West Fraser Timber (TSX,NYSE:WFG) plans to shrink its workforce by 20%, and its carbon footprint by 35%, at its pulp mill in Hinton, Alberta by shutting down one of two production lines, and switching the remaining one to a different product.
The Vancouver-headquartered forestry giant announced this week it will permanently reduce production at its Hinton pulp mill, which has been in operation since 1956, by the end of this year.
“Hinton Pulp has been in operation since 1956 and these changes are necessary to simplify our operation, reduce capital requirements and greenhouse gas emissions, and better align with consumer expectations,” West Fraser CEO Ray Ferris said in a press release.
The company will eliminate one of two lines, and switch the remaining one from producing northern bleached softwood kraft pulp to unbleached kraft pulp.
Bans on single-use plastics in a number of countries, including Canada, has increased the demand for unbleached kraft pulp, the company said.
“As the world moves away from single-use plastics, UKP is now used increasingly in a wide variety of everyday items including cardboard packaging, grocery bags, fibre-cement board and specialty products,” the company said.
Shutting down one production line will mean the loss of 70 jobs, as the mill’s workforce shrinks from 340 to 270.
“West Fraser expects to mitigate the impact on employees through natural attrition, retirements and by offering employment opportunities at other West Fraser operations,” the company said.
West Fraser estimates the downsizing will reduce the pulp mill’s greenhouse gas emissions intensity by 35%, and water use and waste by 25%. It will also eliminate chlorine dioxide emissions.
As a result of decommissioning the one production line, West Fraser will record a $13 million write-down.
