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SKEENA CELLULOSE ANNOUNCES SHUTDOWN OF PULP MILL

 PRINCE RUPERT, B.C., Oct. 4 /PRNewswire/ -- Skeena Cellulose Inc. (SCI) has announced an inventory shutdown of its pulp mill effective Sunday, Oct. 3. It will resume limited operations on Oct. 18 and full operations on Oct. 25.
 In addition, SCI announced that it will not reopen its `B' Mill following the normal December statutory holiday shutdown and it will stay closed for approximately three months. Approximately 250 employees will be issued layoff notices. The `A' Mill, which employs 500 people, will start production Dec. 27 and will not be affected by this decision.
 Tom Boughner, general manager of Skeena's pulp operations said, "the decision to leave the `B' Mill down after the December holiday is most unfortunate but unavoidable. A global recession and oversupply of pulp have driven down prices to unprecedented levels," stated Mr. Boughner. "Despite weak markets we continued to operate as long as we could in the hope that we could weather the effects of the severe world-wide economic downturn."
 Scandinavian currency devaluations, the sluggish performance of the major world economies and new pulp producing capacity are complicating a bleak picture for North American pulp producers. The result has been a relentless downward pressure on prices.
 Mr. Boughner added, "With markets still depressed and outlook for prices expected to remain low in the immediate future, this measure is the only responsible course to take," he said.
 The announcement of the `B' Mill shutdown is being made at this time in order to ensure that all those affected are given as much time as possible to prepare.
 Mr. Reg Lightfoot, senior vice-president of operations for Skeena Cellulose said that "the decision to shutdown `B' Mill was reluctantly reached only after having explored all other avenues and possibilities." He stated, "employees at Skeena Pulp have made great progress by substantially improving the productivity of the mill and reducing costs. However, the long term financial viability and future competitiveness of the operation dictates that we implement this measure and continue to further reduce our overall costs," concluded Mr. Lightfoot.
 -0- 10/4/93
 /CONTACT: Tom Boughner, general manager of Skeena Cellulose Inc. - Pulp, 604-627-7800, or Reg Lightfoot, senior vice president - operations of Skeena Cellulose Inc., 604-688-2225/


CO: Skeena Cellulose Inc. ST: British-Columbia IN: PAP SU:

LD -- NY106 -- 8573 10/04/93 17:40 EDT
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Publication:PR Newswire
Date:Oct 4, 1993
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