Financial information is in Canadian dollars.
Dive Brief:
- Montreal-based paper packaging and envelopes maker Supremex announced a restructuring plan Tuesday as it estimated a $10 million to $12 million hit to annualized operating earnings from tariffs.
- The plan has three primary focuses. Supremex will consolidate certain U.S. and Canadian envelope locations into more efficient “centres of excellence;” shrink its Saint-Laurent, Quebec, commercial print facility and transfer folding carton production to its flagship folding carton facility in Lachine, Quebec; and accelerate technology deployment for “core back-office processes.”
- The company is eliminating 6% of its workforce, or 60 positions. Supremex projects the plan will lead to $5.7 million in annualized cost savings across Q4 2026 and Q1 2027. Still, the company says this has no impact on growth strategy and investments.
Dive Insight:
While numerous companies and trade organizations have expressed concerns over the impacts of U.S.-Canada tariffs on North American fiber supply chains, few have necessarily disclosed quantifiable impact. Supremex shared an actual dollar-figure this week.
Wood products, pulp and paper were caught up on both sides of American and Canadian tariffs announced in August and September. Supremex works across the neighboring countries, operating nine manufacturing facilities across four Canadian provinces as well as four manufacturing facilities across three U.S. states. Supremex leadership “believes the current tariff environment will prove temporary” but is operating under the assumption they will remain.
Based on current conditions and mitigation efforts — but excluding the new restructuring plan — Supremex expects tariffs will have a net impact on its operating earnings, before taxes, of between $10 million and $12 million on an annualized basis. In the most recent quarterly earnings report, operating earnings were about $2.5 million.
“The decision to reduce our workforce is the most difficult one a management team can make,” President and CEO Stewart Emerson said in the announcement. “At the same time, the trade environment has introduced significant new costs, and we have a responsibility to act decisively to protect the long-term health of the business for our employees, customers and shareholders.” The company expects to record a $1.8 million restructuring charge in Q4 related to severance and other employee-related costs.
“These actions position Supremex to weather the storm — and we believe this storm, while fierce, is a passing one,” Emerson said in the announcement. The plan is “aimed at safeguarding our profitability and ensuring that when trade conditions normalize, Supremex will emerge leaner, stronger and better positioned to execute its growth strategy in paper-based packaging.”
This comes after Supremex recently announced a $4 million investment to enhance folding carton and e-commerce packaging operations in the Indianapolis and Chicago areas. It also acquired Toronto-area carton specialist Goldrich Printpak, which reportedly had annual sales of about $30 million. Supremex says it’s still moving forward with its growth strategy.
“Supremex continues to pursue targeted acquisitions in packaging, advance the integration of its recently acquired businesses, and invest in the capabilities that support its long-term transformation into a diversified North American leader in paper-based packaging,” according to the announcement.
In Supremex’s most recent earnings release for the second quarter, the company reported its had its third consecutive and accelerating quarter of revenue growth in the packaging segment. Total revenues reached $71.6 million.
Supremex previously made cuts in 2024 when it closed a Niagara Falls, New York, envelope facility, as well as a facility in Ontario.
