Why closing Temiscaming can be rational for RYAM
The shutdown threatens 425 jobs, but it also follows a divestment strategy that began well before the latest U.S. tariffs.
Rayonier Advanced Materials, or RYAM, will temporarily suspend operations at its Temiscaming mill on September 15. The company attributes the decision to U.S. tariffs. About 425 jobs are now at risk, following 275 positions lost when high-purity cellulose production was suspended in 2024.
Source: TVA Abitibi-Temiscamingue, August 26, 2026
From RYAM's Jacksonville headquarters, however, the decision is financially rational. That does not necessarily mean the mill has no value. It may mean it no longer has enough value for its current owner.
The strategy predates the tariffs
In 2021, RYAM sold its lumber and newsprint assets to GreenFirst for approximately US$214 million while retaining Temiscaming and entering into a twenty-year residual-fibre supply agreement.
Source: RYAM, GreenFirst transaction
In October 2023, RYAM hired Houlihan Lokey — a global U.S. investment bank ranked first worldwide in 2025 by number of M&A transactions according to LSEG — to explore a sale of the paperboard and high-yield pulp businesses at Temiscaming. Paying down debt and reducing leverage were already stated objectives.
Source: RYAM, sale mandate Source: LSEG ranking published by Houlihan Lokey
In 2025, AFRY was evaluating strategic and optimization options for all site assets. RYAM told investors that it intended to restore profitability and position the businesses for divestiture in 2026, ultimately becoming a more focused cellulose-specialties and biomaterials company.
Source: RYAM third-quarter 2025 presentation
In April 2026, the company opened a formal strategic-alternatives review after receiving unsolicited indications of interest. A partial or full sale, strategic investment, merger or other business combination were all identified as possible outcomes.
The analytical conclusion is therefore narrower than saying tariffs caused the entire strategy: the tariffs appear to have accelerated a divestment direction that was already several years old.
Why a shutdown can make sense for RYAM
In late 2025, RYAM guided to negative US$14 million of EBITDA at Temiscaming versus roughly US$30 million historically. In the second quarter of 2026, paperboard and high-yield pulp produced US$75 million of sales and a US$27 million operating loss. That loss included a US$13 million non-cash impairment, as well as the effects of weaker prices, maintenance and market-related downtime.
The company also identified new U.S. paperboard capacity, continued high-yield pulp oversupply in Asia and weaker global demand.
Source: RYAM second-quarter 2026 results
In 2025, RYAM's Canadian exports to the United States generated US$133 million of product sales. Canada now confirms U.S. tariffs of up to 50 per cent on C$27.6 billion of Canadian goods, with pulp and paper among the affected sectors.
Source: RYAM 2025 annual report Source: Department of Finance Canada, August 25, 2026
For a leveraged company seeking a simpler portfolio, continuing to operate a loss-making mill into a more expensive U.S. market may be irrational. A temporary shutdown can slow losses, preserve liquidity and keep the asset available during a strategic process.
That is an interpretation of the public sequence, not evidence of a secret transaction or an agreed fire-sale price.
The site is more than a loss-making production line
Temiscaming has declared annual capacity of 180,000 metric tonnes of paperboard and 290,000 metric tonnes of high-yield pulp. It also includes industrial and energy infrastructure, a specialized workforce and a residual-fibre agreement running to 2041.
RYAM estimated the remaining fibre purchase obligations at approximately US$203 million, or about US$13 million annually through 2041. The agreement can be valuable supply security for a buyer that uses the fibre, but a burden for an idled site.
Source: RYAM 2025 annual report
Energy may be the most interesting component. In 2012, Tembec launched a C$190 million cogeneration project at Temiscaming. The financing included C$105 million of new debt — including a C$75 million Investissement Quebec loan — and C$85 million from operating cash flow.
Hydro-Quebec signed a 25-year contract for up to 50 MW at an initial price of 10.6 cents per kWh as of January 1, 2012, indexed annually to Canadian inflation.
Source: Hydro-Quebec Source: Tembec financing disclosure
As an order of magnitude only, mechanically indexing the initial price suggests a gross theoretical ceiling near C$65 million per year in 2026 dollars if 50 MW were delivered continuously.
That is not verified revenue or profit. It excludes downtime, internal consumption, fuel, operating costs, contractual restrictions, possible amendments and actual delivered volumes. It does show why the power contract must be examined as an industrial asset in its own right.
Temiscaming would not suddenly become a cogeneration facility. Cogeneration is already part of the site's economic system. The question is whether it can support a different industrial configuration after the high-purity cellulose shutdown.
Canadian ownership would not remove the tariff
Changing the owner does not change the customs origin of the product. Paperboard manufactured at Temiscaming would remain Canadian when it enters the United States, even if the mill were owned by a Canadian company, Investissement Quebec or a Quebec consortium.
A buyer would therefore need to change part of the model: secure more Canadian or allied customers, replace some U.S.-bound volumes, obtain anchor-customer commitments, value power production correctly, reduce fixed and logistics costs, and negotiate the transfer of contracts, permits and lender-encumbered assets.
Canadian counter-tariffs may improve the relative position of some domestically manufactured pulp and paper products. A possible import-substitution market is not an order, however. The commercial case still requires evidence of customers, absorbable volumes and prices.
What a credible acquisition would require
A credible structure would likely need one accountable industrial operator, one lead investor bearing meaningful control risk, two to four financial partners, anchor customers, and potentially a separate structure for the energy assets. Any public participation should be conditional, capped and protected.
Investissement Quebec has a direct precedent at the site through its C$75 million cogeneration loan. That does not establish current interest in buying the mill. It demonstrates familiarity with the asset class and the financing mechanisms involved.
No public evidence currently establishes that Investissement Quebec, CDPQ, the Quebec government or a Canadian industrial company is negotiating an acquisition. RYAM does have a formal strategic process and has said interested parties are participating. A transaction is therefore plausible; its buyer, price and conditions remain unknown.
The first decision is not to buy
Quebec should not yet decide whether to buy or rescue Temiscaming. It should decide whether to determine what Temiscaming is actually worth.
Independent diligence would need to establish the exact asset perimeter, ownership and condition of the energy infrastructure, transferability and net economics of the Hydro-Quebec agreement, restart capital, environmental obligations, fibre-contract terms, lender liens, customer retention, replacement markets, working capital and workforce continuity.
The reasonable next step is not a large public-capital commitment. It is rapid access to the information needed to determine whether a qualified operator can build a financeable commercial plan.
The longer the shutdown lasts, the greater the risk that customers switch suppliers, workers leave and equipment loses value. Industrial value can disappear before a public decision is made.
The real question
Closing Temiscaming can be rational for RYAM. The company wants to reduce debt, exit paperboard and high-yield pulp, focus capital on specialized cellulose and avoid producing at a loss in a deteriorating trade environment.
RYAM's financial logic is not necessarily Quebec's territorial logic.
An industrial complex can be non-core to its owner and still matter to its region. It may be loss-making inside a global portfolio while holding value for a different customer base, capital structure and energy strategy.
That does not prove Temiscaming should be acquired. It shows why RYAM's rational decision should not be confused with proof that the asset is worthless.
The question is no longer only why RYAM is closing. It is whether Temiscaming could be worth more to another owner.
Quebec2035 analysis as of August 27, 2026. RYAM financial figures are in U.S. dollars where indicated. The power-contract calculation is a gross order of magnitude, not verified revenue. No specific buyer or government intervention is established by the public sources reviewed.