Paper Excellence Canada (PEC) has completed its acquisition of Catalyst Paper Corporation in British Columbia. The deal, announced last October, includes all shares of Catalyst and its three facilities located in Crofton, Port Alberni and Powell River, its Surrey distribution centre and headquarters in Richmond, BC. The purchase price was not disclosed.
Premier John Horgan attended the Crofton mill on Monday, March 18, for the company’s official rebranding ceremony.
“It’s important that we remind ourselves where were were just a little over a year ago,” said Horgan. “There were significant challenges. There was a big US duty being brought against us here in Canada directed almost exclusively at Catalyst Paper.”
Formerly a publicly-traded company, Catalyst nearly went bankrupt in 2012, seeking creditor protection and becoming a private company owned by three principal shareholders: Oaktree Capital Management, LP, Mudrick Capital Management, LP, and Cyrus Capital Partners, LP.
“At a time when pensions were at risk, at a time when your very jobs were at risk, Paper Excellence stepped up,” said Horgan.
When Catalyst announced a major pension shortfall in 2012, pensioners agreed to a reduction in their benefits. On July 27 last year, the Horgan government announced it had changed pension-relief regulations to protect the pensions of salaried retirees and workers at Catalyst. However, last week a cabinet order was signed exempting the transaction from the previous safeguarding requirement once again leaving pensioners at risk.
PEC is the largest pulp producer in Canada with three facilities in BC at Port Mellon, Mackenzie and Skookumchuck, as well as mills in Saskatchewan, Nova Scotia, and France.
“We have and will continue to invest in our facilities and people to enable us to compete globally at the highest of levels,” said Brian Baarda, who was named PEC chief executive officer last year. “With the addition of Catalyst’s 1,600 employees the Paper Excellence team grows to over 3,500 strong.”
Powell River’s mill will continue producing 334,000 metric tonnes of machine finished and soft calendered uncoated papers, specialty papers and newsprint. According to Baarda, the BC forest industry provides some 140,000 direct and indirect jobs and generates $12.9 billion to the gross domestic product as well as $200 million in taxes to municipal governments.
“For too long, I believe we’ve taken for granted our forest industry,” said Horgan. “That’s why last year we started working on what we announced in January, our [Coast Forest Sector Revitalization Plan] to reduce the number of raw logs leaving British Columbia, encouraging more value added production and creating more fibre for Crofton, Port Alberni and Powell River.” In the past 10 years Paper Excellence has purchased several struggling mills across Canada including the Tembec facility in Chetwynd and invested millions to modernize them.
“I’m grateful to Paper Excellence for committing to the BC forest industry,” said Horgan, “and helping to move it forward.”