A new class of Catalyst Paper Corporation common shares began trading on the Toronto Stock Exchange on Monday, January 7.
The company’s shares, which were delisted from the market in March 2012, trade under the symbol CYT.
The company has also initiated a program for shareholders with a small amount of stock if they wish to sell them all at once. Investors of record as of January 3 with fewer than 100 of its new shares will be able to sell them without incurring commission charges.
Brian Johnston, Powell River division manager, provided a business outlook during a recent community stakeholders’ meeting, noting the company continues to increase its market share in challenging paper markets. Catalyst emerged from the Companies’ Creditors Arrangement Act process at the end of September, with about $450 million less debt and a new board of directors. But some of the fallout from the process included reductions in retirees’ pensions and the closure of the Snowflake mill in Arizona, Johnston explained.
As well, the company is required to sell its 50 per cent interest in Powell River Energy Inc. (PREI). Catalyst’s partner is Brookfield Renewable Power. PREI owns two hydroelectric dams on Powell Lake and Lois Lake and provides power to the Powell River mill at a fixed rate set out in a power purchase agreement, approximating current BC Hydro rates.
Johnston said Catalyst is talking to Brookfield as well as other companies about selling its share and hopes to have it sold by early this year. He noted that he doesn’t expect any significant changes to the mill’s costs after the sale.
Year-to-date, Catalyst has made about $14 million, Johnston said. Even though the paper business is still challenging, Catalyst is managing to grow market share, he added.
Johnston provided an overview of the kinds of paper Catalyst is making in the Powell River mill. At one time the mill made mostly newsprint and many of the newspapers published on the West Coast were printed on paper made in Powell River.
Toward the end of 2012, it had produced about 375,000 tonnes of paper and less than 25,000 tonnes of that was newsprint, he said. There have been significant changes over the last number of years to make paper for flyers, inserts in newspapers and magazines. “The higher-gloss, brighter paper is primarily what is being made at the Powell River mill,” he said.
Looking forward, Johnston said 2013 will still be challenging for the paper market, but he expressed confidence in the company’s sales force. He explained that the company’s share of the hi-brites and glossy paper market has increased year over year compared to its competitors, in markets that have been declining six to eight per cent a year. “A five per cent decline in our market is considered good these days,” he said. “We’re talking about businesses that have declined by 12 to 15 per cent a year for the last number of years.”
The Powell River mill has been hiring, Johnston said, with 11 new salaried people starting since the beginning of September, three more starting by January and four more positions to be filled. Since the beginning of 2012, 17 hourly employees have been hired, with the company looking to hire another 13.
Johnston said he will be working on safety in the mill, noting that in 2012, 13 employees were injured badly enough that they needed a doctor’s care and four had lost-time injuries. The mill is recommitting to proven practices, he said, pointing out that in 2005, the Powell River division was the safest mill in Canada for an operation its size. “What we’re going to try to do is exactly what we were doing back then,” he said.
The company is investing $13 million in capital projects in the Powell River division by the end of 2013, Johnston reported. Projects include an expansion of the Wildwood landfill and upgrades to a generator, turbine and a drive system that will allow No. 9 paper machine to get off 50-hertz power.
The mill took an eight-day curtailment late December in expectation of softening markets in January. Paper production was stopped during that time, but the power boiler continued to run and generate electricity.
