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Resolute: A first virtual head office?

MONTREAL (From news reports) -- Before the pandemic, Resolute was considering teleworking for its head office employees, explains Yves Laflamme, CEO of the company. "We wanted to do a pilot project, but since the start of the pandemic, we have had our pilot project. We are 100% teleworking and it still works well, "he said.

Resolute has already occupied two and a half floors of the building located at 111 Robert-Bourassa in downtown Montreal. Half a floor and then an entire floor have already been sublet. If the business decides to renew its lease or move, it will need half the space, or 40,000 sq. Ft.2, rather than 80,000.

About 60 Resolute employees at head office were laid off at the start of the pandemic. There are around 400 left, says Yves Laflamme.

The decision on the future of the head office will not be his, as the CEO of Resolute is retiring on 1 March, after 39 years with the company.

His last year has been "better than we expected at the start," he said of the 2020 financial results.

"The end of 2019 had been difficult and the beginning of 2020 too," he explains. When the pandemic arrived, it was thought it would be even worse, but the second half of the year took the opposite tangent. "

The confined consumer appetite for home improvement, which is causing lumber demand and price to jump, saved Resolute's year, according to its CEO.

The company posted a net loss of US $ 52 million in the fourth quarter, but ended the year with a profit of US $ 10 million, which compares to a loss of US $ 47 million in 2019. Revenue for the year was down 4 %, to US $ 2.8 billion.

Lumber and tissue paper made a positive contribution to the 2020 results, but the other sectors of activity, namely newsprint, specialty papers and kraft pulp, had a difficult year.

Resolute, the largest manufacturer of newsprint in North America, sees the demand for this product melt year after year. In 2020, demand for newsprint declined a further 29% in North America and 23% globally.

Two paper mills, Amos and Baie-Comeau, had to cease their activities. That's a production reduction of 500,000 tonnes per year.

The CEO of Resolute was not very optimistic about the future of the sector. "We are not dreaming," said Yves Laflamme about a possible return in demand. Converting these factories to another type of product is not easy, he said. "It's not easy to reposition a newsprint mill," he explained. We have to put in new machines, and that requires a lot of investment. "

Resolute Forest Products is hit hard by the tariffs imposed by the United States on imports of Canadian lumber. Since the start of the conflict, the company has had to spend 249 million in this area. If the record price of wood in 2020 more than offset the payment of export taxes, "it is so much money that we cannot invest", underlines Yves Laflamme.

Resolute does not expect the new US administration to help resolve the softwood lumber dispute between Canada and the United States. "It's always more difficult with the Democrats," said Yves Laflamme, who lived through several episodes of the timber war.

The current Vice-President and Chief Financial Officer, Rémi Lalonde, will succeed Yves Laflamme on 1 March.

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