Nexfor to split
June 28, 2004 By Pulp & Paper Canada
Forestry products company Nexfor has received the go-ahead from shareholders to split the enterprise into two separ…
Forestry products company Nexfor has received the go-ahead from shareholders to split the enterprise into two separate publicly traded businesses. One will concentrate on panel products, whereas the other will direct its energies to focus on paper.
While the newly indited Norbord Inc. has benefited from strong demand for its oriented strand board, Fraser Papers Inc. has been losing money during a cyclical downturn. Norbord had nearly $1.1 billion US in sales last year, where its counterpart lost $79 million US with $873 million US in revenue.
Nexfor president and CEO Dominic Gammiero conveyed to shareholders his perception of the company’s evolution, saying that Nexfor has become a “very, very different company,” since his appointment five years ago. Gammiero intends to do more pruning and has concluded the paper company may not have to own the trees responsible for feeding its pulp mills. He also indicated that two of its 17 paper machines may no longer be needed.
The approved proposal will see the translation of five shares of Nexfor into five shares of Norbord Inc. and one share of Fraser Papers Inc.
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