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Natural Resources
October 22, 2007

Government Disappointed in Kruger�s Decision to Close Paper Machine

The Provincial Government is extremely disappointed in the announcement made today by Kruger Inc. to shutdown the No. 1 paper machine at the Corner Brook Pulp and Paper mill effective November 5 for an indefinite period. It is anticipated the shutdown will impact approximately 83 individuals and their families.

The Honourable Kathy Dunderdale, Minister of Natural Resources, is in Corner Brook today to meet with union representatives and officials from the City of Corner Brook to discuss today�s announcement.

"The decision by Kruger Inc. is very disappointing and we are very concerned about the impact it will have on the mill workers being laid off, their families and the economy of the Corner Brook region," said Minister Dunderdale. "Our government will continue to stay in close contact with the company to ensure everything that can be done is done to mitigate the impact of this decision on the employees, the community and on other industries."

The company states the decision to shutdown the paper machine is predominantly a result of the high value of the Canadian dollar.

"The value of the Canadian dollar has increased by 40 cents since 2003, which has had a significant negative impact on the pulp and paper industry across Canada. In the case of Corner Brook Pulp and Paper, 85 per cent of its market is in the United States. There was a very real potential that the company would be announcing much more dire action today � the loss of two machines," the minister said.

"We met with Kruger officials last week and told them very clearly that this was unacceptable. We reminded the company of the support it has received from this government. In the last two years, we have provided over $30 million in assistance to the pulp and paper industry in this province. The company has revisited its plans and moved ahead with today�s action that will see the shutdown of one machine. The impact of their business decision has been lessened because of the significant support this government has provided, and continues to provide, to this industry."

Minister Dunderdale said the Provincial Government will continue to work with the company and the union on the issues facing the industry as it restructures to ensure it remains sustainable and viable and has a strong future in Newfoundland and Labrador. A consultant is currently undertaking a comprehensive review of the island�s forestry sector to outline challenges and opportunities and identify a path forward for a new and sustainable industry that meets the demands of today�s global economy.

The Provincial Government has indicated it will work with the union and the affected employees through this difficult time. The Department of Human Resources, Labour and Employment will provide advice and direction, as necessary, to these employees. Services Canada federally provides programs for retraining and counseling for EI eligible persons. HRLE provides similar services for non-EI eligible persons.

If impacted individuals are EI eligible, they can contact the Corner Brook Services Canada office at 709-637-4201. If they are not EI eligible, they can call the local HRLE office at 709-637-2308. HRLE can also assist employees in their contact with Services Canada if required.


Media contact:
Tracy Barron
Director of Communications
Department of Natural Resources
709-729-5282, 690-8241

2007 10 22                                              2:50 p.m.


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