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News (January 01, 2002)


January 1, 2002
By Pulp & Paper Canada

TRADE WARLumber Dispute May Be Soon OverOTTAWA, ON — The softwood lumber dispute between Canada and the United States might be settled early in 2002. In an offer made to Ottawa to solve the current t…

TRADE WAR

Lumber Dispute May Be Soon Over

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OTTAWA, ON — The softwood lumber dispute between Canada and the United States might be settled early in 2002. In an offer made to Ottawa to solve the current trade dispute, which has seen duties of about 32% imposed on Canadian softwood (amounting to $10-billion a year), the US Commerce Department said it could suspend the measures and hold off any future trade actions once it is convinced that Canadian reforms are in place. The pledge from the US is seen as pivotal to ending a long-running dispute between the world’s two largest trading partners. Americans have been complaining that Canadian lumber companies have an unfair advantage because the provinces charge artificially low stumpage fees to cut timber on crown land. The new offer from the Americans follows pledges by British Columbia, Quebec, Ontario and Alberta to reform provincial timber systems, including opening up portions of their provincially controlled timber to public auction. Such a system is in place in the US.

FOR SALE

Competition Bureau Appoints Agent to Sell A-C Mill

MONTREAL, QC — The Canadian Competition Bureau, the federal agency overseeing mergers and acquisitions, has hired an agent to find a buyer for Abitibi-Consolidated’s Port-Alfred newsprint mill. In response Abitibi said, it would “focus on protecting the interests of its shareholders by closely monitoring the process.”

This latest move follows the company’s unsuccessful attempt in the last year to find a buyer for the mill, which is in Ville de la Baie, QC. One of the chief conditions that the federal agency set out for agreeing to Abitibi’s takeover of Donohue in February 2000 was that it divest 400 000 tonnes of annual newsprint capacity, equating to the capacity at Port-Alfred. The agency said such a move would better balance Eastern Canada’s newsprint market. The mill employs 600 people and has four paper machines.

HONOURS

DOMTAR Joins Select Group

MONTREAL, QC — For the third consecutive year, Domtar Inc. has been included in the Dow Jones Sustainability World Indexes, joining the select ranks of four other paper companies in the world. The SAM Research Group audits the index, which tracks the performance of sustainability-driven companies worldwide.

Raymond Royer, Domtar president and chief executive officer, said that his company’s performance testify to a number of factors, including dedicated employees, environmental awareness and customer focus. “By being customer focused, we have inevitably made better, more environmentally sound products, offered superior returns to our shareholders and provided greater economic and social stability to our employees and their communities.”

As well, the company garnered a Nicholson Award for its 2000 annual report, which is given out by the National Association of Investors Corporation, a nonprofit organization of investment clubs and private investors. Domtar garnered top honours in the category of a company that has headquarters outside the US. The company’s annual report was noted for its readability, balanced presentation of financial reporting and content, quality printing and graphic design.

RE-OPENING

$465-Million Investment Gives Quebec Mill New Life

CHANDLER, QC — The Gaspesia mill in Chandler, QC, has been resurrected, after a consortium has committed to invest in the $465-million project to convert the mill’s production to high-gloss coated paper from newsprint. The mill’s previous owner, Abitibi-Consolidated Inc., shuttered the mill in June 1999.

The consortium includes Tembec Inc.; SGF-Rexfor, the forestry investment arm of the provincial government; and Fonds de solidarit FTQ, the union’s investment fund.

Tembec is investing $35-million to acquire a 25% stake in the new facility and SGF-Rexfor an equal interest. The union, the FTQ, which has invested $70-million, will hold the major share, 50%. “By turning Gaspesia into a world-class state-of-the-art mill, we wanted to ensure its long-term survival,” said Henri Mass, FTQ’s president.

Tembec is leading the modernization effort with technical assistance and marketing. Frank A. Dottori, Tembec president and chief executive officer, said the company foresees good coming out of this investment: “Our participation in the Chandler mill’s re-opening will not only enable us to pursue our growth strategy, but will give us an edge in this highly competitive market,” he pointed out. “Tembec has become what it is today because of the unrelenting hard work of everyone who has worked to build it. Our machines are no different from [that of] our competitors.”

With the addition of the mill’s estimated capacity of 200 000 tonnes/year (t/y), Tembec will become the sixth-largest paper producer in North America, marketing more than 1.3-million t/y.

Construction is schedule to begin in the spring of 2002, and the mill will come online in early 2004. It will employ 260 people in the Gasp region of northern Quebec.

– BRIEFLY

Domtar Inc. has received ISO 14001 certification for its forest-management practices in Matagami, Lebel-sur-Quvillon, Val-d’Or and Grand Remous in Quebec.

Montreal-based CAE Inc. is selling its forestry business for an undetermined amount, and has retained brokerage firm CIBC world markets to secure a buyer. The company wants to build up its core business: flight simulators, said Derek Burney, CAE president and chief executive officer. “The sale of the forestry business was necessary, given the immediate opportunity to accelerate our entry into aviation training.”

Norampac, Trenton, ON, has taken delivery of an 80-tonne, 40-foot-long boiler, which forms the heart of the world’s first commercial steam reformer. The huge boiler is the key component of a $30-million environmental project at Norampac’s Trenton division to convert pulping liquor into clean-burning hydrogen. It is expected to come online in 2003.


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