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DAILY NEWS Mar 11, 2014 10:03 PM - 0 comments

Dissolving pulp results "disappointing": Fortress CEO

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2014-03-11

Fortress Paper Ltd. reported a 2013 fourth quarter EBITDA loss of $9.4 million. The company’s dissolving pulp segment generated loss of $10.8 million while the security paper products segment generated of $2.7 million.

Chadwick Wasilenkoff, CEO of Fortress Paper, commented that 2013 was very challenging for Fortress Paper. “Positive developments throughout the year were overshadowed by the disappointing financial results from the dissolving pulp segment. I would like to thank the entire team at Fortress Paper for their perseverance and commitment throughout a difficult year."

Early in the fourth quarter of 2013, the Fortress Specialty Cellulose mill reached a significant milestone for the reduction of the overall cost structure at the mill when the cogeneration facility project was successfully completed and delivering power to the Hydro Quebec grid.

The results for Fortress’ dissolving pulp business reflect a 13% interim duty imposed by China's Ministry of Commerce (MOFCOM) on the import of dissolving pulp into China from the Fortress Specialty Cellulose mill (Thurso), a seven-day maintenance shut-down in October, and a five-day shut-down in early December as a result of a digester issue. The duty imposed by China resulted in a build-up of dissolving pulp inventories and consequent $3.7 million write-down to fair market value.

As a result of the possible 50.9% MOFCOM interim duty imposed on the import of future dissolving pulp from the Fortress Global Cellulose mill into China, a $32.9 million impairment was taken against the mill assets.

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