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INDUSTRY NEWS FLUFF PULP: PI SELLS SHARES OF FRENCH PULP MILL

MONTREAL, QC — Paperboard Industries International Inc. has sold its 50% stake in a French-based pulp mill to its partner Tembec Inc. for $35 million plus an additional $10 million — the amount link…

MONTREAL, QC — Paperboard Industries International Inc. has sold its 50% stake in a French-based pulp mill to its partner Tembec Inc. for $35 million plus an additional $10 million — the amount linked to the mill’s profitability over the next three years. The mill’s book value is $28 million, so PI will make a profit on the deal, the company said in a release. The Tartas SA mill, located in southwestern France about 125 kilometres from Bordeaux, produces 165 000 tonnes per year of fluff and specialty cellulose pulps. PI said it is selling the mill to focus on the manufacture of boxboard and to cut its long-term debt, which stood at $21 million at the end of June.

It was jointly acquired by PI and Tembec in 1994 for $1 because there were no buyers, said Stphane Milot, director of investor relations at Cascades Inc., which has a 71% stake in PI. Tembec said that the acquisition of the Tartas mill “further strengthens its position as a world leader in the supply of specialty cellulose products.” Tembec now operates three specialty mills, with a combined capacity of 440 000 t/y. Globally, its output of market pulp is over 1.2 Mt.