September 17, 2009 / 10:13 PM / 9 years ago

AbitibiBowater cuts paper production further

* Machines being idled indefinitely

* Reorganization effort continues

* Union says closures could have been prevented

VANCOUVER, British Columbia, Sept 17 (Reuters) - Papermaker AbibitiBowater Inc [ABWTQ.PK] will idle its Beaupre, Quebec, mill and cut production at four other facilities, the company said on Thursday.

Abitibi, which is trying to restructure under court protection, said the cutbacks were forced by weak market conditions. It said the move, along with curtailments already under way at two other mills, will reduce newsprint and commercial paper production by 1.3 million tonnes.

The Beaupre commercial printing paper plant will be idled indefinitely at the end of October. At the same time, a commercial printing paper machine will be idled at its mills in Fort Frances, Ontario.

A newsprint machine at its Coosa Pines, Alabama, mill will be halted immediately, while one in Claremont, Quebec, will shut off at the end of October. Newsprint production at its Mersey, Nova Scotia, mill will be cut by 50 percent.

Abitibi, based in Montreal, but incorporated in the United States, crumpled under an overwhelming debtload and filed for protection from creditors in April.

It is still working with creditors to develop a restructuring plan, a spokesman said.

The union representing the Canadian mill workers said the closures were the “end game of AbitibiBowater’s corporate machinations and an attempt to build an empire based on debt.”

The Communications, Energy and Paperworkers also blasted what it said was the Canadian government’s failure to help the industry with loan guarantees that would aid companies hit by the tight credit market.

“These closures were preventable,” union President Dave Coles said. (Reporting by Allan Dowd; editing by Rob Wilson)

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