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Catalyst Announces Steps to Improve Profitability
Vancouver, British Columbia, Canada, 30 May 2007 -- Catalyst Paper announced a series of initiatives today in a continuing drive to reduce costs and improve profitability. They include:
- Indefinite curtailment of one paper machine, effective 01 September 2007;
- Elimination of 130 support positions bringing the overall workforce reduction to 480 in 2007;
- Relocation of the corporate office from Vancouver to Richmond; and
- Centralization of some mill and corporate administrative functions in Nanaimo.

A CAD 8 million improvement in annual profitability is expected from the indefinite closure of the Port Alberni Division's No. 4 paper machine. This will displace 134,000 metric tons of the company's least profitable newsprint business, reduce its highest cost fiber requirements, and result in the layoff of 185 staff and hourly employees additional to the workforce reductions announced. Lightweight coated and directory capacity will remain unchanged.

The overhaul of corporate structure, involving reduction of 130 support positions, centralization of functions, and office moves, is expected to deliver annual savings of CAD 16 million with one-time costs of CAD 19 million.

"Reducing costs is an immediate priority given the high Canadian dollar and the decline in North American newsprint consumption," said Richard Garneau, president and chief executive officer. "While we regret the strain these cost-saving measures will place on the employees involved, they are necessary to the long-term success of our business and our position in key market segments."

Catalyst is a leading producer of mechanical printing papers in North America. The company also produces market kraft pulp and owns western Canada's largest paper recycling facility. With five mills located within a 160-km radius on the south coast of British Columbia, Catalyst has a combined annual capacity of 2.4 million metric tons of product. Catalyst Paper Corporation common shares trade on the Toronto Stock Exchange under the symbol CTL. The company is headquartered in Vancouver, British Columbia.


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