Kruger Announces $575 Million Investment to Build New Ultra-Modern Tissue Plant

With operations in full swing, Kruger expects the plant to produce nearly 70,000 metric tonnes of tissue and paper towels per annum.

SEATTLE (Scrap Monster): Kruger Products announced major investment plan to expand its footprint in Quebec. The company plans to invest $575 million to build a new state-of-the-art tissue plant in Brompton area, Sherbrooke, Quebec. The construction of the plant is scheduled to begin early next year, with production expected to commence in early 2021. The project will create approximately 180 new jobs in the region.

The company press release states that the new plant will be located adjacent to the Kruger’s existing facility. It intends to create the new plant as part of a strategic manufacturing hub, along with its other locations in Crabtree, Gatineau and Sherbrooke. With operations in full swing, Kruger expects the plant to produce nearly 70,000 metric tonnes of tissue and paper towels per annum.

The tissue plant will operate the latest through-air-dry (TAD) machine which features the most advanced tissue products manufacturing facility. The plant’s TAD 2 machine will be the first of its kind in entire Quebec region. IT must be noted that Kruger Products has been using TAD machine at its Memphis, Tennessee plant since the past five years.

The project, supported by the Quebec government, is expected to be financed with 40% equity and 60% debt in a newly-created, wholly-owned indirect subsidiary of KPLP. The provincial government has already committed to invest $105 million through Investissement Québec by way of a convertible debenture. The company is in the process of finalizing the remaining financing for the project, sources said.

Dino Bianco, CEO of Kruger Products noted that the project is expected to help the company grow its business into the future by making significant addition to its capabilities. The project will generate huge economical benefits for the province, including over $250 million in direct expenses in Quebec.

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