Moscow. Jul 10, 2009. /Lesprom Network/. St. Marys Paper in Sault Ste. Marie, Ontario has placed another 40 employees on indefinite layoff, ForestTalk reports.

The company has laid off about 100 employees in the past nine weeks, including about 80 workers represented by the Communications, Energy and Paperworkers Union of Canada, due to weakening paper demand.

Two of the mill's three paper machines were shut down in early May, and 60 CEP members were pink-slipped, as the company launched what it felt was "a short-term measure," of maybe a month's duration, to get inventory in line with demand.

St. Marys Paper produces specialty paper and will not be able to benefit from the federal black-liquor aid package. The company is pinning its energy and environmental future on a cogeneration plant. St. Marys Renewal Energy Corp., the energy subsidiary of St. Marys Paper, has made a submission to the Ontario Power Authority for a 10-year 35 megawatt purchase agreement.