KINGSEY FALLS, Québec – Cascades Inc. announced today (9 July) will cease its Kraft paper manufacturing activities in the East Angus (Québec) plant because of unfavorable market conditions and the failure of discussions concerning the plant's transfer and turnaround.

Close to 175 employees will be affected by the closure, which will come into effect by October 3, 2014.

By closing the facility, Cascades said it is withdrawing from the Kraft paper sector definitively.

"With the arrival of new competitors that convert newsprint paper machines to produce Kraft paper, and the ongoing weakening of market conditions for our products, the East Angus plant has not managed to maintain a competitive edge in the market despite significant investments and serious recovery efforts," explained Luc Langevin , President and Chief Operating Officer of Cascades Specialty Products Group. "Last November, we announced to employees our decision to withdraw from the industry. At the time, we offered them the plant debt free. After several months of ongoing efforts on the part of buyer Gino Lévesque, the Québec government and Cascades to come up with a financial package, the project was abandoned because of a lack of new investors. With the failure of the turnaround project and the loss of numerous key employees, today we are forced to announce the end of these activities."

"Naturally, we are very disappointed that the project failed," said Mario Plourde , President and CEO of Cascades. "However, we would like to thank the employees' provisional committee, the buyer and the Government of Québec for the work they put into the project over several months in the attempt to save jobs. Since our strategic orientations are focused on growth in the packaging, tissue paper and recovery sectors, it became impossible to keep the plant open with its inability to regain profitability. Following today's announcement, Cascades will assume all of the plant's responsibilities, notably the employee pension plan."

To assist the employees affected by the shutdown, Cascades will do everything in its power to relocate personnel to other units. It will work with the union and the governments to reduce the impact of the announcement on the workers and the community.

This announcement does not concern the coated boxboard manufacturing plant located in East Angus.

Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibers.