Pulp and Paper Canada

News
Catalyst Paper to purchase two U.S. paper mills


November 4, 2014
By Pulp & Paper Canada

Catalyst Paper Corp. is planning to purchase two coated paper mills in the U.S. – the Biron paper mill in Wisconsin and the Rumford pulp and paper mill in Maine.

Catalyst Paper Corp. is planning to purchase two coated paper mills in the U.S. – the Biron paper mill in Wisconsin and the Rumford pulp and paper mill in Maine.

Catalyst has entered into an asset purchase agreement with NewPage Corporation, NewPage Wisconsin System Inc. and Rumford Paper Company to purchase the paper mills for US$74 million, but completion of the transaction is subject to the completion of the previously announced acquisition by Verso Paper Corp. of NewPage Holdings Inc.

“With this transaction, Catalyst will be better able to serve new and existing customers through operational synergies and a more diversified and higher value suite of products,” said Joe Nemeth, president and CEO of Catalyst.

“Our acquisition of these U.S. pulp and paper mills, once complete, will support our efforts to improve our balance sheet and enhance the company’s long-term competitiveness,” he added.

If the transaction is completed, the addition of the paper mills is expected to increase Catalyst’s production capacity by approximately 65% or 995,000 tonnes per year. The Biron mill has 355,000 tonnes of capacity for lightweight coated and ultra-lightweight coated paper. The Rumford mill has 510,000 tonnes of paper capacity for coated specialty, coated freesheet and coated groundwood paper, and 130,000 tonnes of Kraft market pulp capacity to produce both hardwood and softwood pulp.

The company expects to gain efficiencies as overhead costs will be distributed over a larger production base, and gain access to new markets and business opportunities.

Catalyst Paper owns three pulp and paper mills in British Columbia.