Kruger to diversify its Québec paper mills in into specialty niches
11 September 2017
Kruger Inc. announces a $377.6 million transaction to diversify operations at its Brompton and Wayagamack Mills into specialty niches, such as flexible food packaging, labelling and digital printing. This major project, undertaken in partnership with the Government of Québec, will help to maintain more than 500 jobs in the Mauricie and Estrie regions.
Kruger and the Government of Quebec have formed a partnership by which Investissement Quebec, acting as the government's agent, will grant loans and a loan guarantee totaling $59.8 million and acquire an equity participation of 37.5%, or $44.6 million, in the new entity Kruger Specialty Papers Holding L.P.
The new entity comprises the assets of the Brompton and Wayagamack Mills, as well as the Biomass Cogeneration Plant adjacent to the Brompton Mill.
To carry out this diversification project, Kruger Specialty Papers Holding L.P. will invest $107.5 million over the next three years to enable the Brompton and Wayagamack Mills to gradually reduce the production of some publication paper products that are in decline, such as newsprint and magazine paper, while accessing new markets that are on the rise around the world.
The project's other significant benefits include an additional 100,000 metric tonnes of wood chips procured annually, which will have a direct positive impact on Quebec's sawmill sector.
Kruger Inc. is a major producer of publication papers, tissue products, containerboard and packaging made from recycled fibres, renewable energy, cellulosic biomaterials, and wines and spirits.