MONTREAL-Resolute Forest Products is permanently shutting down the paper machine #10 at its Laurentide mill in Shawinigan, Quebec. The move comes after a drop in demand and an increase in market capacity of the paper grade produced on the machine.

The Laurentide mill, which currently has 388 employees, produces more than 350,000 metric tons per year of commercial printing papers with two machines. Machine #10 produces 125,000 metric tons per year. This machine will cease production on Nov. 26, 2012, eliminating nearly 111 jobs. The shutdown will not affect paper machine #11, which has an annual production of nearly 225,000 metric tons per year.

Resolute President and CEO Richard Garneau noted that market demand and capacity, the strong Canadian dollar, rising freight and fuel costs, and the continuing high cost of fiber also factored into management's decision.

"Resolute must prove that it is profitable with mills that perform well, which forces us to improve our competitive edge by focusing on our best assets and cutting costs," stated Garneau. "This is a major challenge and we are confident that we, with our employees, will be able to meet it."

The company is aware of the impacts this decision will have on the employees concerned and their families and will work with union representatives and the governments to mitigate these impacts with a focus on retirement. Management intends to make sure that all the employees affected receive the necessary support, in compliance with the relevant collective agreement terms, and that as many employees as possible are reassigned to other company facilities.