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Thurso investment “a disaster” says Fortress CEO


March 18, 2015
By Pulp & Paper Canada

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In a recent Financial Post story about Fortress Paper and its CEO Chad Wasilenkoff, the purchase of the pulp mill at Thurso, Que., is singled out as a bad decision.

In a recent Financial Post story about Fortress Paper and its CEO Chad Wasilenkoff, the purchase of the pulp mill at Thurso, Que., is singled out as a bad decision.

“We have had a lot of successes within Fortress, and one really bad investment,” Wasilenkoff told the newspaper. “Thurso has been a disaster.”

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The article notes that Fortress Paper stock has lost 97% of its value, dropping from a high of $62 several years ago.

“Five years ago Mr. Wasilenkoff, a self-styled “contrarian” investor, convinced investors to buy the mill for $1.2 million and pour in $240 million to convert it from production of kraft paper to dissolving pulp, the raw material of rayon fibre,” reads the Financial Post article.

“Then everything went wrong. Other mills converted to dissolving pulp. The price of dissolving pulp crashed to $800 a tonne. China slapped a 13% duty on imports from the Thurso mill.”

And the mill conversion to dissolving pulp was $100 million over budget, Wasilenkoff told the Financial Post. “It has been the most difficult thing I have had to manage in my life,” he said. “I hired the wrong people to do the conversion. My management team gave me wrong financial forecasts. We kept running out of money.”

Fortress Paper has had some success in the paper business. The Financial Post notes the turnaround at Fortress’ Landqart mill in Switzerland, and the purchase and subsequent sale of a wallpaper mill in Dresden, Germany. Fortress also bought a company from the Bank of Canada that makes security threads for paper currency, for $750,000, and sold it last year for $17.5 million, the article states.

Fortress Specialty Cellulose, the Thurso business, now has new management and is producing electricity for sale as well as dissolving pulp. “We are on the verge of profitability,” Wasilenkoff says.

Read the complete Financial Post article here.