Posts Tagged ‘Fortress Specialty Cellulose Inc’

Globe and Mail: “Quebec Mill Sees New Life In Rayon Market”

Posted: Friday, August 6th, 2010
fortress accumul 788601gm a 300x237 Globe and Mail: “Quebec Mill Sees New Life In Rayon Market”

The first shipment of industrial equipment, some of which is seen here being taken along a road in Finland, is scheduled to arrive in Thurso, in western Quebec. SOURCE: The Globe And Mail

For the town of Thurso, Que., a shot at economic renewal is literally arriving on massive barges in the Ottawa River.

Next month, the first shipment of bulky industrial equipment from Finland is scheduled to arrive in Thurso, in western Quebec. It will be used to transform the town’s hardwood pulp mill into a facility that makes a key ingredient used in the manufacture of rayon, which is seeing big spikes in demand in Asia and elsewhere.

“We’re looking forward to seeing those barges arrive,” said Thurso Mayor Maurice Boivin.

Vancouver-based Fortress Paper Inc. (FTP-T24.880.532.18%) bought the three digesters and other specialized processing equipment from Finnish company Stora Enso Oyi Cellulose Inc. as part of its bold strategy to convert the Thurso mill from pulp used to make paper – a declining market – to dissolving pulp used to manufacture rayon, a product with a bright future.

The man behind the strategy is Fortress chairman and chief executive officer Chadwick Wasilenkoff, a 38-year-old contrarian investor who seeks out opportunities in overlooked or depressed sectors, like the forest products industry.

“There isn’t enough dissolving pulp to feed the market demand for rayon,” Mr. Wasilenkoff said in an interview.

Rayon is a substitute for cotton (it has similar characteristics but is more breathable and absorbent) and is well-positioned because of the shrinking global supply of cotton as growers switch to less-expensive crops, he said.

“Everything just aligned” to make the conversion of Thurso possible, he said.

Fortress, which also makes banknotes and security papers as well as wallpaper, paid $1.2-million to financially beleaguered Fraser Papers Inc. for the mothballed Thurso mill. It is up and running again, producing hardwood pulp until the conversion to dissolving pulp is completed in about a year.

Fortress is investing $153-million in the transformation of the mill, including the building of a co-generation plant. Investissement Québec is providing a $102.4-million loan, and there is another $25-million or so in federal credits and other financial incentives under the green infrastructure program.

Mr. Wasilenkoff said he just returned from China, where he was overwhelmed by the demand for dissolving pulp from rayon producers.

The Thurso mill, which employs 300 people, is expected to produce 200,000 tonnes a year of dissolving pulp and he anticipates very tidy margins, given that the spot price for the commodity is in the $1,650-a-tonne range and total cost for production and delivery should come in at about $600.

“I like sectors that are out of favour – that are older, more mature – so I can get these kinds of opportunities,” says Mr. Wasilenkoff. In 2006, he bought Swiss-based Landqart AG, a venerable security-paper firm that is the exclusive maker of the Swiss franc and also provides euros to 10 European Union member states.

At the same time, he had been on the alert for a pulp mill in the financially strapped forestry industry, looking for something he could buy cheaply and then convert to take advantage of the booming rayon market.

A bargain-hunter, he said he bought the 12-year-old Finnish equipment for $3.8-million.

BY: Bertrand Marotte for The Globe And Mail. Tuesday, July 27, 2010.

SOURCE:
Globe And Mail: “Quebec Mill Sees New Life In Rayon Market”

Fortress Paper Announces Equipment Purchase For Its Thurso Mill

Posted: Monday, June 7th, 2010

VANCOUVER, British Columbia, June 7, 2010 – Fortress Paper Ltd. (“Fortress Paper” or the “Corporation”) announces the signing of a purchase agreement by its wholly owned subsidiary, Fortress Specialty Cellulose Ltd. (“Fortress Specialty”) with Stora Enso Oyi Cellulose Inc. to acquire digesters, specialized process equipment and other ancillary equipment to be used in the conversion of its Thurso mill to produce dissolving pulp.

The agreement provides for a purchase price of Euro 3 Million (CAD $3.8Million) and includes the purchase and delivery of a complete displacement cooking plant consisting of 3 batch digesters, liquor accumulators and various associated specialty process equipment and piping.

Chad Wasilenkoff Chief Executive Officer of Fortress Paper, commented: “After spending a considerable amount of time assessing and evaluating the equipment, we are very pleased to be able to secure this equipment. This equipment has operated for only 12 years and we are confident of its quality and performance, which should result in a material reduction in our overall capital investment requirements for the conversion to dissolving pulp. We also believe that by acquiring almost an entire batch cooking system, we reduce the process risk for this transformation. At this time it is still too early to determine the impact this new equipment will have on the completion date.”

About Fortress Paper

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress Paper operates three mills, the Landqart Mill located in Switzerland, the Dresden Mill located in Germany and the Fortress Specialty Cellulose Mill located in Quebec, Canada. Fortress Paper’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. Fortress Paper’s pulp business will include NBHK with the re-start of the Fortress Specialty Cellulose Mill with plans to convert this capacity into dissolving pulp production along with the construction of a biomass based cogeneration plant.

Fortress Paper Appoints Key Dissolving Pulp Managers for the Conversion of its Thurso Mill

Posted: Thursday, June 3rd, 2010

VANCOUVER, BRITISH COLUMBIA–(Marketwire – June 3, 2010) – Fortress Paper Ltd. (TSX:FTP) (“Fortress Paper” or the “Corporation”) announces the following appointments at its wholly-owned subsidiary, Fortress Specialty Cellulose Inc. (“Fortress Specialty”): Peter Vinall as President and Chief Executive Officer, Vincent Byrne as Vice President, Technical Development and Donald Deer as Projects Leader. In addition, Fortress Specialty has added Pierre Monahan to its Board of Directors.

In announcing the appointments, Chad Wasilenkoff, CEO of Fortress Paper commented: “We are very pleased to have someone of Peter Vinall’s extensive experience and track record joining our team. His appointment brings a wealth of experience in running some of the largest dissolving pulp mills in the world and he has a talent for building strong teams and leading business transformations. With Vince Byrne, Donald Deer, Marco Veilleux and Pierre Monahan, we will have an experienced team in place to implement our business plan at the Fortress Specialty Cellulose Mill.”

Peter Vinall commented: “Having recently relocated back to Canada, I am excited to now join the Fortress team and lead the conversion of the Fortress Specialty Cellulose Mill into a high quality specialty cellulose mill. The Mill has good access to fibre supply and a reputation for high quality NBHK production which will continue with the restart which is underway. Our aim is to leverage these strengths and transform the asset base with extensive technological upgrades and a state of the art cogeneration facility with the goal of becoming a low cost producer and industry leader in the specialty cellulose sector.”

Mr. Vinall has approximately 30 years of experience in the pulp and paper industry and was the former President of Sateri International Pulp Group, a global leader in the specialty cellulose business. Prior to joining Fortress Specialty, Mr. Vinall held the position of President and Chief Executive Officer of AV Group where he led the conversion of an NBHK pulp mill to produce dissolving pulp. Mr. Vinall obtained an MBA from Tulane University, New Orleans, and a B.E in Mechanical and Electrical Engineering from Monash University, Melbourne, Australia.

Vincent Byrne has over 30 years of engineering, operations and process optimization experience focused on commodity and specialty pulping processes. Most recently he acted as VP Technical and Engineering at AV Group where he led the development of the conversion of one of their New Brunswick mills into a dissolving pulp operation. Mr. Byrne obtained a B.Sc. in Chemistry from Massey University, New Zealand.

Donald Deer has approximately 40 years of engineering and construction experience in Canada and has managed in excess of $1 billion in capital spending for several major corporations including Tembec Inc. Most recently, Mr. Deer was responsible for construction and completion of the conversion of one of AV Group’s NBHK mills into a dissolving pulp operation. Mr. Deer also has recent experience designing cogeneration and energy optimization projects. Donald Deer has a B.E in Electrical Engineering from Queens University, Ontario and is a member of Professional Engineers Ontario.

Pierre Monahan is a highly experienced senior board member and executive director. Mr. Monahan was formerly the CEO of Alliance Forest Products Inc. and Executive Vice President of Bowater Canada Inc. during which time he oversaw its integration with Alliance Forest Products Inc., an acquisition valued at approximately $1 billion.

In addition Fortress announces that the former Operations Director of Fraser Paper’s Thurso Mill, Marco Veilleux, has been appointed Chief Operating Officer of Fortress Specialty Cellulose. Mr. Veilleux has led the Thurso operation since 2007 having developed his career in a series of operational and technical leadership roles in the pulp and paper sector in Eastern Canada. He was instrumental in initiating the cogeneration project and ensuring the Thurso assets are well positioned for the transformation. Mr. Veilleux has a B.Sc. in Chemistry from the University of Sherbrooke.

About Fortress Paper

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress Paper operates three mills, the Landqart Mill located in Switzerland, the Dresden Mill located in Germany and the Fortress Specialty Cellulose Mill located in Quebec, Canada. Fortress Paper’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. Fortress Paper’s pulp business will include NBHK with the re-start of the Fortress Specialty Cellulose Mill with plans to convert this capacity into dissolving pulp production along with the construction of a biomass based cogeneration plant.

This news release contains certain forward-looking statements that reflect the current views and/or expectations of Fortress Paper with respect to its performance, business and future events, including statements relating to its plans to re-start, convert and build a biomass based cogeneration plant at the Fortress Specialty Cellulose Mill. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Corporation operates, including assumptions relating to the Corporation’s ability to successfully implement its business plan in respect of the Fortress Specialty Cellulose Mill; that the Corporation will be able to receive all required approvals and complete construction of the cogeneration facility; and the expected effects of the cogeneration facility on the business of the Corporation. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, that the Corporation will be unable to implement its business plan in respect of the Fortress Specialty Cellulose Mill as planned or at all; that the Corporation will be unable to receive all necessary approvals to begin construction of the cogeneration facility; and those risks relating to changes in the market, potential downturns in economic conditions, fluctuations in the price and supply of raw materials, foreign exchange fluctuations, labour relations, regulatory requirements, reputation, competition, dependence on major customers, and other risk factors listed from time to time in the Corporation’s public filings. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. Fortress Paper does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

SOURCE:
Fortress Paper Ltd.

Pulp And Paper Canada: “Fortress Paper’s Thurso Mill Resumes Production Ahead of Schedule”

Posted: Wednesday, June 2nd, 2010

Fortress Specialty Cellulose Inc. began production and sale of NBHK pulp from the company’s mill in Thurso, Que., on May 28. The mill reopened May 1 after being shut down by its former owner in early 2009.

Chad Wasilenkoff, CEO of parent company Fortress Paper Ltd., commented: “We are pleased that production has commenced ahead of schedule and this will enable us to take advantage of the current strong NBHK pulp prices.”

Fortress Specialty’s Thurso Mill is expected to produce approximately 250,000 air dried metric tonnes per annum of high grade northern bleached hardwood kraft pulp. Fortress Specialty intends to produce NBHK pulp while undergoing transformation to become a dissolving pulp producer in mid 2011.

SOURCE:
Pulp And Paper Canada: “Fortress Paper’s Thurso Mill Resumes Production Ahead of Schedule”

NBHK Pulp Production Begins at Fortress Paper’s Thurso Mill

Posted: Tuesday, June 1st, 2010

VANCOUVER, BRITISH COLUMBIA–(Marketwire – June 1, 2010) – Fortress Paper Ltd. (“Fortress Paper” or the “Corporation”) (TSX:FTP) announces that its wholly-owned subsidiary, Fortress Specialty Cellulose Inc. (“Fortress Specialty”), commenced production and sale of NBHK pulp on May 28th. The mill reopened May 1st after being shut down by the former owner in early 2009.
Chad Wasilenkoff, CEO of Fortress Paper Ltd. commented: “The commencement of production at the Fortress Specialty Cellulose Mill marks the achievement of an important milestone at Thurso. We are pleased that production has commenced ahead of schedule and this will enable us to take advantage of the current strong NBHK pulp prices.”

Fortress Specialty’s Thurso Mill is expected to produce approximately 250,000 air dried metric tonnes per annum of high grade northern bleached hardwood kraft pulp. Fortress Specialty intends to produce NBHK pulp while undergoing transformation to become a dissolving pulp producer in mid 2011.

About Fortress Paper

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress Paper operates three mills, the Landqart Mill located in Switzerland, the Dresden Mill located in Germany and the Fortress Specialty Cellulose Mill located in Quebec, Canada. Fortress Paper’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. Fortress Paper’s pulp business will include NBHK with the re-start of the Fortress Specialty Cellulose Mill with plans to convert this capacity into dissolving pulp production along with the construction of a biomass based cogeneration plant.

This news release contains certain forward-looking statements that reflect the current views and/or expectations of Fortress Paper with respect to its performance, business and future events, including statements relating to its plans to re-start, convert and build a biomass based cogeneration plant at the Fortress Specialty Cellulose Mill. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Corporation operates, including assumptions relating to the Corporation’s ability to successfully implement its business plan in respect of the Fortress Specialty Cellulose Mill; that the Corporation will be able to receive all required approvals and complete construction of the cogeneration facility; and the expected effects of the cogeneration facility on the business of the Corporation. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, that the Corporation will be unable to implement its business plan in respect of the Fortress Specialty Cellulose Mill as planned or at all; that the Corporation will be unable to receive all necessary approvals to begin construction of the cogeneration facility; and those risks relating to changes in the market, potential downturns in economic conditions, fluctuations in the price and supply of raw materials, foreign exchange fluctuations, labour relations, regulatory requirements, reputation, competition, dependence on major customers, and other risk factors listed from time to time in the Corporation’s public filings. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. Fortress Paper does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

SOURCE:
Fortress Paper Ltd.

Fortress Paper Closes Acquisition To Enter The Specialty Cellulose and Bio Energy Sectors And The Associated Financing

Posted: Sunday, May 2nd, 2010

VANCOUVER, British Columbia, April 30, 2010 – Fortress Paper Ltd. (“Fortress Paper” or the “Corporation”), a leading producer of security and specialty papers, is pleased to announce the successful completion of its acquisition of the assets of a northern bleached hardwood kraft (“NBHK”) manufacturing facility located in Thurso, Quebec (the “Thurso Mill”) from Fraser Papers Inc. (“Fraser”) for net proceeds of approximately $1.2 million. With this successful acquisition, Fortress Paper will commence the conversion of the Thurso Mill into a world class, low cost, specialty cellulose (dissolving pulp) operation. Concurrently, Fortress Paper intends to build a biomass-based cogeneration plant at the Thurso Mill which will produce green electricity resulting in material net energy savings (income).

Chad Wasilenkoff, CEO of Fortress Paper, states, “We are pleased to announce the transaction has closed. We intend to move aggressively to ramp up operations at the Thurso Mill and anticipate production of NBHK to commence in mid June of this year during the interim period while we immediately begin the conversion of the Thurso Mill into a dissolving pulp operation. We are finalizing the terms of employment with several key individuals with extensive experience in dissolving pulp conversions and should be able to provide more details on this matter in the coming weeks. This acquisition will diversify our specialty product mix and we believe will provide a significant financial contribution to Fortress’ growth aspirations.”

The acquisition of the Thurso Mill has been completed through its wholly-owned subsidiary Fortress Specialty Cellulose Inc. (“Fortress Specialty”). The Corporation intends to incur capital expenditures of approximately $153 million to convert the non‑operating NBHK mill into a high quality specialty cellulose mill and to construct a new cogeneration facility.

Concurrent with the completion of the acquisition the Company has finalized $102.4 million project financing with Investissement Québec (“IQ”) and a $15 million convertible debenture (the “Debenture”) with Solidarity Fund QFL. Additionally, included in the assets being purchased is approximately $9.9 million in credits (black liquor credits) granted under the Canadian government’s Pulp and Paper Green Transformation Program. Fortress Paper also intends to apply for approximately $15.2 million in federal credits under the Green Infrastructure Fund program of the Minister of Transport, Infrastructure & Communities relating to the planned cogeneration project.

New collective agreements have been negotiated with all three unions which will be in effect until 2016. The defined benefit pension plan which existed under the previous collective agreements has been replaced with a defined contribution pension plan, eliminating the risk of future unfunded pension liabilities. Under these new agreements, Fortress will not be assuming any of the previous pension liabilities. Management is confident that these agreements will ensure a positive partnership with the union and a stable, efficient cost structure through the transition into dissolving pulp.

Further Details:

Fortress Paper has completed a loan agreement whereby Investissement Québec has agreed to provide up to $102.4 million to Fortress Specialty to support the proposed business plan in respect of the Thurso Mill. The loan is secured by the capital assets of Fortress Specialty and has a term of 10 years. Interest will be calculated at a fixed rate of 5.0% per annum for the first five years, followed by a rate based on the cost of IQ’s funds plus 2.0% for the remaining five years, up to a maximum of 5.5% per annum.

Fortress Paper has also issued a $15 million convertible debenture (the “Debenture”) to Solidarity Fund QFL. The convertible debt matures in five years with an interest rate of 7% per annum. The Debenture is convertible, in whole or in part, at the option of Solidarity Fund QFL into common shares of Fortress Paper at any time after closing of the debenture at a conversion price equal to $20.00.

The Solidarity Fund QFL is a development capital company that channels the savings of Québec residents into investments in all sectors of the economy to help create and maintain jobs and to further Québec’s economic growth. The Fund is a partner, either directly or through its network members, in approximately 2,000 companies.

The specialty cellulose mill is planned to have an annual production capacity of more than 200,000 air dried metric tonnes and is expected to be completed in mid-2011. In entering into the specialty cellulose sector, Fortress Specialty will focus on producing dissolving grade cellulose for the textile industry, primarily targeting viscose fibre (rayon) products which have shown strong growth of approximately 10% in China and 7% worldwide over the past five years. Rayon is a technically evolved and versatile fibre with many advantages, particularly in the warmer and higher growth regions of the world.

Fortress Paper also plans to construct an approximately 25 megawatt cogeneration facility to service a net 18.8 megawatt power supply agreement over a 15 year term. The location of the cogeneration facility provides it with access to on‑site generation of biomass and an extensive local network of chip and other biomass suppliers. The cogeneration facility is expected to be supplying electricity in the fourth quarter of 2012.

A New Lease on Life for the Outaouais Cellulose Pulp Mill—Québec Government Loan Enables Fortress Specialty Cellulose Inc. to Convert its Thurso Mill

Posted: Friday, March 26th, 2010

Thurso, March 26, 2010 – Québec Premier Jean Charest and the Minister for Transport, Minister responsible for the Outaouais region and MNA for Papineau, Norman MacMillan, announced today a $102.4 million interest-bearing loan to Fortress Specialty Cellulose Inc. (FSCI) for its Thurso facility, formerly owned by Fraser Papers Inc. Awarded through Investissement Québec, the financial assistance will be used to convert the former pulp mill for cellulose production.

With a total estimated value of nearly $175 million, the FSCI initiative is designed to convert the Thurso mill from a facility that manufactures kraft pulp for paper into a cellulose pulp production facility and to set up a cogeneration power plant. The plant’s new product targets the viscose fibre (rayon) market, which is showing strong worldwide growth. Viscose fibre is most often blended with cotton, wool and polyester fibre to produce textiles and knits for the apparel industry.

“Putting the Thurso mill back into production is good news for the forest industry and part of an industrial development strategy that focuses on high value-added products,” declared the Premier. “The success of this operation will no doubt serve as a model for the forest industry’s future,” he added.

On the employment front, the outlook for the conversion project is bright. In addition to enabling the facility to call back 290 employees who worked for Fraser Papers, it will also help maintain some 1,500 direct and indirect jobs in the forest industry and throughout regional businesses.

“I am very pleased with today’s announcement, not only for the region but also for the forest industry. Fortress’s project proves that it is possible to find promising new solutions to help stimulate the forest industry and the Outaouais region’s economy,” said Minister Norman MacMillan.

“We are pleased to receive the Québec government’s support for the conversion of the Thurso mill. Fortress is confident that this undertaking will be a success, given Québec’s favourable business environment and the positive outlook for world markets,” affirmed Mr. Chad Wasilenkoff, President and CEO of Fortress Specialty Cellulose and Fortress Paper.

In addition to converting the mill for an industry that offers greater potential for long-term growth, the project will keep the city of Thurso’s water treatment plant in operation with no additional investments. In fact, all the necessary equipment can be found at the mill.

The Thurso facility was mothballed in June 2009, resulting in layoffs for 330 people in the single-industry municipality. The closing also had a major impact on the forestry activities of some 30 Québec companies.

About the Ministère du Développement économique, de l’Innovation et de l’Exportation

The department’s mission is to support economic development, innovation, export trade and research by fostering coordinated and concerted efforts by stakeholders representing the economic, scientific, social and cultural arenas. In so doing, it seeks to promote job creation, economic prosperity, scientific development and sustainable development.

In addition, the department portfolio encompasses various government corporations, agencies and funding bodies, including Investissement Québec.

SOURCE:
Investissement Québec: “A New Lease on Life for the Outaouais Cellulose Pulp Mill—Québec Government Loan Enables Fortress Specialty Cellulose Inc. to Convert its Thurso Mill”