Mercer International Inc. Announces 30 Days Downtime at its Celgar Mill

Rhea-AI Summary

Mercer International Inc. (Nasdaq: MERC) announced an unexpected downtime of approximately 30 days at its Celgar mill in July 2020, in addition to a planned five-day maintenance. This results in a total of 52,000 ADMTs of production loss, primarily due to reduced fiber availability stemming from Covid-related sawmill curtailments in British Columbia. Compounding the issue are new stumpage charges and complex rules that have left harvested pulpwood unused in the forests. The company operates globally with significant production capacities in pulp and lumber.

Positive

• Company's global operations in Germany and Canada with a consolidated annual production capacity of 2.2 million tonnes of pulp and 550 million board feet of lumber.

Negative

• Unexpected 30-day downtime resulting in 52,000 ADMTs production loss, affecting overall output.
• Reduced fiber availability due to Covid-related sawmill curtailments in British Columbia.
• Implementation of sawlog equivalent stumpage charges and complex rules leading to unsold harvested pulpwood.

NEW YORK, May 29, 2020 (GLOBE NEWSWIRE) -- Mercer International Inc. ("Mercer") (Nasdaq: MERC) reports that its Celgar mill, in addition to regularly planned maintenance downtime of five days, will be taking approximately 30 days of additional downtime (aggregate 52,000 ADMTs) in July 2020. The additional downtime largely results from reduced fiber availability in the mill's procurement area as a result of Covid related sawmill curtailments in British Columbia, the imposition of sawlog equivalent stumpage charges on pulpwood and complex stumpage rules which result in a significant amount of pulp wood already harvested being left to burn in the forest.

Mercer International Inc. is a global forest products company with operations in Germany and Canada with consolidated annual production capacity of 2.2 million tonnes of pulp and 550 million board feet of lumber. To obtain further information on the company, please visit its website at https://www.mercerint.com.

The preceding includes forward looking statements which involve known and unknown risks and uncertainties, including regarding the expected duration of expected downtime at our mill, which may cause our actual results in future periods to differ materially from forecasted results. Words such as "expects", "anticipates", "projects", "intends", "designed", "will", "believes", "estimates", "may", "could" and variations of such words and similar expressions are intended to identify such forward-looking statements. Among those factors which could cause actual results to differ materially are the following: the highly cyclical nature of our business, raw material costs and availability, our level of indebtedness, competition, foreign exchange and interest rate fluctuations, our use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to our production, market conditions and other risk factors listed from time to time in our SEC reports.

APPROVED BY:

David M. Gandossi, FCPA, FCA
Chief Executive Officer
(604) 684-1099

David K. Ure, CPA, CGA
Senior VP Finance, CFO & Secretary
(604) 684-1099

FAQ

What is the reason for Mercer International's downtime in July 2020?

Mercer International's downtime is primarily due to reduced fiber availability caused by Covid-related sawmill curtailments and complex stumpage rules.

How much production loss is expected for Mercer International due to the downtime?

The total production loss is expected to be approximately 52,000 ADMTs.

What is Mercer's annual production capacity?

Mercer International has a consolidated annual production capacity of 2.2 million tonnes of pulp and 550 million board feet of lumber.

When will Mercer International's Celgar mill undergo maintenance?

The Celgar mill will undergo a planned maintenance downtime of five days, along with an additional 30 days of unexpected downtime.