Crofton mill owner Catalyst Paper announced it is closing its recycle paper mill in Arizona and subsidiary the Apache Railway Company because of supply and market pressures.

Catalyst CEO Kevin Clarke said the decision to close the Snowflake mill is an "extraordinarily difficult one", after the company tried putting in place a number of measures to address market challenges and improve the financial operations there. Those included switching to higher-value specialty paper from newsprint only.

The company said the demand for newsprint has dropped 10 per cent every year since it acquired the paper mill in 2008.

Snowflake is set to close at the end of September, 2012.

Catalyst got approval by its creditors in June to continue financial restructuring under the Companies' Creditors Arrangement Act (CCAA). 

The company employs some 1,700 people at pulp and paper mills in Crofton, Port Alberni and Powell River. 

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