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Paper Excellence says Domtar acquisition won’t impact HSPP, Catalyst

'The plan is for all our existing facilities, it’s business as usual'
Howe Sound Pulp and Paper Mill in Port Mellon.

A Paper Excellence official says operations at the Sunshine Coast’s paper mills won’t be impacted by the private company’s recently-announced deal to buy publicly-traded Domtar Corp.

“The plan is for all our existing facilities, it’s business as usual,” Graham Kissack, corporate communications VP, told Coast Reporter two days after Paper Excellence’s May 11 announcement.

Paper Excellence, which is based in Richmond and owned by Jackson Widjaja, whose grandfather founded Asia Pulp and Paper (APP), is expanding into the U.S. with the agreement, which has an enterprise value of about US $3 billion.

Montreal and South Carolina-based Domtar is an integrated manufacturer and marketer of uncoated freesheet paper in North America and one of the largest manufacturers of pulp in the world. It has 13 pulp and paper mills and 10 manufacturing and converting facilities in Canada and the United States.

Paper Excellence, a manufacturer of pulp and specialty, printing, writing, and packaging papers, operates seven mills in Canada, most of which are located in B.C., and produces and ships more than 2.8 million tonnes of product annually with a workforce of more than 2,800.

At full production, the Powell River site employees 360 people and is currently operating with about 300 people, according to Kissack. The machine at Catalyst was curtailed in the spring of 2020 and in March was expected to be up and running by May.

Howe Sound Pulp and Paper in Port Mellon has 375 employees, is operating at full production and has broken all-time production records over the past six months, with most of the Northern Bleach Softwood Kraft (NBSK) pulp product headed to Asia.

Businesses that depend on the Sunshine Coast mills and its workers “should be looking at this [deal] really positively,” Kissack said.

Current markets for pulp are good and the company is seeing an uptick in demand for wood fibre-based products again as markets trend away from single-use plastics, said Kissack.

Monthly prices for NBSK pulp have been rising steadily in the U.S., China and Europe since last November, according to data shared by Natural Resources Canada.

“With size comes strength,” and with the completion of the transaction, Paper Excellence will be more diversified and competitive internationally, said Kissack “We’re going to have better access to sell our products in markets.”

Global chief financial officer Joe Ragan said Paper Excellence, which acquired Catalyst Paper Corp. in 2019, will invest in Domtar's assets for long-term growth.

The companies say Paper Excellence intends to continue the operations of Domtar as a stand-alone entity. They say it will be led by its management team and Paper Excellence plans to keep its corporate and production locations.

COVID-19, meanwhile, has brought its share of changes to operations at HSPP, said Kissack, who acknowledged the company has dealt with exposure events, including one case at the lower Sunshine Coast mill.

“Like all communities we’ve had one-off situations where there’s been somebody come to the mill that is diagnosed positive COVID,” he said, adding risk assessment, quarantine and other public health measures are in place. “We’ve become very, very adept at managing under a COVID cloud.”

– with files from Ross Marowits, The Canadian Press