Kruger Packaging invests $250M in its Trois-Rivières Mill
Newsprint machine will be converted to manufacture 100% recycled, lightweight linerboard.
TROIS-RIVIÈRES, Que. — The sharp decline in newsprint sales as a result of the growing switch to digital technology is forcing another Canadian paper producer to switch products.
Kruger Packaging LP is investing $250 million to convert the No. 10 Newsprint Machine (PM10) at its Trois-Rivières Mill to manufacture 100% recycled lightweight linerboard.
The modernization project will generate significant growth opportunities for the Trois-Rivières facility, contributing to secure operations and the 270 jobs at the mill. The project has received $190 million in support from the Québec government, which includes an $84-million loan to finance the cost of the conversion and a $106-million participation, through Investissement Québec, in a new company that now combines all of Kruger’s Containerboard and Packaging activities.
The Québec government will have a 25% ownership in the new company, which has assets in excess of $600 million and more than 800 jobs, including 620 in Québec will be secured.
Over the next 20 months, PM10 will be completely modernized to incorporate advanced containerboard manufacturing technology. Once PM10 is up and running in 2017, it will produce 360,000 metric tonnes of 100% recycled lightweight linerboard annually, a portion of which will be sold to Kruger Packaging’s box plants in LaSalle (Quebec) and Brampton (Ontario), while the remainder will be sold on the market.
The Trois-Rivières Mill will continue to produce newsprint on PM10 until two months before the end of the conversion project. Meanwhile, the mill’s other newsprint production line will remain in operation.
The conversion follows moves by other companies to close newsprint mills or convert to other paper grades in the wake flagging demand that has seen shipments down 13.5 per cent in July from a year earlier and off five per cent from June. Exports, which account for nearly one-third of total shipments, declined 11 per cent.
Resolute Forest Products (TSX:RFP) reduced its newsprint capacity by 465,000 tonnes last year by closing a newsprint mill in Iroquois Falls, Ont., and permanently idling paper machines at two Quebec mills as it sheds 300 jobs.
Paper Excellence announced in July the permanent closure of its mill in Howe Sound, BC, that would remove 200,000 tonnes of capacity and 180 jobs.
Founded in 1904, Kruger Inc. is a producer of publication papers, tissue products, containerboard and packaging made from recycled fibres, green and renewable energy, cellulosic biomaterials, and wines and spirits. It has facilities in Québec, Ontario, BC, and Newfoundland and Labrador, as well as in Tennessee, Maine, New York, Virginia and Rhode Island in the US.
Files from Canadian Press