Shareholders’ Letter, continued
Future Outlook
In this challenging environment, we expect that, within a few years, the majority of our annual revenues will be in coated and specialty grades. At the same time, we expect to reduce our debt through asset sales and to improve operating margins through continued cost reductions. We expect to be able to achieve better margins even if the Canadian dollar and energy costs remain at current levels.
We also expect to improve the profitability of our newsprint business. Operating rates in North America remain high, and we believe our asset conversions will reflect projected consumption trends. We will invest to maintain the cost competitiveness and quality levels at our core newsprint mills while our coated and specialty business will continue to grow as we capitalize on our unique manufacturing platforms and market growth opportunities. Finally, although our pulp and lumber businesses are not growth segments, they provide operational and cost benefits to our newsprint and coated operations.
Other Milestones
In conjunction with our long history of working with environmental and conservation organizations, we entered into a non-binding Memorandum of Understanding, involving the Natural Resources Defense Council and the Dogwood Alliance, to identify and better protect significant forest areas of the Cumberland Plateau in Tennessee. This enhances our forestry practices and includes environmental, economic and social considerations.