| PAPER INDUSTRY NEWS - APRIL 2006 |
This page contains pulp and paper industry news for April 2006
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NEWS APRIL 2006
Cascades acquires Caraustar’s Sprague board mill
Kingsey Falls, (Québec) April 21, 2006 — Cascades Inc. (CAS-TSX)
announces that it has entered into an agreement with Caraustar Industries, Inc.
(NASDAQ:CSAR) ( “Caraustar”) to acquire the assets of Caraustar’s coated
recycled board mill located in Sprague, Connecticut for a total purchase price
of
US$ 14.5 million. Closure of this transaction is subject to the approval of the
environmental authorities of the State of Connecticut. The parties anticipate
these formalities will be completed within a month.
The Sprague mill is a state of the art manufacturing facility with an annual
production capacity of close to 180 000 short tons which represents an estimated
7% of the North-American coated recycled boxboard manufacturing capacity.
Concurrently with the signature of the purchase agreement the parties also
signed a five year board supply agreement pursuant to which Cascades will supply
annually 30,000 short tons of coated recycled board to Caraustar’s folding
carton plants.
Commenting on the transaction, Alain Lemaire, President and Chief Executive
Officer of Cascades Inc. stated : “This transaction represents a further step
towards our stated goal of improving the performance of our Boxboard Group. As
was the case with previous transactions realized by this group, this acquisition
will allow us to increase productivity at all of our board mills while improving
profitability thru an improved product and customer mix. Moreover this
acquisition will enable us to move our board manufacturing closer to our
customer base while increasing our presence in the United States thereby further
reducing our exposure to fluctuations in the exchange rate.”
Tembec to shut down indefinitely its Smooth Rock Falls, Ontario pulp mill
Temiscaming, Quebec, April 24, 2006 –
Tembec today announced that its market pulp mill located in Smooth Rock Falls,
Ontario will be idled indefinitely, effective July 31, 2006. The Smooth Rock
Falls mill produces 200,000 tonnes of Northern Bleached Softwood Kraft (NBSK)
pulp annually. The idling will affect approximately 230 employees.
A number of factors have combined to make this decision necessary. Key among
these were the high value of the Canadian dollar and the high manufacturing
costs at this site relative to global competition. “The combined effect of these
factors created a situation that could not be sustained. While there has been
some progress over the past two years relative to reducing the delivered cost of
fibre, the overall financial performance of the Smooth Rock Falls mill has been
unacceptable,” said Terrence P. Kavanagh, Executive Vice President and Chief
Operating Officer.
“Decisions of this nature are never easy to make, and Tembec regrets the impact
of today’s announcement on employees, their families and the Smooth Rock Falls
community,” concluded Mr. Kavanagh.
This decision is consistent with the recovery plan that was announced previously
by Tembec President and CEO, James Lopez. Margin improvement at all
manufacturing locations is central to this plan, and the Company had indicated
that, where no long term solutions could be identified and implemented to
achieve this goal, necessary action would be taken.
During a series of meetings held today, the Smooth Rock Falls employees and
union representatives were informed of the Company’s decision. The employees had
the opportunity to ask questions and discuss the situation with mill management.
Tembec indicated that it will monitor market, operating and financial factors to
determine when or if a future resumption of operations is possible.
Tembec is a large, diversified and integrated forest products company. With
operations principally located in North America and in France, the Company
employs approximately 10,000 people. Tembec’s common shares are listed on the
Toronto Stock Exchange under the symbol TBC. Additional information on Tembec is
available on its website at www.tembec.com
Kingsey Falls, Québec, April 25, 2006 - Cascades Inc. (CAS-TSX)
announces that it has acquired certain of the assets of the paperboard division
of Simkins Industries located in Ridgefield, New Jersey and in New Haven,
Connecticut, for $US 12.5 million. The board mill located in Ridgefield, New
Jersey will be closed within a short period of time while the mill in New Haven
will continue to operate during a transition period the duration of which has
yet to be finalized.
Concurrently with the purchase of these assets, Cascades and Simkins entered
into a multi-year Supply Agreement for the supply of recycled coated boxboard to
Simkins’ folding carton plants. Simkins remains committed to growing its
Specialty Papers and Folding Carton Divisions, and continuing to meet its
customers needs.
Commenting the transaction, Mr. Alain Lemaire, President and CEO of Cascades
stated : "We are pleased to announce this transaction which fits very well with
our strategy of optimizing our North-American boxboard operations and also
should over time, lead towards better overall efficiencies and operating rates
for our mills. We will make every effort to meet the requirements of our new
customers by enabling them in particular to benefit from our expertise in the
manufacturing of boxboard. ”
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