Norbord Announces Indefinite Curtailment of Line 1 at Cordele, Georgia OSB Mill
Norbord Inc. announced that effective mid-November, it will indefinitely curtail production on Line 1 of its two-line oriented strand board (“OSB”) mill in Cordele, Georgia until further notice.
Cordele Line 1 has been operating on a reduced 10/4 operating schedule since early September. Cordele Line 2 will continue to operate on a full production schedule.
The Cordele Line 1 indefinite curtailment is due to continued poor market conditions and lower-than-anticipated OSB demand to-date, particularly in the South East region. These conditions no longer support the economic operation of Line 1 at this time. The indefinite curtailment will ensure Norbord continues to only produce what the company can sell, in the most efficient and cost-effective manner.
“This is a difficult decision and a very disappointing outcome, but it reflects the economic realities facing our business,” said Peter Wijnbergen, Norbord’s President & CEO. “We have an experienced, hard-working team at Cordele and we thank them for their commitment to the company, our customers and our suppliers.”
Norbord will continue to serve its customers without disruption from Cordele Line 2 and from its other operating OSB mills in North America. The Cordele, Georgia mill has two production lines and a total stated annual production capacity of 1,040 million square feet (MMsf) (3/8-inch basis). The indefinite curtailment of Line 1 will affect 440 MMsf (3/8-inch basis) or 42% of the mill’s available capacity (6% of Norbord’s North American OSB capacity). Approximately 45 employees will be impacted by this curtailment.
As a result of this curtailment, the Company will record a non-cash impairment charge of $10 million (pre-tax) against the carrying value of the Cordele mill’s fixed assets as part of its third quarter 2019 earnings results.
Norbord Inc. is a leading global manufacturer of wood-based panels and the world’s largest producer of oriented strand board (OSB). In addition to OSB, Norbord manufactures particleboard, medium density fibreboard and related value-added products. Norbord has assets of approximately $1.9 billion and employs approximately 2,500 people at 17 plant locations in the United States, Canada and Europe. Norbord is a publicly traded company listed on the Toronto Stock Exchange and New York Stock Exchange under the symbol “OSB”.
Robert Winslow – Vice President, Investor Relations & Corporate Development – (416) 365-0705
Source: Norbord Inc.