Resolute Forest Products (www.resolutefp.com), Montreal, says it will permanently shut down a paper machine at its Laurentide mill in Shawinigan, Quebec, Canada, by Nov. 26, 2012. The company cites what it calls a sharp drop in demand and an increase in market capacity as the reasons for the closure.

The Laurentide mill produces more than 350,000 metric tons per year of commercial printing papers with two machines. The machine being closed produces 125,000 metric tons per year. The shutdown will not affect the other line (paper machine No. 11), which has an annual production of nearly 225,000 metric tons per year.

“Resolute must prove that it is profitable with mills that perform well, which forces us to improve our competitive edge by focusing on our best assets and cutting costs,” says Richard Garneau, Resolute’s president and CEO. In a statement made accompanying the announcement, Garneau says market demand and capacity, the strong Canadian dollar, rising freight and fuel costs, plus the continuing high cost of fiber all factored into management's decision. “This is a major challenge and we are confident that we, with our employees, will be able to meet it,” says Garneau.