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Rayonier Advanced Materials Inc. (RYAM) will suspend operations at its Temiscaming High Purity Cellulose (HPC) plant indefinitely starting July 2, 2024. The decision aims to reduce operating losses, improve consolidated free cash flow, and align with the company's long-term growth strategy. The suspension will lead to a decrease in global HPC production, affecting approximately 30% of specialty cellulose materials. This move will result in about 275 layoffs. The plant's challenges include market weakness, wood fiber availability, and high costs. RYAM remains committed to supporting its customers' cellulose needs and maintains operations at its paperboard and high-yield pulp plants.
Rayonier Advanced Materials Inc. (RYAM) sospenderà indefinitivamente le operazioni presso lo stabilimento di Temiscaming High Purity Cellulose (HPC) a partire dal 2 luglio 2024. La decisione è volta a ridurre le perdite operative, migliorare il flusso di cassa libero consolidato e allinearsi con la strategia di crescita a lungo termine dell'azienda. La sospensione comporterà una riduzione della produzione globale di HPC, influenzando circa il 30% dei materiali di cellulosa specializzata. Tale azione porterà a circa 275 licenziamenti. Le difficoltà dello stabilimento includono la debolezza del mercato, la disponibilità di fibre di legno e costi elevati. RYAM rimane impegnata a supportare le esigenze di cellulosa dei suoi clienti e continua le operazioni nei suoi impianti di cartone e polpa ad alto rendimento.
Rayonier Advanced Materials Inc. (RYAM) suspenderá indefinidamente las operaciones en su planta de Temiscaming de Celulosa de Alta Pureza (HPC) a partir del 2 de julio de 2024. La decisión tiene como objetivo reducir las pérdidas operativas, mejorar el flujo de caja libre consolidado y alinearse con la estrategia de crecimiento a largo plazo de la compañía. La suspensión llevará a una disminución en la producción global de HPC, afectando aproximadamente el 30% de los materiales de celulosa especializados. Este movimiento resultará en unos 275 despidos. Los desafíos de la planta incluyen la debilidad del mercado, la disponibilidad de fibra de madera y altos costos. RYAM sigue comprometida a apoyar las necesidades de celulosa de sus clientes y mantiene operaciones en sus plantas de cartón y pulpa de alto rendimiento.
Rayonier Advanced Materials Inc. (RYAM)는 2024년 7월 2일부터 테미스캐밍 고품질 섬유소(HPC) 공장의 운영을 무기한 중단할 예정입니다. 이 결정은 운영 손실을 줄이고, 통합된 자유 현금 흐름을 개선하며, 회사의 장기 성장 전략과 일치시키기 위한 것입니다. 이 중단은 전 세계 HPC 생산 감소로 이어지며, 전문 세포소 재료의 약 30%에 영향을 미칠 것입니다. 이 조치로 약 275명의 직원이 해고될 예정입니다. 공장의 어려움에는 시장 약세, 목재 섬유의 공급 문제 및 높은 비용이 포함됩니다. RYAM은 고객의 섬유소 요구를 지원하는 데 계속 헌신하며, 자사의 판지 및 고수율 펄프 공장에서의 운영을 유지합니다.
Rayonier Advanced Materials Inc. (RYAM) suspendra indéfiniment les opérations dans son usine de Cellulose de Haute Pureté (HPC) de Témiscaming à partir du 2 juillet 2024. Cette décision vise à réduire les pertes d'exploitation, améliorer le flux de trésorerie libre consolidé et s'aligner sur la stratégie de croissance à long terme de l'entreprise. La suspension entraînera une diminution de la production mondiale de HPC, affectant environ 30% des matériaux de cellulose spécialisée. Cette mesure entraînera environ 275 licenciements. Les défis de l'usine comprennent la faiblesse du marché, la disponibilité des fibres de bois et les coûts élevés. RYAM reste engagée à soutenir les besoins en cellulose de ses clients et maintient les opérations dans ses usines de carton et de pâte à haut rendement.
Rayonier Advanced Materials Inc. (RYAM) wird den Betrieb seiner Temiscaming-Anlage für Hochreinheitszellulose (HPC) ab dem 2. Juli 2024 auf unbestimmte Zeit einstellen. Diese Entscheidung zielt darauf ab, Betriebsverluste zu reduzieren, den konsolidierten freien Cashflow zu verbessern und sich auf die langfristige Wachstumsstrategie des Unternehmens auszurichten. Die Einstellung wird zu einem Rückgang der globalen HPC-Produktion führen, wobei etwa 30% der Spezialzellulosematerialien betroffen sind. Diese Maßnahme wird etwa 275 Entlassungen zur Folge haben. Die Herausforderungen des Werks umfassen Marktschwäche, Verfügbarkeit von Holzfasern und hohe Kosten. RYAM bleibt weiterhin verpflichtet, die Zellulosebedürfnisse seiner Kunden zu unterstützen und führt die Betriebe in seinen Pappe- und Hochausbeute-Zellstoffwerken fort.
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The indefinite suspension of operations at the Temiscaming HPC plant may lead to reduced global HPC production, impacting around 30% of specialty cellulose materials.
The decision to suspend operations will result in approximately 275 layoffs, affecting employees at the Temiscaming facility.
The challenges of market weakness, uncertain wood fiber availability, and high capital and fixed costs have contributed to the decision to suspend operations at the HPC plant.
Insights
The suspension of operations at Rayonier Advanced Materials' Temiscaming High Purity Cellulose plant is a significant strategic shift reflecting the company's response to external market pressures, including persistent market weakness and the challenging cost structure associated with this facility. By reducing the global production capacity of HPC, a material key to multiple industrial applications, this move is likely to have ramifications for the supply chain dynamics in the HPC market. It demonstrates a focus on cash flow optimization and balance sheet improvement, which could be seen favorably by investors focused on financial stability and operational efficiency in the long-term. The reduction of fixed costs and potential mitigation of operating losses are pertinent points for investors, especially those concerned with the company's leverage and liquidity.
The approximately 275 layoffs resulting from the suspension at the Temiscaming plant raise concerns about the company's social responsibility and the economic impact on the local community. Investors should note that the company's approach to managing this workforce reduction, in accordance with the collective agreement and local laws, speaks to its corporate values and ethical stance. Such factors can influence public perception and may have implications for the company's reputation, which in turn can affect customer loyalty and investor sentiment. A well-managed transition for affected employees can mitigate negative impacts and reflect positively on the company's brand.
With a portion of the Temiscaming facility's output historically dedicated to specialty cellulose materials, the suspension of operations could potentially create a shortfall in the market, impacting prices and availability. Specialty cellulose is fundamental in various end-use sectors, so this development may prompt customers to seek alternative suppliers, which could reshape the competitive landscape. For investors, understanding how RYAM plans to support its customers' needs in the short- and long-term will be essential. Securing alternative sourcing or adjusting production at other facilities could be key in maintaining customer relationships and the company's market position during this transition.
JACKSONVILLE, Fla.--(BUSINESS WIRE)--
Rayonier Advanced Materials Inc. (NYSE: RYAM) is announcing that, effective July 2, 2024, it will suspend operations at its Temiscaming High Purity Cellulose (HPC) plant for an indefinite period. As previously communicated, the Company remains committed to operating its assets profitably.
Given current market conditions and high capital and fixed costs associated with the HPC plant, this decision will help mitigate the plant’s ongoing operating losses and improve the Company’s consolidated free cash flow. Today’s announcement is aligned with the Company’s focus on improving its balance sheet, leverage position and overall financial performance toward execution of its long-term growth strategy.
The suspension, which will be carried out in a safe and environmentally sound manner, will result in a reduction of RYAM’s annual global HPC production. The Temiscaming HPC facility has an annual production capacity of approximately 150,000 metric tons, with roughly 30 percent historically dedicated to specialty cellulose materials. The Company will be working directly with its customers to support their specialty cellulose needs in both the short- and long-term. Today’s announcement will result in approximately 275 layoffs.
“Persistent market weakness, uncertain availability of affordable wood fiber, and high capital and fixed costs have posed significant challenges for the Temiscaming HPC plant,” said De Lyle Bloomquist, President and Chief Executive Officer. “This decision, which we do not take lightly, is made only after a rigorous strategic review in which multiple alternatives were thoroughly explored. We are mindful of the impact this will have on affected employees and will take appropriate measures to assist these employees in keeping with the collective agreement, RYAM values and applicable law.”
This decision does not affect RYAM’s paperboard and high-yield pulp plants located adjacent to the Temiscaming HPC plant. These two plants, which are part of an ongoing sales process announced last October, remain competitive and will continue to operate at full capacity.
About RYAM
RYAM is a global leader of cellulose-based technologies, including high purity cellulose specialties, a natural polymer commonly used in the production of filters, food, pharmaceuticals, and other industrial applications. The Company also manufactures products for paper and packaging markets. With manufacturing operations in the U.S., Canada and France, RYAM generated $1.6 billion of revenue in 2023. More information is available at www.RYAM.com.
When will Rayonier Advanced Materials Inc. suspend operations at its Temiscaming High Purity Cellulose (HPC) plant?
Effective July 2, 2024, the operations at the HPC plant will be suspended indefinitely.
How will the suspension of operations at the Temiscaming HPC plant impact Rayonier Advanced Materials Inc.?
The suspension aims to reduce operating losses, improve consolidated free cash flow, and align with the company's long-term growth strategy.
How many layoffs are expected due to the suspension of operations at the Temiscaming HPC plant?
Approximately 275 layoffs are anticipated as a result of the plant's suspension.
What are the challenges faced by the Temiscaming HPC plant that led to the decision to suspend operations?
Market weakness, uncertain wood fiber availability, and high capital and fixed costs have posed significant challenges for the plant.
Will the suspension of operations at the Temiscaming HPC plant affect RYAM's paperboard and high-yield pulp plants?
No, the suspension only applies to the HPC plant and does not affect the adjacent paperboard and high-yield pulp plants, which will continue to operate at full capacity.
How will Rayonier Advanced Materials Inc. support its customers' specialty cellulose needs during the suspension of operations at the Temiscaming HPC plant?
The company will work directly with its customers to assist them in both the short- and long-term with their specialty cellulose needs.
What is the annual production capacity of the Temiscaming HPC facility?
The facility has an annual production capacity of around 150,000 metric tons, with approximately 30 percent historically dedicated to specialty cellulose materials.
