Paper Excellence to Acquire, Convert Prince Albert Mill to Dissolving Pulp
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Paper Excellence, a unit of Indonesia's Sinar Mas, will acquire Domtar's (Montreal, Que., Canada) idled Prince Albert, Saskatchewan, Canada, kraft pulp and paper mill and invest some $206 million to convert it to dissolving pulp production. Paper Excellence has been expanding rapidly in Canada, having last year purchased an idled pulp mill in British Columbia as well as the long-struggling Howe Sound pulp and newsprint operation in British Columbia from Canfor and Japan's Oji Paper. The company has owned a pulp mill in Meadow Lake, Saskatchewan, since 2007.
The deal, according to a Reuters news report, is the latest to highlight the increasing demand for dissolving pulp, which is currently being made by only a small number of mills around the world. Fortress Paper purchased a mill in Quebec last year to convert it to make dissolving pulp, and Chinese textile giant Fulida Group agreed last month to purchase an existing facility at Port Alice, British Columbia.
The Prince Albert deal is contingent on Paper Excellence reaching a labor agreement with the mill's unionized workers, but the Communications, Energy and Paperworkers union issued a press release praising the purchase. The mill has been idled since 2006, but the union said the deal would "preserve" about 200 jobs, according to Reuters.
The Saskatchewan government has agreed to allocate wood fiber to the mill and the province's SaskPower utility will purchase surplus electricity to be produced from a biomass generator at the mill. The province also helps fund employee training.
Weyerhaeuser, Federal way, Wash., USA, had closed the Prince Albert mill in 2006 after it was unable to find a buyer. Domtar, which took control of the site in 2007, has removed the plant's papermaking equipment and was considering demolishing the rest of it.
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