Due to COVID-19. Norbord announces big production cuts

TORONTO (News release) -- Norbord Inc. announced that effective March 30, it will commence reducing production across its portfolio of North American oriented strand board (OSB) mills in response to the demand impact of the COVID-19 pandemic.

The Company will adjust its operating configuration by reducing shifts and running a number of its North American mills on alternating schedules to match production with an anticipated reduction in OSB demand and to comply with government-imposed restrictions. This approach will allow the Company to continue to serve its customers, retain operating flexibility and preserve jobs for as many employees as is practicable, while at the same time being prepared to quickly resume normal operations when economic conditions improve.

This adjusted operating configuration will initially result in a 25% reduction to Norbord's currently operating North American mill capacity. The OSB demand situation is changing day-by-day, and the Company's ability to continue to operate any of its mills could be influenced by factors outside Norbord's control, including government-imposed restrictions, therefore additional operating adjustments may be necessary. The Company does not intend to provide further operational updates unless there is a significant change in this curtailment strategy.

Norbord's European business is prepared to take similar action and will adjust mill operating schedules as needed to match production with demand.

In addition, the Company is deferring non-critical capital projects and further reducing its 2020 capital expenditures budget by 25%, from US $100 million to US $75 million, to preserve cash and balance sheet flexibility.

"These are extraordinary times and difficult decisions, but they reflect the uncertainties facing businesses around the globe," said Peter Wijnbergen, Norbord's President & CEO. "Of utmost importance, our first priority remains the health and safety of our employees, and in response we have been implementing a number of measures across our operations to mitigate potential exposure to COVID-19. Further, we believe that reducing operating schedules across our mills gives us the best flexibility to adapt to the ever-changing demand landscape while still meeting our customers' needs, reducing hardship on our employees and ensuring we are prepared for a return to growth when markets normalize."
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