Kruger Inc. Declares Major Diversifications at Quebec Mills

MONTREAL (Scrap Monster): The Canadian corporate, Kruger Inc. has announced multi-million dollar investment towards implementing major diversification projects at its Quebec mills. According to the company press release, a total of $377.6 million will be invested over a specific period of time to diversify operations at its Brompton and Wayagamack Mills in Quebec province. This major project, which will be implemented in partnership with the Government of Quebec is expected to generate nearly 500 jobs in the Mauricie and Estrie regions.

As per the terms of partnership deal between Kruger and the Government of Quebec, a new entity named Kruger Specialty Papers Holding LP will be formed by combining the assets of its Brompton and Wayagamack Mills along with the Biomass Cogeneration Plant adjacent to the Brompton Mill. Also, Investissement Québec will act as the government’s agent. The project will receive loans and loan guarantee worth $59.8 million from Investissement Québec. In addition, the professional guidance and financial solutions provider will also acquire 37.5% equity participation in the new entity.

Accordingly Kruger will concentrate more on specialty operations such as flexible food packaging, labelling and digital printing. At the same time, it will gradually reduce the production of some publication paper products such as newsprint and magazine paper, whose market has seen huge decline over the past few years. Incidentally, the Brompton Mill currently manufactures nearly 200,000 metric tonnes of newsprint per annun.

Kruger Specialty Papers Holding LP plans to invest $107.5 million over the next three-year period at its various Quebec mills. Out of this, $47.5 million will be distributed to Brompton mill and $32.9 million to Wayagamack Mill. The Trois-Rivières Mill will receive an investment of $22.3 million, whereas $4.8 million investment will be earmarked to Biomass Cogeneration Plant, Kruger press release noted. The above investment will be utilized towards purchase of new production equipment, maintenance of existing ones, bringing in technical improvements to boost productivity and to implement various energy efficiency measures. Upon completion of the project, the company will be able to locally procure an additional 10,000 metric tonnes of wood chips per annum, which in turn will provide big boost to the Qubec’s sawmill sector.

Kruger Inc. is a major producer of publication papers, tissue products, containerboard and packaging made from recycled fibres, renewable energy, cellulosic biomaterials, and wines and spirits.