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Abitibi Bowater

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About Abitibi Bowater

Like many sturdy trees, Resolute Forest Products, formerly AbitibiBowater, is a product of grafting. Formed by the combination of two of the world's largest newsprint makers -- Abitibi-Consolidated and Bowater, Resolute makes newsprint, commercial printing paper, mechanical paper, pulp, and wood products. It relies on 18 pulp and paper mills and 24 – more... wood products plants in Canada, South Korea, and the US to distribute its products to about 90 countries; it is one of the world's largest recyclers of newspapers and magazines. Resolute owns or has cutting rights to more than 40 million acres of forestland in North America. In early 2009 the company filed for bankruptcy in the US and Canada and emerged in 2010.

At the time Resolute filed Chapter 11, it was almost $9 billion in debt; it emerged owing less than $1 billion dollars. Along with the expunged debt, so went 15% of its employee base.

Some of the company's mills, such as the Mokpo facility in South Korea, were not affected by the bankruptcy. The ax, however, fell on the company's UK-based Bridgewater Paper Company Ltd. (BPCL) recycled-newsprint mills, forcing it to file for UK administration (bankruptcy) in early 2010, leaving 4,000 workers without jobs and Resolute with no control over BPCL's operations. The company's restructuring plan also drove the sale of a number of Resolute's North American newsprint mill facilities, including Alabama River (Alabama), Calhoun (Tennessee), and the century-old Grand Falls (Newfoundland). It also sold its Texas Material Recycling Facilities to Waste Management Recycle America for $12 million.

Resolute continues to focus on expanding its product mix and converting its traditional product lines to other market applications. In 2010 it stopped its newsprint production at its Coosa Pines (Alabama) paper mill and switched to producing packaging papers. It is taking similar steps at other mills to convert its newsprint output to that of specialty papers.

To regain its financial footing, Resolute has sold a number of non-core assets; proceeds are used to reduce debt and increase its liquidity. Starting in 2009, the company sold hundreds of thousands of acres of timberland in Quebec. It divested its majority interest in the hydroelectric dam on the Manicouagan River to Hydro-Québec. In mid-2011 Resolute shed its 75% stake in ACH Limited Partnership for C$300 million (more than $313 million). The buyer, a Canadian group comprising a large institutional investor and a private renewable energy company, gained the partnership's holdings, including Ontario-based hydroelectric generating assets valued at about C$640 million (almost $670 million).

Compared to its revenue loss of more than 35% in 2009 over 2008, the company experienced a sales increase of almost 9% in 2010 over 2009, attributed to higher prices charged for company products. Resolute also posted $2.6 billion in net income in 2010 compared to a year prior, when it suffered a net income loss of $1.5 billion. The company cites a decrease in operating loss and interest expense and an increase in income tax benefit as the reasons for the increase. Newsprint continued to be on the losing side, but market pulp and wood products realized increases of 38% and 46%, respectively; this was attributed to higher shipment volumes and transaction prices. For wood products, the burgeoning Canadian housing market offset the decrease in US housing starts.

The combination of Abitibi and Bowater in 2007 (52%-owned by former Bowater shareholders and 48%-owned by former Abitibi shareholders) was anticipated to create a stronger company able to compete in a global market. The company has 35% of the market share in newsprint production in North America. It is also North America's third largest publicly traded paper and wood products company (behind #1 International Paper and #2 Weyerhaeuser).

Along with the merger, however, came an enormous debt. Moreover, the paper industry experienced its own perfect storm. A credit restricted environment brought on a decline in advertising, which prompted newspaper closings and industry-wide cutbacks. Newsprint demand in North America fell by more than 30% in 2009. Seeing no other way to deal with billions in debt, the company and certain of its subsidiaries (within US and Canada) filed voluntary petitions in the US under Chapter 11, and sought creditor protection under the Companies' Creditors Arrangement Act in Canada. 

The company's reportable segments include newsprint, commercial printing papers (coated and specialty), market pulp, and wood products. Its newsprint is used in advertising inserts, flyers, brochures, circulars, telephone directories, and commercial guides; in 2010 more than 60% of the company's total newsprint production was sold to markets outside North America, compared to 35% in 2009. Resolute's commercial papers are used for magazines, catalogs, instructional manuals, maps, and books. Branded products include AbiBow (Brite and Gloss), Ecopaque, and Ecolaser. Its market pulp (over 1 million metric tons per year) is sold to a number of overseas markets, and is used in tissue, paper towels, diapers, and printing and writing papers. Its wood products include CoosAbsorb, TB Hardwood, and Softwood Kraft. It also remanufactures and engineers wood for use in mobile homes, roofing, and flooring materials. – less

Abitibi Bowater Employer Reviews
Boiler Operator (Former Employee), ALMay 1, 2014
Administrative Assistant/Training Coordinator (Former Employee), Childersburg, ALNovember 11, 2013
Papermill Tech (Former Employee), Calhoun, TNOctober 21, 2013
Maintenance Planner (Former Employee), Calhoun TNAugust 2, 2013
Paper Maker (Current Employee), Grenada, MSMarch 22, 2012

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