Down Goes Fraser

Fraser Paper has announced the permanent shutdown of three of the nine machines at Madawaska. This includes the coated groundwood line as well two of the specialty paper machines. Concurrently the pulp mill in Edmunston will be increasing production.

What does this mean for the MMA? Likely the groundwood shutdown will hurt them more since that is a more rail friendly product than the specialty stuff which they will actually still make on the remaining 6 machines. The increase in pulp production is also bad since that is piped in from Edmunston while the purchased pulp typically arrives by rail.

Any comments from up north?

Fraser declared bankruptcy yesterday. They do alot of business with the MMA with the paper mill at Madawaska, lumber mills online at Ashland and Masardis, offline at Plaster Rock and Juniper, NB (they use LMS) and they also manage the two Kathadin mills at Millinocket/East Millinocket. All of these operations have been badly hurt because of the economy. I wonder how much MMA is at risk of losing in the bankruptcy.

http://www.bangordailynews.com/detail/108780.html

Fraser Papers announced July 15th that their Edmundston, N.B. sulphite mill will no longer be part of the company's future, following the Unionized employee's rejection ( by 97 % ) of a labour deal offer. The sulphite mill supplied pulp......via pipeline across the St John River......to the Madawaska paper mill operations. Fraser also stated they will continue to source pulp from other Canadian and U.S. suppliers.

I would assume RAIL business for MMA will increase since purchased pulp is usually shipped by rail, as also mentioned by NYC27.