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Industry News | Time: Dec 13 2019 8:20AM
Brazil's dissolving pulp producer Jari shuts mill indefinitely after new strike
 
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SAO PAULO, 10 December 2019 (PPI Latin America) - Brazilian dissolving pulp (DP) producer Jari closed again after a workers' strike demanding payment of delayed salaries. The company took a long 36-day shutdown at its Monte Dourado mill, Pará state, in October-November and registered an accident with a pipe rack after the downtime, resuming operations for only a few days in December.

PPI Latin America confirmed with the company's CEO Patrick Nogueira that the mill was idled on Dec. 7 and will not ship any new DP tonnage this year. "We are working to settle a deal with workers and the mill is indefinitely closed due to that, not that we will not return to operations at some point. We hope to resume the mill in 2020, we expect already in January."

In an official document sent to the local union, Nogueira stated that Jari tried everything in its power at the moment to solve the impasse "created by its employees... The company even proposed the departure of the next ship [without a full load] assuming losses to face the emergency needs of all workers. All these troubles were caused by the maintenance downtime that was taken, even considering the delicate moment of the company, due to the legal obligation and to ensure the safety of its workers. As it is known for years, Jari depends solely on pulp sales' revenues and without it the company is unable to meet its financial commitments."

The CEO stated to PPI Latin America that the company is not talking to any potential buyers or partners for the mill at the moment, as Jari has filed for bankruptcy protection. "We have several steps to follow in this process and we are focused on it now."

The executive also confirmed that after starting up again, Jari is expected to operate at 70% of its installed capacity of 250,000 tonnes/yr of DP, due to issues with working capital.

Jari filed for bankruptcy protection on July 17 in order to work on a plan to pay debts estimated at Real 1.75 billion ($464.5 million). The company is also looking for a potential partner to control the mill and invest in a new DP line at the same site.
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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