Fortress Paper plans to acquire Fraser’s Thurso pulp mill in Quebec, Canada

Mar 19, 2010. /Lesprom Network/. Fortress Paper Ltd. has signed an agreement to purchase the assets of a northern bleached hardwood kraft manufacturing facility located in Thurso, Quebec from Fraser Papers Inc, company said in a statement received by Lesprom Network. Fortress Paper plans to convert the operation into a world class, low cost, specialty cellulose (dissolving pulp) operation. The company also to build a biomass-based cogeneration plant at the Thurso Mill which will produce green electricity resulting in material net energy savings (income). Fortress Specialty Cellulose Inc., a wholly-owned subsidiary, will spend $153 million to convert the mill. The specialty cellulose mill is planned to have an annual production capacity of more than 200,000 air dried metric tonnes and is expected to be completed in mid-2011. The company plans to produce dissolving grade cellulose for the textile industry. The cogeneration facility will be capable of 25 megawatts and should be in operation by the 4Q 2012. Included in the assets being purchased from Fraser is approximately $9.9 million in credits (black liquor credits) granted under the Canadian government's Pulp and Paper Green Transformation Program. Investissement Quebec has committed, by way of an agreement in principle, to grant Fortress Specialty a loan in the amount of up to $102.4 million to support Fortress Paper's proposed business plan in respect of the Thurso Mill. The closing of the acquisition is anticipated to occur on or about April 30, 2010