UPDATE 1-Cascades says Ontario containerboard mill to remain open

Tue May 29, 2012 5:41pm EDT

May 29 (Reuters) - Cascades Inc said it has dropped plans to shut down its containerboard mill in Ontario, after the green packaging and tissue paper products maker reached an agreement with its employees.

Cascades had said in April that it planned to close its money-losing Norampac containerboard mill in Trenton. A year of failed negotiations with the Communications, Energy and Paperworkers Union of Canada (CEP) had also prompted the decision to shut the mill.

Cascades said on Tuesday a significant majority of employees voted in favour of its "final offer" and it has now decided to keep the mill open. The company did not specify the labor terms of the offer it made employees.

"The challenges faced by this mill are by no means over. However, reaching this agreement with our employees is a vital pre-condition," said Marc-André Dépin, CEO of the company's Norampac business.

Shares of the company closed at C$4.44 on Wednesday on the Toronto Stock Exchange.

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