Company near North Bay closing plant, laying off 275 workers

As of July 2, Rayonier Advanced Materials is suspending operations at its Temiscaming High Purity Cellulose plant for an indefinite period.

The company cited sluggish sales as the reason for closing the plant, located in Quebec near the border with Ontario.

“Given current market conditions and high capital and fixed costs associated with the HPC plant, this decision will help mitigate the plant’s ongoing operating losses and improve the company’s consolidated free cash flow,” a news release this week said.

“Today’s announcement is aligned with the company’s focus on improving its balance sheet, leverage position and overall financial performance toward execution of its long-term growth strategy.”

The Temiscaming facility has an annual production capacity of approximately 150,000 metric tons, with roughly 30 per cent historically dedicated to specialty cellulose materials.

“The company will be working directly with its customers to support their specialty cellulose needs in both the short- and long-term,” the release said.

“Today’s announcement will result in approximately 275 layoffs.”

High Purity Cellulose is used in a range of products, including construction materials, coatings, food and pharmaceutical products. It is also used to enhance texture, thicken syrups, and enable the development of slow-release medications.

“Persistent market weakness, uncertain availability of affordable wood fiber, and high capital and fixed costs have posed significant challenges for the Temiscaming HPC plant,” said company CEO De Lyle Bloomquist is quoted as saying in the release.

“This decision, which we do not take lightly, is made only after a rigorous strategic review in which multiple alternatives were thoroughly explored. We are mindful of the impact this will have on affected employees and will take appropriate measures to assist these employees in keeping with the collective agreement, RYAM values and applicable law.”

The decision does not affect RYAM’s paperboard and high-yield pulp plants located adjacent to the Temiscaming HPC plant.

These two plants, which are part of an ongoing sales process announced last October, remain competitive and will continue to operate at full capacity.

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RYAM is a global leader of cellulose-based technologies, including high-purity cellulose specialties, a natural polymer commonly used in the production of filters, food, pharmaceuticals, and other industrial applications. The company also manufactures products for paper and packaging markets.