaging and linerboard grades within the next 30 days. AbitibiBowater remains committed to its fluff pulp assets at the facility.
"Coosa Pines has made progress in the production of recycled lightweight and ultra lightweight packaging and linerboard. Upon review, however, the substantial capital investment that would be required at the site to make it low-cost in these grades could not be justified," stated Richard Garneau, President and Chief Executive Officer.
The Company estimates it will incur cash closure costs of approximately $4 million related to severance and other closure charges as a result of the permanent closure of the paper machine at the Coosa Pines mill. The majority of these closure costs will be paid during the first half of 2011. A non-cash asset charge of approximately $10 million will be taken to reflect this permanent closure. Approximately 150 employees are affected by this closure.
"The decision to cease paper production at the Coosa Pines mill was difficult as we are mindful of the impact it will have on affected employees," added Garneau. "The Company also remains committed to customer service and delivery of high-quality products and will work closely with customers to ensure a smooth transition."
AbitibiBowater is a global leader in the forest products industry, producing a diverse range of products, including newsprint, commercial printing papers, market pulp and wood products. The Company owns or operates 18 pulp and paper mills and 24 wood products facilities located in the United States, Canada and South Korea. Marketing its products in more than 70 countries, AbitibiBowater is also among the largest recyclers of old newspapers and magazines in North America, and has third-party certified 100% of its managed woodlands to sustainable forest management standards. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange.
Statements in this news release that are not reported financial results or other historical information of AbitibiBowater are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements relating to our estimates of timing and extent of closure costs and impairment charges. Forward-looking statements may be identified by the use of forward-looking terminology such as the words "should," "would," "could," "will," "may," "expect," "believe," "anticipate," "attempt" and other terms with similar meaning indicating possible future events or potential impact on our business or AbitibiBowater's shareholders.
The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. The potential risks and uncertainties that could cause our actual financial condition, results of operations and future performance to differ materially from those expressed or implied in this press release include risks and uncertainties typically associated with estimating and quantifying closure costs and impairment charges and the other risk factors described in our quarterly report on Form 10-Q filed with the SEC on November 15, 2010.
All forward-looking statements in this press release are expressly qualified by the cautionary statements contained or referred to in this section and in our other filings with the SEC and the Canadian securities regulatory authorities. We disclaim any obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
SOURCE ABITIBIBOWATER INC. - ENGLISH