Resolute Forest Products announced the indefinite idling of the kraft mill and paper machine number 5 (PM5) at its pulp and paper operation in Fort Frances.
The shutdown impacts 239 employees in the northwestern Ontario community.
Mothballing the kraft mill takes 200,000 annual metric tonnes of pulp out of circulation. The paper machine has an annual capacity of 105,000 metric tons of groundwood specialty printing papers.
"The markets for these products are challenging and are expected to remain so," said Richard Garneau, Resolute's president and CEO, in a Nov. 20 press release.
"The kraft mill situation is particularly difficult given Fort Frances' operating configuration and the recent decision by a key customer to stop consuming the pulp supplied by Resolute to its mill. Our kraft mill's drying capacity is limited to about 40 percent of its production capacity, making it impossible to continue operating the mill in a profitable manner."
The company said it is exploring other product lines for its Fort Frances pulp mill, which will be idled in a manner that will protect the equipment.
Resolute also blamed the high value of the Canadian dollar and a decrease in paper consumption for the idling of PM5.
"We will monitor market conditions closely and work with key stakeholders to explore ways to improve the mill's cost position," said Garneau.
Reducing fibre inventories and shutting down the kraft mill will be complete by late November. The paper machine will operate until late November.