Two Pulp Mills In P.G. To See Market Curtailments
By 250 News
Tuesday, October 28, 2008 04:02 AM
Prince George, B.C.- Intercontinental Pulp Mill and Prince George Pulp and Paper Mill employees can expect to see market related “curtailments”.
The Canfor Pulp Limited Trust Partnership announced its 3rd quarter results last night. The release indicates that in addition to the 15 thousand tonnes of pulp that will be taken off the market because of planned maintenance shut downs, there will need to be further curtailments to reduce inventories.
The release reads: “Due to general weakness and the global financial crisis, we are seeing a slowdown in pulp demand resulting in an increase in inventories and decreasing prices. The impact of price declines in US dollar terms is mitigated by lower oil and natural gas prices and a weakened Canadian dollar. However, with rising inventories, the Partnership has decided to take market related production curtailments of approximately 30,000 tonnes of pulp and 10,000 tonnes of kraft paper. These curtailments are expected to occur over the next several months.”
The bottom line for the Partnership is a positive one, the third quarter of 2008 saw the Partnership wrap up with sales of $215.4 million and a net income of $11.1 million. That is lower than the same quarter a year ago, when sales were $228.9 million and the net income was $33.2 million.
The report also notes the Prince George Pulp Mill is still not operating at full capacity due to operation of a temporary chip screening system. ( this is a result of the fire last January which destroyed the chip screening system)
Construction of a permanent system is nearing completion and the system is expected to be operational before the end of the year. Pulp production volume lost as a result of the Prince George Pulp Mill using the temporary chip screening system is approximately 7,000 tonnes in the third quarter compared to 6,000 tonnes in the second quarter of 2008. The financial impact of this reduced production volume has been offset by accrued business interruption insurance recoveries of $3.5 million in the third quarter and $3.3 million in the second quarter.
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I wonder if they will keep the chip plant going if they curtail production, or will they be closing sawmills instead for temporary shut downs, because all the pulp mills are up to their ears in chips as it is. I've heard rumors, but most of them are just that.