Pulp and Paper Canada

News
News (February 01, 2003)


February 1, 2003
By Pulp & Paper Canada

FINANCIAL: CASCADES TO REFINANCEKINGSEY FALLS, QC — Cascades Inc. is planning to undertake a series of transactions to refinance substantially all of its and its subsidiaries’ outstanding credit faci…

FINANCIAL: CASCADES TO REFINANCE

KINGSEY FALLS, QC — Cascades Inc. is planning to undertake a series of transactions to refinance substantially all of its and its subsidiaries’ outstanding credit facilities and credit lines, as well as the credit facilities and credit lines of its joint ventures.

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These transactions include the issuance of $325 million US of newly issued debt securities of the company in a private placement, an offer to exchange up to an additional $125 million US of the same series of newly issued debt securities for the 8-3/8% Senior Notes due 2007 issued by the company’s subsidiary, Cascades Boxboard Group Inc., and the entering into of a new $500 million four-year revolving credit facility.

The private placement is expected to close concurrently with the new revolving credit facility, and the exchange offer is expected to close shortly thereafter. The company expects to complete the refinancing during the first quarter of 2003.

FINANCIAL: SGF TO SELL ITS DOMTAR STAKE

MONTREAL, QC — Quebec government’s investment agency, Socit Gnerale de Financement (SGF), has decided to sell its 16% Domtar stake.

The sale is valued at $618.7 million and proceeds will total $606.7 million after costs. Profit on the original investment will be $180 million.

SGF and Domtar made an agreement with an underwriting syndicate composed of National Back Financial, CIBC World Markets, Merrill Lynch Canada, and five other investment dealers. It will involve a public offering of 18.17 million shares at $16.50 each to be peddled immediately to outside investors. Buyers will simultaneously get a warrant valued at $1 (included in the $16.50 price) to buy a Domtar share during the following year for $17.55.

SGF has held Domtar for 21 years, beginning with a $145.8 million investment in 1981.

Domtar had revenues last year of $4.4 billion, and has 12,500 employees. Along with Cascades Inc., it owns Norampac — the largest producer of containerboard and corrugated board in Canada.

ENVIRONMENT: FINE WILL BENEFIT ENVIRONMENT

PORT ALICE, BC — Western Pulp was fined for violating environmental laws at its pulp mill in Port Alice. The decision was handed by the provincial court in Port Hardy, BC, on January 8.

Crown counsel John Blackman and defence lawyer Edward Chiasson jointly recommended the $80,000 fine. The money will go to the Habitat Conservation Trust Fund for use in North Island bear awareness programs and on projects that enhance fish, wildlife and habitat.

The first offence occurred the Feb. 20, 2000, when an unknown amount of chlorine gas accidentally escaped from rail cars. The court said there were no casualties, no first aid was administered and only the employees in the immediate area needed to be evacuated.

Chiasson blamed employee error for the chlorine escape. He said the company reported the leak to the provincial officials and changes were made to make sure it never happens again. He said employees responsible were disciplined as well.

Judge Brian Saunderson praised the company for being “good corporate citizens, to the point of reporting themselves.”

The company also admitted violating its permit twice that summer, on June 16 and 17, when it used a bypass pipe to send a portion of its effluent into Neroutsis Inlet with less than the amount of treatment required by the mill’s permit.

LEGAL: P&G SETTLES WITH G-P

CINCINNATI, OH — Procter & Gamble, the maker of Charmin bathroom tissue, settled a lawsuit it had filed against rival toilet-paper maker Georgia-Pacific.

P&G accused the company of hiring an employee to gain access to secret aspects of the papermaking process. P&G accused G-P of hiring a former P&G employee to obtain information regarding P&G’s Through-Air-Drying (TAD) papermaking technology and processes, used to make Charmin and bounty paper towels.

G-P spokesman Greg Guest said the lawsuit has been resolved to the satisfaction of both implicated parties. No financial details have been released.

Cincinnati-based P&G has another pending case of the same nature at the Cincinnati Federal District Court. P&G sued Potlach Corp., a lumber and paper company, on similar allegations of hiring away workers to steal trade secrets.

LEGAL: EXECUTIVES DETAINED OVER SMUGGLING

BEIJING, CHINA — Three officials at a major Beijing newspaper were detained on suspicion of tax evasion and smuggling newsprint into China last month, media reports said.

The officials imported the goods through a mainland petrochemical company twice last spring without paying taxes of up to 80%, said a Chinese newspaper report.

According to a spokeswoman for Modern Logistics, the officials, who work for Modern Logistics Co., had imported newsprint under their own names, since the company did not have a license for import and export.

Modern Logistics has been providing printing services and supplying about a dozen mainland newspapers with newsprint since 2001.

IMPORTANT UPDATE ON BC MILLS:

It was brought to our attention that the information in the December 2002 Industry News entry, BC mills law breakers, says Gov’t, was dated. It was based on an environmental non-compliance report from the Government of British Columbia, Ministry of Environment (now Ministry of Water, Land and Air Protection) but we failed to note that it was released in June 2000.

In the interest of fairness, we have tried to contact all the mills involved to give them an opportunity to update the information. These are the responses we received:

“Celgar Pulp Company was on the last non-compliance list for a spill of non-toxic effluent from our treatment system. The surge was attributed to a faulty isolating valve and was subsequently repaired. The Ministry was satisfied that Celgar took all reasonable steps to ratify the problem. Celgar now has the lowest particulate discharge of any Kraft Pulp mill in BC. Their AOX discharge also ranks amongst the lowest in the country.”

Fiona Mackay, Environment Superintendent

Celgar Pulp Company

“Crofton and Powell River effectively eliminated their air pollution infraction issues with the installation of dilute NCG collection systems. Crofton has also rectified its power boiler particulate emissions with the replacement of the precipitator and installation of hog fuel presses.” (Crofton and Powell River were listed for exceeding pollution permit for total reduced sulphur – TRS.)

Graham Kissack, Director, Environment

NorskeCanada

“The owners and employees of the New Skeena and the residents of Northwest BC are working hard to build an innovative and world class organization from the ashes of the old.” (Skeena Cellulose, under the old ownership, was cited for effluent discharges above permit levels.)

Scott Randolph, Director of Corporate Communications

New Skeena Forest Products Inc.

“The root cause of the failure (to comply) was attributed to excessive scaling in the lime Kiln scrubber. Eurocan undertook modifications to the scrubber system to provide easier access for maintenance activities. It relocated instrumentation around the scrubber system to provide more reliable process information and implemented a formalized routine maintenance program to prevent a situation of excessive scaling. Several upgrades to pumps and shower nozzles were undertaken to improve the overall reliability of the system. This system has not exceeded its particulate discharge limit since.”

Michael Martins, Environmental Coordinator

Eurocan Pulp and Paper

PAPERCLIPS

WASPS AND PAPERMAKING

While there are conflicting attributions for the idea of making paper from ground wood fibre, there is no doubt that papermakers around the world have wasps to thank for the papermaking process that is used in today’s mills.

Some people credit Rn de Raumur (1683-1757), a French scientist and author of five volumes on the natural history of insects, for the idea. While watching wasps build their nests, he realized that they were pulverizing wood through chewing and that the resultant pulp created a substance
similar to paper. However, Ramur never applied this knowledge on a practical level.

It was Charles Fenerty of Nova Scotia (1821-1892) who was the first to commercialize the application by using spruce wood pulp to create paper. Thus, in the second quarter of the nineteenth century, at a time when paper was predominantly made with rags, this Canadian produced the first usable newsprint made from ground wood fibre.

Source: The Chemical Institute of Canada (www.cheminst.ca) and Pennsylvania State University (www.matse.psu.edu).


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