Paper mill files for bankruptcy protection

-A A +A
By Jenny Arnold

CATAWBA – AbitibiBowater’s woes continue, as the company filed for bankruptcy court protection in Canada and the United States to deal with its $6 billion debt.

Almost 1,000 people, including many from Lancaster County, work at AbitibiBowater’s Catawba plant in York County.

Company officials said day-to-day operations will continue through its restructuring process.

“Today’s announced decisions ensure business continuity for AbitibiBowater and were made only after all other viable options to recapitalize our long-term debt were exhausted,” said David J. Paterson, company president and chief executive officer, in a statement. “The steps we are taking today and the vote of confidence given to us by our restructuring financial partners will enable us to protect the value of the business for our many loyal employees, customers, suppliers and other stakeholders.”

The company had instituted cost-cutting measures in recent months.

In December, the company shut down the Catawba operation for nine days, from Dec. 24 through Jan. 1. The Catawba operation also shut down during the first week of February.

The plant, located just across the Lancaster County line, has also furloughed some workers.

It had planned to extend the furloughs for 123 of its employees from March through the end of April, but decided to bring back 24 production employees and seven maintenance workers last week.

Officials have cited the poor economy, a surplus in paper supplies and advertisers reducing newspaper advertising in favor of running ads on the Internet for the drop in orders of paper.

The Catawba operation makes coated paper for magazines and books and market pulp for paper towels, tissue and other products.

AbitibiBowater was created when Bowater Inc. merged with Canadian company Abitibi Consolidated in October 2007.

Based in Montreal, AbitibiBowater produces a wide range of newsprint, commercial printing papers, market pulp and wood products. It is the eighth-largest publicly traded pulp and paper manufacturer in the world.

AbitibiBowater owns or operates 23 pulp and paper facilities and 30 wood products facilities in the United States, Canada, the United Kingdom and South Korea. Marketing its products in more than 90 countries, the company is also among the world’s largest recyclers of old newspapers and magazines.

Contact senior reporter Jenny Arnold at jhartley@thelancasternews.com or at (803) 283-1151