West Fraser Timber to permanently cut capacity at Hinton pulp mill (NYSE:WFG)

West Fraser Timber (NYSE:WFG) announced Tuesday after the close that it will permanently reduce capacity at its pulp mill in Hinton, Alberta, by the end of this year.

West Fraser said one of Hinton Pulp’s two production lines will shut, while the remaining line will produce Unbleached Kraft Pulp rather than Northern Bleached Softwood Kraft Pulp.

The capacity reduction means staffing levels will drop to 270 from 345 positions.

As the world moves away from single-use plastics, UKP is used increasingly in a wide variety of everyday items including cardboard packaging, grocery bags, fibre-cement board and specialty products.

The company expects a ~$13M impairment charge will be recorded in Q1 associated with the writedown of equipment that will be decommissioned permanently as part of the transition to UKP.

Seeking Alpha contributor Individual Trader suggests investors “buy the dip” in West Fraser.