TROIS-RIVIÈRES, QC -- The Québec government and Kruger, Inc. have formed a partnership to re-launch the Wayagamack mill, sold by Abitibi-Consolidated to Kruger in the spring. In addition, the Québec government -- through SGF Rexfor, an affiliate of the Société générale de financement (SGF) -- and Kruger Inc. will be partners in a significant modernization project that will generate an investment of over $300 million and save 475 jobs in the Mauricie region. Investissement Québec is participating in this project through a reimbursable financial contribution in the form of an interest-free loan of some $30 million.
The new company, Kruger Wayagamack Inc., will be 51% owned by Kruger Inc. and 49% by SGF Rexfor. The modernization program will transform this mill into an industrial complex with state-of-the-art technology, producing lightweight coated paper destined for the North American market.
Louis Sabourin, the vice-president of manufacturing at Kruger, is the Wayagamack mill's new general manager; Martin Gélinas, is the new manager of human resources.
Kruger has also invested $78 million in its Bromptonville mill with the participation of the Québec government and a $7.5 million loan from Investissement Québec. The goal of the project is to improve the quality of paper while reducing production costs.
ACQUISITIONS: TEMBEC ACQUIRES ST. FRANCISVILLE MILL
TEMISCAMING, QC -- Tembec Inc. announced that it has entered into an agreement to acquire a pulp and paper mill located in St. Francisville, LA, from Crown Paper Co. for approximately US$185 million. The St. Francisville mill is a fully-integrated pulp and paper facility with an annual production capacity of 310 000 short tons of coated groundwood papers and 118 000 short tons of specialty papers.
DOUBLE TRANSACTION: UPM-KYMMENE ACQUIRES HAINDL
HELSINKI, FINLAND -- UPM-Kymmene Corporation has agreed to acquire all of the shares of the German paper producer G. Haindl'sche Papierfabriken KgaA ("Haindl") for a total consideration of EUR 3.64 billion. The four mills acquired are located in Augsburg, Schongau and Schwedt in Germany and Steyrermühl in Austria. In connection with this transaction, UPM-Kymmene has reached a separate back-to-back agreement to sell two of Haindl's paper mills: Walsum and Parenco, to the Norwegian paper producer Norske Skog AS for EUR 1.1 billion.
SALE: QUEBECOR SELLS A-C STOCKS
MONTREAL, QC -- In a direct move to ease its debt after taking over Groupe Vidéotron Ltée., Quebecor announced the sale of its stock in Abitibi-Consolidated Inc. for about $603 million in a two-step transaction with TD Securities. Quebecor had been the single largest Abitibi stockholder and had wanted to sell the stock at a higher price but the recent downturn in the US economy had a negative impact on the stockmarket.
GLOBAL ALLIANCE: EUROPEAN ASSOCIATION JOINING THE PPPC
MONTREAL, QC -- The European Pulp Industry Sector (EPIS), the industry association based in Stockholm, Sweden, and representing European market pulp producers, as well as suppliers in Africa and Latin America that ship to Europe, announced it has joined the Pulp and Paper Products Council (PPPC). The PPPC is comprised of several product associations, including the Market Pulp Association (MPA) which represents market pulp producers with operations in North America.