Pulp and Paper Canada

News
What’s New… (May 01, 2007)


May 1, 2007
By Pulp & Paper Canada

SALE

FRASER GETS GREEN LIGHT ON KATAHDIN ACQUISITION

TORONTO, ON — Fraser Papers has been given the go-ahead by its board of directors to acquire Katahdin, a subsidiary of Brookfield Management. The deal is expected to cost $80 million, subject to an adjustment based on working capital at the time of closing. Fraser will additionally pay distributions to Brookfield Management, depending upon the generation of cash flow from the super-calendered business.

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MERGER

RINGING IN THE NEW DOMTAR

MONTREAL, QC — Domtar is now officially listed on the New York Stock Exchange.

The creation of Domtar Corporation, a merger of Domtar Inc. and the Fine Paper business of Weyerhaeuser took place on March 7, and the stock exchange listing marks a concrete step in the amalgamation.

“This is a period of exciting growth for our company,” said president and CEO Raymond Royer. “I am proud of our association with the New York Stock Exchange as it raises our company’s profile in the capital markets.”

The opening bell on the NYSE sounded at 9:30 a.m. on April 17.

SLA

COALITION FOR FAIR LUMBER IMPORTS APPEALS FOR SLA

WASHINGTON, DC — The Coalition for Fair Lumber Imports is calling on parties involved in the U.S.-Canada Softwood Lumber Agreement to make sure they are in ‘full compliance’ with the agreement. The coalition says this ‘is the key to making the SLA a workable, lasting alternative to litigation.’ The Coalition also took the opportunity to call attention to what it perceives as Canada’s failure to abide by the agreement.

The coalition recently released a document commenting on public statements that suggest the ‘SLA is not durable because it is overly complicated and U.S. parties are needlessly questioning Canadian government compliance with the agreement.’ The document also takes into account allegations that disagreements are in fact due to a ‘supposed’ lack of competitiveness on the part of the U.S. lumber industry.

Coalition chairman Steve Swanson has come out in favour of the agreement, saying, “The SLA is a compromise and we would have much preferred fully open and competitive Canadian timber markets as the solution to the unfair trade problem. But the SLA can and should be an enduring solution if its requirements are observed. The Canadian government presently is not applying export measures as required by the agreement, and provinces are providing forbidden subsidies. It is imperative that these issues be resolved quickly and we support ongoing efforts to resolve them. All that we have ever requested is a level playing field. Open and competitive Canadian timber markets would provide that. It is disappointing to see the competitiveness red herring repeated again.

INVESTMENT

SECTOR WARY OF THIRD AVENUE INVESTMENT PLANS

VANCOUVER, BC — An investment of $1 billion will have even greater payoffs, is the hope of New York investment firm Third Avenue Management LLC.

According to a report by Canwest News Service, the firm has poured $1 billion into the Canadian forest sector, in the anticipation of pulling in substantial revenues from future mill shutdowns and mergers.

Third Avenue owns significant chunks of Catalyst Paper and Abitibi-Consolidated, and is now, according to the report, ‘threatening BC billionaire Jim Pattison’s spot as the major shareholder in lumber giant Canfor Corp.’

‘The issues are too sensitive to discuss at this time,” Canwest reported Third Avenue representative Bridget Smith as saying, referring to a battle within Canfor over a plan supported by Third Avenue to remove that company’s poison pill. However, in its own publications, Third Avenue lays out an investment strategy that includes buying into an entire industrial sector and then waiting for opportunities to shut down capacity and consolidate companies to generate profits.

BEETLE

FUNDING FOR BEETLE GOES SOUTH

MERRITT, BC — A total of $50,000 is being directed to a Mountain Pine Beetle Action Plan.

Noting that the problem is not strictly relegated to the northern part of the province, the Province of British Columbia and the Government of Canada are funding the establishment of a group that will help mitigate the economic impact of the beetle in the southern Interior of BC.

“As part of our Mountain Pine Beetle Action Plan, we’re providing funding and support for economic development strategies designed by communities,” the Honourable Rich Coleman, Minister of Forests and Range said. “This $50,000 is seed money for setting up a Southern Interior Beetle Action Coalition similar to those already at work in the northern regions.”

The funding will help identify beetle-related issues and concerns for communities, regional districts and First Nations in the southern Interior, and will assess the epidemic’s potential social and economic impacts on the region. With the results of these analyses, the southern Interior group will prepare a business plan for further funding consideration.”

We are taking immediate action with our provincial partners to control the spread of the beetle,” Minister of Natural Resources Gary Lunn said. “Our government is also focusing on the economic infrastructure of communities that have been affected by the infestation. We are committed to new initiatives that will help modernize and rebuild areas in the southern Interior and across the province.”

MILLS

BUYERS ON HORIZON FOR CASCADES THUNDER BAY

THUNDER BAY, ON — It might not be such a tough sell, says Andre Nicol, spokesperson for a Thunder Bay group looking to re-open the Cascades paper mill.

According to a recent report by the Chronicle Journal, despite an original group of investors deciding to pull out, a new one has taken its place. The Journal reported Nicol as saying he is “confident a deal can be struck and that his group will take a ‘positive direction’ this month. He would not name the potential buyers but said the first group to come up with the money will be the one.”

The report further confirmed that the Northern Ontario Heritage Fund Corporation provided a total of $96.250 to facilitate the development of a business plan by the City of Thunder Bay, which was in turn used by Thunder Bay Fine Papers to create partnerships.

The province will be providing a $350 million loan guarantee, a $150 million grant and a $140 million Electricity Assistance Program. An additional $150,000 has been invested by local individuals, and the Chronicle Journal further reported that the city of Thunder Bay has contributed an undisclosed amount.

FORESTRY

FPAC APPLAUDS BEETLE FUND

OTTAWA, ON — The Forest Products Association of Canada (FPAC) has given the Government of Canada’s plan to combat the mountain pine beetle two thumbs up.

A $25 million fund to assist with salvaging infested trees, removing pine forests suitable for beetle infestation and breeding, as well as the completion of geographic maps to target the beetle spread threat, is an excellent start, according to FPAC. “The devastating consequences of the pine beetle epidemic serve as excellent examples of just how vulnerable Canada’s environment and economy are to a changed climate,” FPAC president and CEO Avrim Lazar said. “For this reason, as governments focus on implementing climate change measures, it is also important for them to undertake strategies that give adaptation measures greater prominence. We are already living in a changed climate and must not only focus on how to reduce Canada’s impact on the climate but also put far more emphasis on how Canada can adapt to the impact of a changing climate on us.”

Zellcheming* The 102nd Zellcheming Annual General Meeting and Expo will be held from June 25-28 2007 in the Rhein-Main-H
allen in Wiesbaden, Germany. The congress addresses industry executives as well as their supply industries. Technical directors, managing directors, mill managers and production managers, lecturers and representatives of research and development tend to make better use of the congress with regard to their training, for the establishing of new contacts and the exchange of experience and information. During the years, the congress has developed its own, unique character. The Expo’s attractiveness, the technical and scientific conferences as well as the social supporting program make Zellcheming’s General Meeting the largest annual event of its kind in Central Europe. E-mail zellcheming@zellcheming.de or visit www.zellcheming.com for more information.

ENERGY

ABITIBI ENERGIZES WITH CAISSE DE DEPOT

MONTREAL, QC — Abitibi-Consolidated has closed the transaction with the Caisse de dpt et placement du Qubec, creating ACH Limited Partnership. A joint venture for the company’s hydroelectric generation facilities, Abitibi holds a 75% equity interest in the new partnership. On a consolidated basis, the deal has yielded Abitibi a total of $297.5 million.

The partnership includes eight hydroelectric facilities in Ontario. Combined, they represent a capacity of 136.8 MW and a normalized annual generation of roughly 828 GWh.

PAPERCLIPS

IT’S A BIRD, IT’S A PLANE, IT’S A PAPER PTERANODON!

If beauty is in the eye of the beholder, many eyes were able to behold Dr. Robert J. Lang’s new origami undertaking. The physicist-turned-artist graced McGill’s School of Architecture for four days in the month of April to fold a 4.25 metre square of paper donated by Montreal’s Papeterie Saint-Armand, into a life-size model of a pteranodon, a flying reptile.

Lang has studied the art of origami for more than 30 years, and is now recognized as one of the world’s leading masters of the discipline. With more than 400 designs catalogued and diagrammed, Lang has additionally consulted on applications of origami to engineering problems, and is the author or co-author of eight books and many more articles.

The paper used in the project was supplied by Montreal-based La Papeterie St-Armand, a mill established by David Carruthers in 1979, where handmade papers are fabricated. The paper that was converted into a giant reptile was made specifically for this project.


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