Tembec to sell Skookumchuck mill to Paper Excellence
Paper Excellence is buying its sixth pulp mill in Canada. The Sinar Mas affiliate has signed a purchase agreement for Tembec's Skookumchuck mill in British Columbia.
Tembec announced today that it has reached an agreement to sell its NBSK pulp mill and related assets and liabilities located in Skookumchuck, British Columbia to Sinar Mas affiliate Paper Excellence Canada Holdings Corporation for a purchase price of CAD89 million, which includes working capital.
"This transaction supports the continuing transformation of the Company and the reshaping of its business portfolio," said Tembec President and CEO James Lopez in a statement.
The Skookumchuck mill was Tembac's last NBSK pulp mill. The remaining two mills Matane and Temiscaming in Québec produce high-yield hardwood pulp with a combined capacity of 565,000 tpy. The Chetwynd facility, the third high-yield pulp mill in Tembec's portfolio, was indefinitely idled in September 2012 due to market related reasons.
Tembec acquired the Skookumchuck pulp mill in 1999 as part of the acquisition of Crestbrook Forest Industries Ltd. The mill was started up in 1968. Currently, it has a production capacity of 255,000 tpy of NBSK pulp that are shipped to North American and Asian customers primarily for tissue applications. 290 people are employed in Skookumchuck. Closing of the transaction is expected to occur in the second quarter of 2013 and remains subject to certain conditions and regulatory approvals.
According to the Richmond Chamber of Commerce, Paper Excellence Canada Holdings Corporation is the third largest pulp and paper company in Canada, has over 1.3 million tpy of pulp and 210,000 tpy of paper production capacity and employs 1,100 people.
Paper Excellence Canada Holdings already owns five pulp mills in Canada. Its latest acquisition was the Northern Pulp Nova Scotia mill in Abercrombie Point in 2011. In April 2010, Paper Excellence took over the idled pulp mill in Mackenzie in British Columbia. This was followed in July 2010 by the acquisition of Howe Sound Pulp and Paper Mill from Canfor Corporation. In March 2011, Domtar Corporation reported that Paper Excellence is buying the disused Prince Albert pulp mill in Saskatchewan to convert it to a plant for dissolving pulp. Paper Excellence has also been operating the Meadow Lake pulp mill in Saskatchewan since 2007, which it had taken over from the insolvent Meadow Lake Pulp Limited Partnership.
In 2010, Paper Excellence B.V., the European affiliate of the company, already acquired French pulp mills Tarascon and St. Gaudens from Tembec.
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