High natural gas prices and challenging market conditions have forced a Nova Scotia wallboard company to shutter for a month.

Cape Breton wallboard manufacturer Federal Gypsum Co., which employs about 55 people, is shutting down its operations in Point Tupper, NS. A skeleton crew of three to five people will remain employed to handle shipping. Federal Gypsum, which began wallboard production in 2006 after taking over the former U.S. Gypsum plant in 2004, has been impacted not only by high fuel prices but also a slowdown in the U.S. housing industry, the company said.

“Natural gas is our single biggest cost of production and that’s gone up 50% in the last three months and it’s double what it was last September,” said company vice president Michael Simpson. “It’s just impossible to pass the added cost on to our customers because of the competitive nature of the wallboard market. It just puts the squeeze on the manufacturer. We’re hoping that either market conditions change or fuel gets cheaper and we’ll open back up in a month.”

Earlier this year the Nova Scotia Supreme Court approved a restructuring plan for the company, which was placed under bankruptcy protection in September 2007. Federal Gypsum recently added a second shift at the facility. Simpson said it was disappointing to shut down the plant after restructuring the finances, but he said he wished the company had better forecasted fuel prices.

Federal Gypsum’s full workforce won’t be recalled “until it makes sense to operate again,” Simpson told the Chronicle-Herald in Nova Scotia. “We’re on a day-to-day, week-to-week, month-to-month basis right now on decisions.”

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