AbitibiBowater, Inc. (fka ABWTQ)

[jedijazz]

NEWS$$$$ - Posted December 8, 2010 at 10:08
"We believe that the worst is behind us," Peter Scott, vice-president



(Jonquière) AbitibiBowater sees light at the end of the tunnel and its leaders believe that the multinational will continue to operate for several more years.

At least that seems to be betting that the company, governments and creditors. Workers and retirees want to maintain their gains.

Normally, AbitibiBowater will emerge from all her problems tomorrow, December 9. "Basically, we want to free ourselves as soon as Thursday. But we will wait, because the process has been delayed twice in recent weeks, "said Peter Scott, vice-president of the company.

He recalled that the company has placed 20 months ago, under the law protection against creditors in Canada and the United States.

"If we had to get there, it was after a long process. Everything has not played in just six months. We must speak of a period of nearly 10 years. The company has not made a net profit since 2002. You could do a time like this, but at some point, it no longer and that is what happened in 2009, "he said.

The reasons for the downward spiral can be explained by several factors. There was the exchange rate. In 2004, the Canadian dollar was worth 0.76 U.S. cents and its value rose to 0.96 percent this year. "As we export a lot of our products, this has meant an increase in our costs by 26%. The newsprint consumption has fallen by 50 percent (from 10 to 5 million tons annually) and there was a significant drop in housing starts (2 000 000 600 000). The selling price of paper and lumber also suffered cuts, remembering that production costs were increased, especially with oil (106%) and labor (12%), "says Pierre Laberge.

Not to mention that the company was with a debt of nearly seven billion dollars, which cost him $ 600 million in interest costs annually.

"At one point we had more than one billion annual cost to perform before thinking about making money. We can not do it, "says Laberge.

Given this situation, AB has begun implementing a restructuring plan. The leaders closed 10 plants and eliminated 3.4 million tons of production capacity, has sold assets for $ 940 million and have increased the debt of $ 6.8 billion to $ 850 million, a drain of 88 per cent .

AbitibiBowater has also made annual reductions in certain contracts for a savings of $ 80 million in reduced costs of labor ($ 95 million) and procurement and transportation (80 million).

"We think the worst is behind us and that we are better positioned opposite the market. I believe we are well positioned for the future, "said the vice president of AB.

The multinational has operations in Canada, the United States and Asia, employs 11,000 people worldwide, including 8,000 in Canada and sells its products in over 70 countries. AbitibiBowater produces seven million tons of paper annually and 2.2 billion board feet (fbm).
http://www.cyberpresse.ca/le-quotidien/201012/08/01-4350363-nous-croyons-que-le-pire-est-derriere-nous-pierre-laberge-vice-president.php