Catalyst Closing Paper Recycling Mill in Arizona

Catalyst Paper Corp. is closing its paper recycling mill in Snowflake, Ariz.

The Richmond, British Columbia-based Catalyst said in a news release the closure, scheduled for Sept. 30, also includes the mill’s subsidiary, Apache Railway Co.

Catalyst, which is reorganizing, said that the mill was hurt by continued weak newsprint demand, pricing volatility and higher freight costs resulting from needing to reach farther for an adequate supply.

The company said it made several attempts to improve the operation’s finances since purchasing it in 2008, including producing higher-value specialty paper grades, capital investments and competitive labor agreements.

"The decision to close Snowflake is an extraordinarily difficult one given the exceptional effort that employees, unions and public officials have given to address the unique challenges at this mill,” said Kevin Clarke, Catalyst president and CEO.

The closure will mean some initial cash costs, which Catalyst expects to recoup from working capital and the sale of the mill’s assets. Catalyst took a $161.8 millionasset impairment charge in the second half of 2011.