Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) has expressed the Company's disappointment that negotiations under the auspices of the Canadian Boreal Forest Agreement (CBFA) have broken down after three years of collaborative efforts. Parties were unable to reach mutual agreement on a workable plan to jointly further conservation efforts while balancing environmental, social and economic considerations in the Canadian boreal forest.
The CBFA was signed by members of the Forest Products Association of Canada (FPAC), including Resolute, and a group of environmental organizations to establish a common framework to further support boreal conservation efforts while safeguarding the livelihood of thousands of citizens in communities that depend on healthy working forests.
While it was challenging to find common ground among organizations with such diverse interests, Resolute believes its contributions to CBFA working groups and its overall commitment to sustainable forestry positively impacted the process. Company employees participated in all CBFA activities, offering concrete proposals and committing thousands of work hours to the initiative. Resolute also stepped forward to provide funding and offered significant additional financial support to the process.
Over the past several weeks, intense negotiations took place leading up to the third anniversary of the CBFA. Resolute put forward proposals for Northwestern Ontario that endorsed the setting aside of an additional 504,000 acres (204,000 hectares) of forest for conservation, providing additional protection of caribou and other species. This commitment is on top of the approximately 4,942,000 acres (2,000,000 hectares) of Ontario forests that have already been established as protected spaces, parks and other initiatives over the past 15 years.
In Quebec, Resolute put forward additional candidates for protected areas to move up the total percentage to 12%, equivalent to 1,710,000 acres (692,000 hectares), focusing primarily on best habitats for caribou conservation. The Company also specifically addressed concerns related to the Montagnes Blanches and the Broadback Valley. The Resolute proposals were made with full knowledge that further curtailment of the Company's fiber supply is likely in the near future due to revisions of the annual allowable cut by Quebec's Chief Forester, and by the implementation of a government endorsed caribou conservation plan.
"It is unfortunate the CBFA signatories were ultimately unable to reach alignment on how to strike a balance among environmental, social and economic priorities - the three pillars of sustainability," stated Richard Garneau, President and Chief Executive Officer. "Rural, northern and First Nations communities have paid a heavy price from the economic and market challenges the industry has faced over the past decade. We believe we have a responsibility to ensure that they understand and have a say in any plans that might affect their futures. Outcomes of the CBFA process that did not involve serious stakeholder consultations would have lacked legitimacy and could not have been considered reasonable proposals," continued Garneau.
"Resolute will simply not abdicate our responsibility to address regional concerns of the North, including the First Nations' interests with whom we have a number of business and economic development initiatives already in place or pending. We agree that environmental concerns must be at the forefront, however, the regional social and economic impact must also be part of the equation," said Garneau.
During the negotiations, Resolute also offered to match funds raised by participating environmental non-governmental organizations (ENGOs) to further research into endangered species management. It was proposed that any such funding would be jointly managed by the Company and the ENGO community, and dollars would flow to research efforts using post-secondary institutions and other research resources residing in the North. Such an approach would further support development of economic and institutional capabilities of the northern regions.
Last year, as part of the Company's involvement in the CBFA, Resolute played an important role in crafting a proposal for Northeastern Ontario, ultimately resulting in joint recommendations to government. One of the key elements of the proposal divided the Abitibi River Forest Management Unit into three zones. The northern most zone represented establishment of a caribou conservation area covering almost 2,063,000 acres (835,000 hectares). Industry agreed to voluntarily and permanently avoid harvesting the area to provide for better caribou habitat. According to recent developments, the Ontario government support for these recommendations will soon evolve into formal implementation. Additionally, Resolute intends to use as reference the methodological frameworks for protected spaces and caribou conservation, produced under the CBFA, in the Company's ongoing work to improve the current network of protected spaces and to enhance existing caribou conservation plans.
Resolute assumes that in the coming days, certain ENGOs will resume their attacks against the Company. Resolute will not tolerate falsehoods or inaccuracies about the Company's actions. A few months ago, following their announced exit from the CBFA, Greenpeace issued a series of misleading, deceptive and factually inaccurate allegations. Resolute provided clear proof that Greenpeace's claims were false. Ultimately, when cautioned that the Company would commence legal proceedings, Greenpeace finally acknowledged that its "evidence" was untrue and issued a formal retraction.
Last week, Greenpeace once again issued a false and misleading report, ignoring Resolute accomplishments and mischaracterizing the Company's ongoing efforts to be a leading force for sustainable forestry. "As we did then, Resolute will continue to take the necessary steps to protect its reputation and that of our employees, as well as the reputations of our valued customers and other business partners," stated Garneau.
Resolute remains committed to the principles underlying the CBFA and will continue to operate in a manner consistent with a balanced approach to sustainability. In 2012, Resolute achieved the distinction of being the largest manager of forests certified through the Forest Stewardship Council® (FSC®) in the world. The Company is also a member of the World Wildlife Fund's Climate Savers Program, through which it has pledged to reduce absolute greenhouse gas emissions by 65% below 2000 levels by 2015. Recently, Resolute launched Forum Boréal, a new online forum where users can discuss and exchange information about the challenges of sustainable development in the boreal regions of Quebec.
"By continuously striving to improve our sustainability performance, Resolute creates value for our customers, our employees, our operating communities and our shareholders," concluded Garneau.
The Grand Council of the Crees is asking an international body to overturn a sustainable-forestry certification for Montreal-based Resolute Forest Products.
The challenge by the Cree is related to forestry activity in a 750,000-hectare swath of land north of Chibougaumau where Cree trap-lines are located.
The Grand Council says Resolute has not followed sustainable-forestry practices in the area, including obtaining the consent of the Cree for forestry operations. It says Resolute was clear-cutting when it was supposed to be doing mosaic-pattern cutting. That means cutting in an area of no more than 150 hectares, and leaving an equivalent area of the same size uncut until the area that had been cut reached three metres of growth, said Geoffrey Quaile, an environmental adviser to the Grand Council of the Cree.
Last year, Resolute was certified for sustainable-forestry management of the land near Chibougamau by the Forestry Stewardship Council. The Cree objected to that certification. An audit found Resolute did not have consent from the Cree to operate there, and the company was given three months to correct the situation. Last month, Resolute's FSC certification was reconfirmed in a report that said Resolute is no longer allowed by law to perform mosaic cutting because it is considered detrimental to caribou habitats. But the Cree want Accreditation Services International, which oversees FSC sustainability certifications, to revoke that certification.
The Cree challenge came the same day that Greenpeace published a 20-page report accusing Resolute of unsustainable logging practices in the boreal forest and making false claims about its "green" product line. The report specifically mentions Resolute's relationship with First Nations communities as problematic. It's the latest in a war of words between Resolute and Greenpeace, which in March publicly apologized to the company for statements it had made about Resolute's Quebec operations. A Resolute spokesperson dismissed the new Greenpeace report, saying Greenpeace presented either incorrect information or was "terribly deceptive" in the way it presented information.
Seth Kursman pointed to an issue of employee pensions in Nova Scotia, where Greenpeace said Resolute left the provincial government to pay millions of dollars in pensions to former employees. But Kursman said the provincial government agreed to make the payments when it bought 220,000 hectares of land in Nova Scotia from the company.
"It's very important that we continue to separate facts from fiction," Kursman said. "We're 100 per cent certified as a company to internationally-recognized forest-management standards."
He said Resolute will take "the necessary steps" to protect the reputation of the company, its employees and customers.
Greenpeace Quebec director Nicolas Mainville stood behind the report, saying that the environmental group tightened its practices after apologizing to Resolute in March.
Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) has officially inaugurated a major power island producing green energy at its pulp and paper operation located in Thunder Bay, Ontario. The power island includes a refurbished and upgraded woodwaste boiler and a new 65-megawatt condensing turbine. Approved by Resolute in early 2011, the C$65 million project took just over 21 months to complete.
"The power island is a strategic addition to Resolute's Thunder Bay facility," stated Richard Garneau, President and Chief Executive Officer. "It will reduce the mill's energy costs as well as maximize our local woodlands, sawmill, pulp and paper, and energy operations by fully utilizing forest-based biomass to produce green electricity."
The green power produced will be sold to the Ontario grid under a power purchase agreement between Resolute and the Ontario Power Authority.
To mark the inauguration, a ceremonial "throwing of the switch" was held earlier today involving key Company and government representatives. Richard Garneau and Resolute Chairman of the Board Richard B. Evans were joined by a number of government dignitaries, including: Ontario Minister of Northern Development and Mines and MPP, Thunder Bay-Superior North, the Honourable Michael Gravelle; Member of Provincial Parliament for Thunder-Bay-Atikokan Bill Mauro; and Mayor of Thunder Bay Keith Hobbs. Resolute employees and local community leaders also attended the event. The project received support from the Ontario Government's Forest Sector Prosperity Fund, as well as from the Federal Government's Pulp and Paper Green Transformation Program.
"This project is consistent with Resolute's focus on optimizing our network to reduce costs as well as investing in projects that improve our competitive position and are aligned with a sustainable future," added Garneau.
Although he could not attend the inauguration, the Honourable David Orazietti, Ontario Minister of Natural Resources, sent a statement to mark the occasion: "The investment by Resolute in its turbine at Thunder Bay is a key commitment by the company to support the future viability of the Thunder Bay pulp and paper operation. I am pleased to see that the government's offer of access to additional wood supply through the 2010 wood supply competition has helped support Resolute's investment in its turbine, and that this government provided C$9.6 million towards this important green energy project that is integral to Resolute's pulp and paper complex in Thunder Bay."
"This is certainly an important investment that will ensure Resolute Forest Products remains a strong global force in the pulp and paper industry while continuing to contribute to the Thunder Bay economy. This new power island will significantly reduce their impact on the environment, and I'm thrilled that our government was able to help support this project," stated Michael Gravelle, Ontario Minister of Northern Development and Mines and MPP, Thunder Bay-Superior North.
"This project helps to position the Resolute Forest Products mill in Thunder Bay as one of the most strategic assets - if not the most strategic - in their entire North American network," stated Member of Provincial Parliament for Thunder-Bay-Atikokan Bill Mauro. "I am happy that our government programs are able to support the private sector investment by Resolute in the Thunder Bay operation, which is now very well-positioned to support its employees, its customers and the Thunder Bay economy for years to come."
"The City of Thunder Bay strives to be clean, green and beautiful," said Keith Hobbs, Mayor of Thunder Bay. "We thank Resolute for embracing these principles and congratulate them on this innovation that demonstrates their commitment to sustainability."
Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) has celebrated the 10th anniversary of its sawmill located in Thunder Bay, Ontario. It is a unique business venture in that its success stems from a collaboration between Resolute and the Fort William First Nation.
With an annual capacity of 300 million board feet of stud lumber, Resolute's Thunder Bay sawmill is among the largest and most modern in Eastern Canada. It commenced operation on May 12, 2003, and presently employs 170 workers. Over the last two years, investments of more than C$8 million were made to increase production.
In 2012, the Thunder Bay sawmill also became the first facility in Canada to operate under regulations created by the First Nations Commercial and Industrial Development Act. This legislation enables Federal reserve land to operate under Provincial statutes, thereby facilitating industrial development with First Nations on their land. Today's anniversary is the result of the collective efforts over the past 10 years of the Company and the Fort William First Nation, the sawmill employees, the City of Thunder Bay, the governments of Ontario and Canada, and the many contractors and suppliers that service the facility.
To mark the occasion, an official ceremony involving Fort William First Nation leadership, senior Resolute management and a range of dignitaries was held today at the sawmill. Richard Garneau, Resolute's President and Chief Executive Officer, Chairman of the Board Richard B. Evans, Chief Georjann Morriseau of the Fort William First Nation, Ontario Minister of Northern Development and Mines and MPP, Thunder Bay-Superior North, the Honourable Michael Gravelle, Member of Federal Parliament for Kenora and Parliamentary Secretary for Aboriginal Affairs and Northern Development, Greg Rickford, Member of Provincial Parliament for Thunder Bay-Atikokan Bill Mauro and Mayor of Thunder Bay Keith Hobbs were present at the Thunder Bay sawmill site. Employees and many other special guests, including community and aboriginal leaders, also attended the ceremony.
"This anniversary is a milestone for Resolute. I am pleased to be here today to celebrate it with our partners from the Fort William First Nation, because I truly believe that what we have here is a unique recipe for success," stated Richard Garneau. "This anniversary is also a true testament to the hard work and dedication of our employees and to the genuine collaboration of the governments of Ontario and Canada, as well as that of the City of Thunder Bay."
Chief Georjann Morriseau of the Fort William First Nation stated: "I want to congratulate Fort William First Nation and Resolute Forest Products on the 10th anniversary. This initiative is very supportive of our mission: enhancing and supporting Aboriginal business and economic development through a range of distinct services. As well, it allows me an opportunity to honour the work of past chiefs for starting the journey of our nations' youth to build and grow future opportunities that we celebrate today. The Fort William First Nation's economic development and the Thunder Bay sawmill have been a key part of this process, and we want to continue to build on our relationship with Resolute as we look to the future."
Ontario's Minister of Natural Resources, the Honourable David Orazietti, who could not attend, sent his congratulations to both Resolute and the Fort William First Nation: "I commend and congratulate both Resolute and Fort William First Nation on their partnership arrangement and the success of the Resolute sawmill. I am pleased this mill is benefiting from the province's 2010 competition offer of wood supply that supports Resolute's investment in the expansion of this sawmill, which is now the largest operating sawmill in Ontario. This is a terrific example of how Ontario is putting its wood and people back to work."
"I am absolutely thrilled to be here today to celebrate the 10th anniversary of the Thunder Bay sawmill. This is certainly a proud moment for our government, the city of Thunder Bay, the Fort William First Nation and everyone who has made the past 10 years such a success," said Michael Gravelle, Ontario Minister of Northern Development and Mines and MPP, Thunder Bay-Superior North.
"I want to congratulate the Fort William First Nation and Resolute Forest Products on the 10th anniversary of their Thunder Bay sawmill," stated Member of Parliament for Kenora Greg Rickford. "I am pleased that our government was able to play a supportive role in the success of this unique project, which has become such an important part of the economy of the Thunder Bay region."
"We are all encouraged by the success of this sawmill over the last 10 years," stated Bill Mauro, Member of Provincial Parliament for Thunder Bay-Atikokan. "I would like to thank the employees for their work and dedication, and Resolute Forest Products for its financial investment and belief in Thunder Bay and Northwestern Ontario."
"The City extends congratulations to Resolute and its employees as they celebrate this important milestone. The Thunder Bay sawmill, located on Fort William First Nation lands, plays an important economic role in both of our communities, and we wish them continued success for the next decade," said Keith Hobbs, Mayor of Thunder Bay.
SOURCE: Resolute Forest Products Inc.
Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) has reported a net loss of $5 million for the quarter ended March 31, 2013, or $0.05 per share, on sales of $1.074 billion. This compares to net income of $23 million, or $0.23 per diluted share, on sales of $1.054 billion in the first quarter ended March 31, 2012.
Excluding $33 million of special items, net income for the quarter was $28 million, or $0.30 per share. Excluding special items of $16 million, net income in the first quarter of 2012 was $7 million, or $0.07 per diluted share. Non-GAAP financial measures, such as adjustments for special items and adjusted EBITDA, are reconciled below.
"Our efforts to restructure mills and machines during the last two years will lower our manufacturing costs, which will help to mitigate the challenges facing the North American forest products industry," said Richard Garneau, president and chief executive officer.
Concerning the status of the funding relief measures related to the material Canadian registered pension plans, he added: "On April 26, we reached an agreement in principle with Company stakeholders in Quebec, the provincial government, and its pension regulator to replace the significant uncertainty associated with potentially material corrective measures in favor of more stable, predictable and balanced pension funding we need to run our business. Under this agreement, we would make reasonable incremental contributions in order to secure longer-term funding stability. With this significant progress in Quebec, we look forward to meeting very soon with the provincial government of Ontario and its pension regulator, and our Ontario stakeholders."
Operating Income Variance
In the first quarter of 2013, the Company recorded an operating loss of $50 million, compared to $46 million in the fourth quarter of 2012. The $4 million unfavorable change reflects a $54 million reduction in sales, due to lower shipments of newsprint and specialty papers due to seasonality and market conditions, and capacity reduction initiatives. Overall pricing contributed $4 million, as higher transaction prices in wood products more than offset declines in newsprint. Cost of sales was down $19 million, due mainly to the lower volume, offset in part by costs associated with the annual outage at the Catawba, South Carolina, mill, higher mill start-up costs and increases in certain other manufacturing costs. The change in operating results was also favorably affected by a $42 million reduction in closure costs.
Segment Details
Newsprint
The newsprint segment reported an operating loss of $2 million in the first quarter, compared to operating income of $18 million in the fourth quarter of 2012. Average transaction price was down $17 per metric ton as a result of capacity pressure within North America. Overall shipments were down 6% in the seasonally slower quarter, but export volume rose to 46% of total shipments, compared to 37% in the fourth quarter, as a result of a gradual improvement in overseas markets. Finished goods inventory was 20,000 metric tons higher at the end of the quarter. Operating costs per unit rose 3% as a result of the lower volume, higher steam costs because of higher natural gas prices and seasonally higher consumption, and the timing of payroll benefits. The Company expects to restart its lower-cost Gatineau, Quebec, facility in early May to offset the recent machine closure at its Calhoun, Tennessee, mill.
Coated Papers
The coated segment generated an operating loss of $3 million during the quarter, compared to operating income of $3 million in the previous quarter. Shipments rose 6% from the fourth quarter, in which the Company experienced equipment failures at the Catawba mill. Average transaction price was unchanged but operating costs rose $40 per short ton owing to the mill's annual outage.
Specialty Papers
Operating income increased by $1 million, to $9 million, in the quarter. Shipments were down 10%, reflecting seasonality and market conditions. During the fourth quarter, the Company implemented asset optimization initiatives, closing two machines and restarting the lower-cost Dolbeau, Quebec, facility. Operating costs in the segment improved by $14 per short ton as the Dolbeau mill, including its cogeneration facility, reached full production and the Company made efficiency improvements at its Laurentide, Quebec, mill. Costs were unfavorably affected by higher steam costs from higher natural gas prices and seasonally higher consumption. Average transaction price was down $8 per short ton in the quarter.
Market Pulp
Operating loss in the market pulp segment was $4 million in the first quarter, compared to breakeven in the previous quarter. Average transaction price rose $7 per metric ton, but shipments were down 2%, due mainly to the annual outage at the Catawba mill. Operating cost per unit were $19 per metric ton higher, due to the annual outage at Catawba, higher wood costs in the U.S. southeast due to heavy rain and higher steam and chemical costs. Cost performance at the Saint-Felicien, Quebec, mill improved significantly following the costly catch-up maintenance and environmental work during the third and fourth quarters of 2012.
Wood Products
The wood products segment generated operating income of $16 million during the quarter, up $2 million from the fourth quarter. Average transaction price improved $36 per thousand board feet, but shipments were down 3% as a result of limited rail car availability. Operating costs per thousand board feet were 8% higher in the quarter because of higher wood costs - mainly increases in stumpage fees, which are linked to lumber selling prices - lower wood chip selling prices and a $4 million favorable inventory adjustment in the fourth quarter.
Corporate & Finance Initiatives
On April 26, the Company announced the pricing of its $600 million senior notes due 2023 offering at 5.875%, to be issued at 99.062% of par value. Net proceeds from the offering will be used to repurchase, repay or otherwise discharge all, or substantially all, of its $501.2 million outstanding 10.25% senior secured notes due 2018.
"With our strong balance sheet, we are able to take advantage of very attractive financial markets" said Jo-Ann Longworth, senior vice president and chief financial officer. "We are refinancing our high-coupon, secured debt with unsecured debt at an interest rate that is more than 40% lower and adds five additional years to maturity. Consistent with our strategy of acting opportunistically to continuously enhance our competitive position, it's the right time to lock in these attractive terms, which will reduce our annual interest burden by $15 million and improve our financial flexibility."
The offering of the 2023 notes is expected to close on May 8, subject to customary closing conditions.
Outlook
Mr. Garneau added: "While we are encouraged with the incremental progress we are seeing on newsprint export markets, we expect domestic pricing to remain under pressure until more tonnes produced in North America are shipped offshore. With markets for specialty papers strongly influenced by advertising spending, demand may remain sluggish as customers are cautious based on recent U.S. economic data. Recent demand and pricing trends in the pulp market are giving us reason for cautious optimism that it is gaining momentum after its prolonged slump. Finally, lumber pricing has been strong, and we expect it to remain at or near current levels, as shipments from Canadian producers continue to be limited by strained supply chains from the increase in demand."
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SOURCE: Resolute Forest Products Inc.
Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) has announced that it priced the offering of $600 million aggregate principal amount of its senior notes due 2023 (the "2023 notes") at 5.875% and 99.062% of par value. The notes will be unsecured and guaranteed by substantially all of Resolute's U.S. subsidiaries.
The offering of the 2023 notes is expected to close on May 8, subject to customary closing conditions, with net proceeds used to repurchase, repay or otherwise discharge all, or substantially all, of its $501.2 million outstanding aggregate principal amount 10.25% senior secured notes due 2018 (the "2018 notes"). The Company is currently conducting a tender offer for the 2018 notes, which offer is scheduled to expire at 12:00 midnight, New York City time, on May 21, 2013, unless extended by the Company.
The 2023 notes are being sold in a private offering to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to non-U.S. persons in reliance on Regulation S under the Securities Act. The notes have not been registered under the Securities Act or any state securities laws. Therefore, the notes may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offering, solicitation or sale would be unlawful. This press release is issued pursuant to and in accordance with Rule 135c under the Securities Act.
Cautionary Statements Regarding Forward-Looking Information
Statements in this press release that are not historical information of Resolute Forest Products Inc. are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include, but not limited to, those related to the offering of the senior notes or the subsequent repurchase of the Senior Secured Notes. Forward-looking statements may be identified by the use of forward-looking terminology such as the words "should," "would," "could," "will," "may," "expect," "believe," "anticipate," "attempt," "project" and other terms with similar meaning indicating possible future events or potential impact on our business or Resolute's shareholders.
The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause the actual results of the offering of the senior notes or the subsequent repurchase of the Senior Secured Notes to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the possibility that the offering will not be consummated, and the failure to satisfy any conditions to the offering. Other potential risks and uncertainties are set forth under the heading "Risk Factors" in Exhibit 99.4 to Resolute's Current Report on Form 8-K filed with the United States Securities and Exchange Commission on April 24, 2013.
All forward-looking statements above are expressly qualified by the cautionary statements contained above and in Resolute's other filings with the SEC and the Canadian securities regulatory authorities. Resolute disclaims any obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) has announced that it has launched a private offering for $600 million aggregate principal amount of senior notes due 2023. The notes will be unsecured and guaranteed by substantially all of Resolute's U.S. subsidiaries. The net proceeds from the sale of the 2023 notes will be used in connection with the repurchase, repayment or other discharge of all, or substantially all, of the $501.2 million outstanding aggregate principal amount of the Company's 10.25% senior secured notes due 2018. The Company has contemporaneously launched a tender offer for the 2018 notes, which offer is scheduled to expire at 12:00 midnight, New York City time, on May 21, 2013, unless extended by the Company.
The 2018 notes are being sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to non-U.S. persons in reliance on Regulation S under the Securities Act. The 2023 notes have not been registered under the Securities Act or any state securities laws. Therefore, the notes may not be offered or sold in the U.S. absent registration or an applicable exemption from such registration requirements.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in which such offering, solicitation or sale would be unlawful.
Cautionary Statements Regarding Forward-Looking Information
Statements in this press release that are not historical information of Resolute Forest Products Inc. are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include statements regarding the offering of the senior notes and the subsequent repurchase of the Senior Secured Notes. Forward-looking statements may be identified by the use of forward-looking terminology such as the words "should," "would," "could," "will," "may," "expect," "believe," "anticipate," "attempt," "project" and other terms with similar meaning indicating possible future events or potential impact on our business or Resolute's shareholders.
The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management's current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause the actual results of the offering of the senior notes or the subsequent repurchase of the Senior Secured Notes to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the possibility that the offering will not be consummated, and the failure to satisfy any conditions to the offering. Other potential risks and uncertainties are set forth under the heading "Risk Factors" in Exhibit 99.4 to Resolute Current Report on Form 8-K filed with the United States Securities and Exchange Commission on April 24, 2013.
All forward-looking statements are expressly qualified by the cautionary statements contained above and in Resolute's other filings with the SEC and the Canadian securities regulatory authorities. Resolute disclaims any obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE: Resolute Forest Products Inc.
Resolute Forest Products is to lay off 110 workers at its Thunder Bay newsprint plant for two weeks starting Wednesday.
In general, market analysts are expecting demand for Canadian newsprint and pulp to be negatively affected by slowing economic growth in China.
That could be offset, analysts say, by new markets in Asia and Latin American, as well as an improving U.S. economy.
Meanwhile, the union representing workers at the Resolute pulp and paper mill says it will fight a company proposal to contract out 42 jobs, saying there are other ways to control costs at the plant.
“This (contracting out plan) isn’t conducive to good labour relations,” Marvin Pupeza of the Communications, Energy and Paperworkers union said Monday.
There was no word Monday if the proposal will be acted upon. Pupeza said he’s “puzzled” by the company’s apparent hard line, saying that in the recent past the union has been willing to make concessions that didn’t involve contracting out.
“For some reason, they are insisting that it has to be by contracting out this time around,” he said. Pupeza said the union has filed a grievance over the issue and expects that an arbitration hearing will be called.
CEP’s airing of the Resolute proposal and the announced layoff for the Thunder Bay mill come just before a visit to the city by company president Richard Garneau. Garneau is to speak Thursday afternoon at the annual meeting of the Northwestern Ontario Municipal Association at the Victoria Inn.
The union says the 42 positions that have been targetted are in newsprint shipping, kraft pulp shipping, garage maintenance, bark inventory and handling. About 350 CEP members work at the mill, which emerged from court-protection from its creditors in 2010.
The current five-year contract expires next year.
High cancer rates in Thunder Bay, Ont. has both past and present mill workers concerned that there might be a connection to their paper plant.
As a result, they have enlisted an occupational health clinic to determine whether workers contracted cancer from the chemicals or processes at the northern Ontario paper mill. A joint committee was formed between management and labour representatives from the Communications, Energy and Paperworkers Union of Canada (CEP) to address the health and safety concerns of workers, who have shown a high risk of cancer.
Bob Hoffman, CEP’s representative on the health and safety committee, said he has been approached by both workers who fear that conditions at the mill contributed and could still be contributing to their cancer development.
“We noticed a high rate of cancer, especially around different processes at the mill,” explained Hoffman, who is also the local CEP chapter’s Workplace Safety and Insurance Board (WSIB) co-ordinator. “[Workers] were concerned that some of the chemicals on that machine may have contributed to cancer … One chemical might be safe, but when you combine it with another chemical, what happens to that? We don’t know.”
Hoffman said that they have circulated a survey to begin to determine whether there is a connection. The survey asks past and present workers whether they had cancer, what type of cancer and if they can provide medical history. Hoffman added that in recent decades, the five major paper mills in Thunder Bay have cleaned up their processes.
“We’re trying to determine if there’s a correlation,” he went on to say. “Through this survey, if we do determine this has done anything wrong, or we do determine they are cancerous, we want those eliminated too. We could do an inventory of the possible carcinogens in the mill and get rid of them.”
After the preliminary data is collected from former and current employees, it will be sent to the Occupational Health Clinics for Ontario Workers (OHCOW), where it will remain confidential.
Donna Campbell is the executive director at OHCOW’s Thunder Bay and Sudbury clinics. She said that they are in the very beginning stages of their data collection, but the latency period of cancer means many forms of the disease can take years to manifest in the body. Therefore, some of the processes at the mill may have already been cleaned up — but if not, that would need to be corrected.
“If there is no issue, then there is no point looking into anything right now. If it happens to be that we find there are cancers that are believed to be work-related, then we, through that joint committee, would work with them,” Campbell said. “Have the exposures been rectified? If not, then let’s look at what’s causing the cancer and let’s eliminate it at the source.”
The Thunder Bay paper mill is owned by Resolute Forest Products Inc., who is also a part of the joint-health and safety committee. Though a spokesperson from Resolute Forest Products could not be reached for a comment, Campbell said it is encouraging to see a company willingly pursue an investigative health and safety initiative.
“What this is all about is prevention. There may be that there could be some WSIB claims, but the goal is that those do not happen in the future and we work in a manner in order to ensure that this is done,” she said.
The surveys are due back to OHCOW on May 3.
Resolute Forest Products has issued its 2012 Annual Report, which includes an overview of the Company's 2012 sustainability performance. While Resolute will continue to produce its Annual Sustainability Report using Global Reporting Initiative (GRI) guidelines, the Company is now also integrating sustainability performance information into its annual financial disclosure.
"Resolute recognizes that focusing on sustainability is good business. Our decision to produce a report combining financial and sustainability performance demonstrates our commitment to balancing environmental, social and economic priorities," said Richard Garneau, President and Chief Executive Officer. "We work hard to integrate sustainability into the way we do business because we believe this approach brings value to our customers, our shareholders, our employees and the communities where we live and work."
In 2012, Resolute made important progress on several of its key sustainability commitments, including:
Carbon Management - As part of its membership in the World Wildlife Fund's Climate Savers program, Resolute committed to achieving a reduction in absolute greenhouse gas emissions of 65% below 2000 levels by 2015. In 2012, Resolute achieved a reduction of over 62% and is on track to meet its WWF commitment.
Fiber Sourcing - The Company obtained chain of custody certification at all of its North American pulp and paper mills and wood products facilities, to either Forest Stewardship Council® (FSC)®, Programme for the Endorsement of Forest Certification (PEFC) or Sustainable Forestry Initiative® (SFI®) standards.
Forest Certification - Resolute is at the forefront of fiber certification, with 100% of the woodlands managed by the Company certified to internationally recognized sustainable forest management standards. Resolute is progressing toward its commitment to add FSC certification to 80% of its managed woodlands by 2015, and as of press time for the report, the Company had reached 65% certification. In 2012, Resolute achieved the distinction of being the largest manager of FSC-certified forests in the world. Taken all together, the Company's FSC-certified forests cover an area larger than Greece.
Product Stewardship - The Company launched its AlignTM brand of eco-efficient, budget-friendly, high-performance papers, which are made using 50% less fiber and fewer chemicals than competitive papers. Depending on the grade, the carbon footprint for Align papers is 35% to 86% lower than for competitive papers.
First Nations - Resolute developed and published a formal policy on First Nations relations.
Health and Safety - The Company achieved a world-class Occupational Safety and Health Administration (OSHA) incident rate of 1.13, meeting Resolute's goal of 1.2 or below. For 2013, the Company is committed to further reducing the number of workplace injuries and has set an OSHA target of 1.0 or below.
While the 2012 Annual Report is Resolute's first report combining financial and sustainability performance, this is the Company's fourth year publishing sustainability-related performance data. More comprehensive data and details related to the Company's sustainability performance for 2012 will be included in its GRI-compliant Annual Sustainability Report to be released online later this year.
SOURCE: Resolute Forest Products Inc.