The diversification is pursued in partnership with the Government of Québec. Government's agent Investissement Québec will acquire 37.5% stake in Kruger Specialty Papers.
Canada's pulp and paper company Kruger Inc is set to further increase its presence in new growth markets. In partnership with the Government of Québec, the company announced a multi-hundred-million transaction to diversify two of its paper mills in Québec into specialty paper markets. The new products include flexible packaging papers, label papers and coated papers for digital inkjet web printing.
The new specialty products entity will comprise the assets of the company's Brompton and Wayagamack mills and do business under the name of Kruger Specialty Papers Holding L.P. Kruger Specialty Papers will invest CAD107.5 over the next three years to modify and enable production operations at Brompton and Wayagamack mills to include new products. Production of newsprint and magazine papers will gradually be reduced. By the end of the project the company's Brompton mill will focus exclusively on specialty papers and definitely idle 200,000 tpy in newsprint capacity, according to Kruger.
Kruger and the Government of Québec have formed a partnership by which Investissement Québec will acquire an 37.5% stake worth CAD44.6m in Kruger Specialty Papers and grant loans and a loan guarantee totaling CAD59.8m.