Cascades Inc., Kingsey Falls, Quebec, has announced that its Laval plant in Quebec that specializes in the manufacture of napkins for the away-from-home market will be closing on June 30, 2021. The Laval plant has an annual converting capacity of 1.4 million cases.
According to a news release from Cascades, this volume will be moved to other Cascades plants and filled by additional capacity. The plant currently employs 54 workers.
“COVID-19 has severely impacted the number of visitors to restaurants, hotels and public buildings, markets served by the Laval plant. This situation, combined with high logistics costs, prompted us to move production to other sites in order to optimize our operations, reduce our costs and create synergies,” says Jean-David Tardif, president and chief operating officer of Cascades Tissue Group. “It is important to note that this decision will in no way affect product quality or the level of service we provide to our customers, or Cascades' ability to meet demand for our products.”
Earlier this year, Sanna Sosa, a principal consultant at Stockholm-based AFRY Management Consulting, reported at the Institute of Scrap Recycling Industries’ Virtual Event: Spotlight on Paper that recycled fiber consumption in the away-from-home tissue sector is likely to struggle this year as a result of the pandemic.
She added that the pandemic could adversely affect demand for recovered fiber among containerboard plants. “Even before the pandemic, there were a lot of concerns among analysts and in general that there might be overcapacity developing in the North American containerboard market,” Sosa said.
In addition, Cascades reported in its third-quarter results earlier this month that demand is shrinking for away-from-home products.
“Results in our tissue business were mixed,” said Mario Plourde, president and CEO of Cascades, when the company’s third-quarter results came out in early November. “As expected, demand remained strong for consumer tissue, while the reverse was true for away-from-home products given the impact that COVID-19 is having on businesses, restaurants, hotels and schools. This segment, which accounts for approximately 40 percent of our annual tissue sales, experienced sharp decreases in demand for some product.”
Until the plant is closed, Cascades reports that it plans to work with its employees to reduce the impact of this announcement. It aims to relocate as many employees as possible to its other business units in Quebec.