Canadian Forestindustries News

Resolute Forest Products (formerly known as AbitibiBowater) has purchased the idled co-generation plant at Dolbeau, Quebec from Boralex for $5 million.

AbitibiBowater idled its Dolbeau mill in June 2009, putting 240 workers out of work. Boralex operated the co-generation plant at the mill, producing steam generated power from wood waste. Boralex sold that power to Hydro-Quebec.

Boralex lost its supply of wood and steam when AbitibiBowater closed the Dolbeau mill, leaving Boralex little choice but to idled the co-gen plant.

Now that Resolute Forest Products owns the power generating plant, it is possible that Resolute may reopen one paper machine the mill.

Currently, Resolute is trying to convince Hydro-Quebec to restart the electricity purchase agreement.

Read more:
Resolute Forest Products buys Boralex co-generation plant in Dolbeau, Que. (Canadian Business)

Resolute Forest Products buys idled co-gen plant in Dolbeau, Quebec is a post from: ForestTalk.com

Fibrek Inc. has received the results of a formal evaluation of the company’s common shares.

Based upon and subject to the analyses and assumptions set out in its valuation, Canaccord Genuity is of the opinion that, as at February 3, 2012, the fair market value of a common share of Fibrek was in the range of $1.25 to $1.45.

After a review of the caluation, Fibrek’s Board of Directors has unanimously reaffirmed its recommendation to Fibrek shareholders that they reject the unsolicited insider bid made by AbitibiBowater Inc. (carrying on business as Resolute Forest Products) on December 15, 2011.

“The valuation by Canaccord Genuity confirms our belief that the Abitibi insider bid significantly undervalues the common shares of Fibrek, and that the lock-up agreements between Abitibi and certain shareholders deprive minority shareholders of the opportunity to obtain full value for their common shares of Fibrek,” stated Hubert T. Lacroix, Chairman of the Board of Fibrek. “The valuation demonstrates conclusively that Abitibi’s insider bid conveniently ignores probable and material new streams of operating income. Our goal continues to be to ensure that our shareholders are fully compensated for the full value of their investment in our Company.”

Read more:
Fibrek receives independent formal valuation and provides update on strategic alternatives review process (Fibrek)

Fibrek receives independent formal valuation is a post from: ForestTalk.com

Jim Snetsinger, British Columbia’s Chief Forester, told a convention of the Western Silviculture Contractors’ Association this week that the historic mountain pine beetle infestation in interior B.C. wasn’t as destructive as first feared.

“In 2006, we were projecting a mountain pine beetle kill of 80 per cent of pine by 2013,” Jim Snetsinger said. “Our 2011 models . . . now tell us mountain pine beetle will kill about 61 per cent of susceptible pine by 2021.”

Unfortunately the news isn’t all good. Snetsinger said the mountain pine beetle continues to kill large numbers of lodgepole pine. More than half of merchantable pine in the Interior has been lost to date, even though the mortality peaked in 2004-05.

Read more:
Pine beetle kill less than projected, says chief forester – Industry forester forecasts ‘golden era’ for sector (Kamloops The Daily News)

BC’s Chief Forester says pine beetle kill wasn’t as destructive as first feared is a post from: ForestTalk.com

Weyerhaeuser has reported net earnings of $65 million in their fourth quarter on net sales of $1.6 billion.

This can be compared to Weyerhaeuser’s net earnings of $171 million on net sales of $1.5 billion for the same period last year.

For the full year 2011, Weyerhaeuser reported net earnings of $331 million on net sales from continuing operations of $6.2 billion. This compares with net earnings of $1.281 billion on net sales from continuing operations of $6.0 billion for the full year 2010. Earnings for the full year 2010 include $1.064 billion from income tax adjustments related to Weyerhaeuser’s conversion to a Real Estate Investment Trust (REIT).

“In 2011 we took full advantage of opportunities to improve our performance in a weaker than expected US housing market,” said Dan Fulton, president and chief executive officer. “In Timberlands, we used our long term competitive strength in the Asian export markets to capitalize on emerging Chinese demand. Cellulose Fibers leveraged strong customer relationships and excellent operational performance to deliver a second consecutive year of record financial results. Our Real Estate business maintained profitability despite challenging market conditions, and Wood Products generated improved results. Through the sale of our hardwoods and Westwood Shipping Lines businesses we sharpened our strategic direction, and we remain focused on improving performance to generate superior sustainable returns for our shareholders in 2012.”

Read full results

Weyerhaeuser reports quarterly net earnings of $65 million is a post from: ForestTalk.com

Fibrek Inc. announced today that a proposal has emerged from its strategic alternatives review process, which was initiated by Fibrek’s Board following the unsolicited insider bid made by AbitibiBowater Inc. (carrying on business as Resolute Forest Products) on December 15, 2011.

The Board of Directors and Management are currently in negotiations with a number of third parties in response to the Insider Bid.

While it is impossible at this stage to predict whether any other competing offers will emerge, the Board expects to receive alternative proposals from such third parties.

Third parties have until 5:00 p.m. today, February 3, 2012 to submit their proposals.

Fibrek will update the market as appropriate as this process continues, but there can be no assurance that a transaction will take place.

As previously disclosed, Fibrek is currently in proceedings before the Bureau de révision et décision (Québec) following the application made by Abitibi and one of its affiliate for an order cease trading Fibrek’s shareholder rights plan. Fibrek is issuing this press release in response to a request made by the Bureau during the course of the proceedings to provide an update regarding any proposals having emerged to date.

The Board has determined that disclosure with respect to any negotiation, and the possible terms of, any transactions or proposals of the type referred to in the preceding paragraphs might jeopardize any discussions or negotiations that Fibrek may conduct.

The Board’s ongoing strategic alternatives review process continues and Fibrek will review the terms of any proposals received. Fibrek will remain in compliance with its obligations with respect to timely disclosure of information and, as applicable, disclose the terms of any transaction or proposal in the event that an agreement relating thereto has been reached.

Source: Fibrek

Fibrek expects to receive 3rd party proposals today is a post from: ForestTalk.com

The governments of New Brunswick and Canada are providing more than $17 million to Arbec Forest Products to restart the Miramichi OSB mill that was closed 5 years ago by Weyerhaeuser.

$15.3 million will be coming from the province of New Brunswick, including:

• $1.5 million payroll rebate
• $5.6 million term loan
• $1.2 million contribution for capital expenditures and start-up costs
• $7-million loan guarantee

The $2 million from the federal government will being called a “repayable contribution” for necessary upgrades.

Arbec Forest Products bought the Miramichi mill from Weyerhaeuser last month for $31 million. The company is undertaking a repair program, mill maintenance and equipment startup. Arbec plans to have the mill operational this fall, with a goal of reaching full operation by the spring of 2013. At least 100 jobs will return to the mill and the economically depressed region of the Miramichi in northern New Brunswick.

Under the Crown wood allocation agreement, Arbec Forest Products Inc. can annually harvest 277,802 cubic metres of mixed hardwood pulpwood and softwood pulpwood, which is more Crown wood than Weyerhaeuser had when the mill closed.

Once fully operational, at least half of the mill’s wood supply will come from private woodlots.

Sources:
Company receives financial assistance and wood allocation to reopen Miramichi mill (New Brunswick)
Miramichi mill to re-open -Will create more than 100 jobs (CBC)
Feds and New Brunswick ante up $17 million to help reopen shuttered mill (Canadian Business)

$17 million in funding for Arbec to reopen Miramichi mill is a post from: ForestTalk.com

Domtar Corporation has posted net earnings of $61 million in the fourth quarter of 2011.

These results can be compared to net earnings of $117 million in the third quarter of 2011 and net earnings of $325 million in the fourth quarter of 2010.

For the 2011 fiscal year, Domtar’s net earnings amounted to $365 million compared to net earnings of $605 million in 2010.

Commenting on the 2011 performance, John D. Williams, President and Chief Executive Officer, said, “Looking back at 2011, we delivered another strong performance. The second half was slightly more challenging due to the decline in pulp prices however we maintained our volumes. This solid performance enabled us to pursue our commitment to returning a majority of free cash flow to shareholders. In 2011, we returned over $543 million or $13.50 per share, representing 73% of total free cash flow, through a combination of share buyback and regular dividends.”

Read full release

Domtar reports net quarterly earnings of $61 million is a post from: ForestTalk.com

The workers of the idled NewPage Port Hawkesbury mill in Nova Scotia have filed a lawsuit for $168 million against the company.

The employees, represented by the Communications, Energy and Paperworkers (Local 972) are owed severance, pensions, and other benefits.

The claim was filed in the U.S. Bankruptcy Court on Tuesday.

Because NewPage is in a period of creditor protection, claim is contingent on the company being wound up and it being unable to pay the debts that it owes the union, its members and the pension plans.

“It doesn’t put us on a secured creditors list or any of those things we would like to see happen, but it puts us in the lineup for any money that may be available by the end of the process,” said Steve MacDougall, CEP Local 972′s recording secretary.

$127 million – mill division pension plan
$14 million – clerical pension plan
$14 million – woodlands pension plan
$7.16 million – severance to mill employees
$557,000 – severance to clerical division
$456,000 – severance to woodlands division
$5 million – long-term disability benefits

The lawsuit also states that the administrator of the pension plan is also filing a claim against the company for the funding deficiencies.

Source:
NewPage workers suing company for $168M (The Cape Breton Post)

NewPage Port Hawkesbury workers sue company for $168 million in unpaid severance, pensions, and benefits is a post from: ForestTalk.com

The document listing Terrace Bay Pulp‘s creditors is 8 pages long and totals $41,456,859.90 Canadian, and another $1,531,404.42 is owed in U.S. Funds.

The biggest creditor is the Ontario Government at $24,166,666.00

Many of the companies owed are in Terrace Bay and Thunder Bay, Ontario, ranging from chemical companies, to fuel supplies, trucking and transportation companies, office equipment providers, couriers, engineering firms, mechanical equipment, rental, and service providers, logging companies, and local food and accommodation providers.

View the full list [.pdf]

Who does Terrace Bay Pulp owe? is a post from: ForestTalk.com

The Honourable Joe Oliver, Minister of Natural Resources, today addressed representatives of Canada’s forest industry at a luncheon speech at PaperWeek 2012 in Montreal.

The Minister highlighted the importance of partnerships, innovation and market expansion to the future of Canada’s forest industry in helping to sustain jobs in rural communities across the country.

“Our Government’s top priority remains the economy,” said Minister Oliver. “We continue to invest in communities and initiatives that will make Canadian forest products even more attractive in the global marketplace. With the economic recovery still fragile, we continue to take action to protect and create important forest sector jobs across Canada.”

Minister Oliver acknowledged the industry’s resilience in facing a prolonged period of challenges and its desire to reinvent itself by greening its operations and developing innovative products with greater value-added.

The Minister also noted the huge growth in markets for Canada’s forest products, including pulp and paper, particularly in the Asia–Pacific region. He underscored that the Government recognizes the value of partnering with Canadian companies on market access and environmental branding in this and other regions.

Prior to his keynote luncheon speech, Minister Oliver met with industry representatives to discuss future opportunities and challenges for forest companies, which remain a key component of Canada’s economy and continue their transformation.

Support for broader forest sector transformation was provided in The Next Phase of Canada’s Economic Action Plan, which provided $60 million over one year to renew programs that focus on forest sector innovation and market development, including $25.5 million for the Transformative Technologies Program. This program, which is delivered by FPInnovations on behalf of the Government, supports the development and implementation of innovative products and processes, thereby enabling the forest products industry to extract more value from forest resources. For more information, please visit canadaforests.nrcan.gc.ca.

Source: Government of Canada

A word from Hon. Joe Oliver, Minister of Natural Resources is a post from: ForestTalk.com

The meetings between Kruger and the 8 union locals representing its workers at the Corner Brook Pulp and Paper mill have concluded and the word is at least 43 full time jobs have been cut.

31 of the jobs were CEP members.

8 machinists, members of the International Association of Machinists and Aerospace Workers, received notice today, and 4 more machinists will be laid off at a later date.

In an internal memo accidentally released by Kruger last week, the company said mills of comparable size are operating with 135 fewer employees than the Corner Brook Pulp and Paper mill.

The memo also mentioned the labour costs per tonne at the mill are $40 more than North American average of $100 and its main competitor plans to reduce its to $80.

Corner Brook Pulp and Paper is the only pulp and paper mill still operating in the province of Newfoundland and Labrador.

Read more:
More layoffs at Kruger’s Corner Brook mill (CBC)
Mill cutting at least 43 full-time jobs in Corner Brook (The Western Star)
Layoffs Begin at Corner Brook Mill (VOCM)

43 jobs cut in Corner Brook today is a post from: ForestTalk.com

Dan Leger, former editor of Halifax’s Chronicle Herald, has broke the news on his personal blog that the Nova Scotia government is in the process of cutting stumpage fees on crown land by a proposed 30%.

This will work out to a cost to Nova Scotia taxpayers of about $2 million a year.

Leger said the document has gone to the appropriate ministers for approval, but it is considered a done deal.

This reduction is likely another move by Premier Darrell Dexter to salvage the province’s forest industry.

“It’s hard to say how much the Dexter government has committed to the paper industry rescue. But it’s at least $100 million and the number is climbing. Forestry might be too big too fail in Nova Scotia. Too many rural and small town jobs are on the line, along with the frail prosperity of two big parts of our small province. So while paper might be too big to fail, you have to wonder whether it’s too expensive to save.”
~Dan Leger

Source:
Forests: the Crown takes a haircut (Dan Leger)

Nova Scotia in process of cutting stumpage by 30% is a post from: ForestTalk.com

The Western Star is reporting that Kruger is in the process of cutting jobs today at its Corner Brook Pulp and Paper mill.

Their sources say that all 8 union locals in the mill will have a separate meeting with the company throughout the day today.

The first union that met this morning was reportedly informed that some jobs falling under their umbrella were being cut.

Source:
Jobs being cut at Corner Brook mill (The Western Star)

Job cuts hitting Corner Brook Pulp & Paper today is a post from: ForestTalk.com

JP Morgan is providing Catalyst Paper with up to $175 million in debtor-in possession (DIP) financing to help fund its operations during its period of credit protection, under the Companies’ Creditors Arrangement Act (CCAA).

Advances under the DIP will be available after approval by the Court, which the company expects to obtain on February 3, 2012.

The company’s operating revenue combined with the proposed DIP financing are expected to provide sufficient liquidity to meet ongoing obligations to employees and suppliers and ensure that normal operations continue during the restructuring process.

Catalyst management will remain responsible for the day-to-day operations of the company.

The Supreme Court of British Columbia granted protection yesterday under the CCAA for an initial period expiring on February 14, 2012 to be extended as required and approved by the Court.

While the company and its subsidiaries are under CCAA protection, all proceedings on the part of their creditors are stayed.

The CCAA filing applies to:

• Catalyst
• Catalyst Paper General Partnership
• Catalyst Pulp Operations Limited
• Catalyst Pulp Sales Inc.
• Pacifica Poplars Ltd.
• Catalyst Pulp and Paper Sales Inc.
• Elk Falls Pulp and Paper Limited
• Catalyst Paper Energy Holdings Inc.
• 0606890 B.C. Ltd.
• Catalyst Paper Recycling Inc.
• Catalyst Paper (Snowflake) Inc.
• Catalyst Paper Holdings Inc.
• Pacifica Papers U.S. Inc.
• Pacifica Poplars Inc.
• Pacifica Papers Sales Inc.
• Catalyst Paper (USA) Inc.
• The Apache Railway Company

Source: Catalyst Paper

Catalyst Paper to receive $175 million in DIP financing from JP Morgan is a post from: ForestTalk.com

Bowater Mersey, in Nova Scotia, has cut the price it will pay for pulpwood cut on private land by 10%.

The price was cut from $36/tonne to $32.50/tonne, effective January 30.

This reduction is believed to be part of Bowater Mersey’s cost reduction initiative that has also seen 110 full and part time jobs cut at the mill.

Andrew Fedora, the executive director of the Federation of Nova Scotia Woodlot Owners, said the pulpwood price cut will affect hundreds of woodlot owners and small contractors in western Nova Scotia, who have already been feeling pressure after the closure of the NewPage Port Hawkesbury mill in Cape Breton.

“If the price was to drop a couple of more dollars a tonne, you could see a lot of people go out of business,” said Fedora. “I think the mills do realize that there is a threshold and they’ve always looked at that — that if you cut it too low, you’re going to completely lose your infrastructure.”

Pierre Choquette, the director of Canadian Public Affairs for Resolute Forest Products (Resolute is the managing co-owner of the mill), said the price change is in “response to supply and demand. It is about market conditions.”

Source:
Bowater cuts pulpwood pay by 10% (CBC)

Bowater Mersey cuts the price they’ll pay for pulpwood by 10% is a post from: ForestTalk.com

Domtar Corporation has announced that it has signed a definitive agreement with Fortress Global Cellulose Ltd, and with a subsidiary of the Government of Québec, for the sale of its Lebel-sur-Quévillon assets.

The transaction is subject to customary closing conditions and is expected to close in the second quarter of 2012.

“The sale of the Lebel-sur-Quévillon assets to a strategic buyer is a positive outcome for the community and we wish them success for the future,” said John D. Williams, President and Chief Executive Officer of Domtar. “The buyer will convert the mill to the manufacture of dissolving pulp and we will support them through this transition by marketing and selling their initial production of paper grade softwood pulp which is contractually limited to a maximum of 100,000 metric tons.”

As per the agreement, all pulp and sawmilling assets including the buildings and equipment will be sold to Fortress for the nominal sum of $1.00 and all lands related to the facilities will be sold to a subsidiary of the Government of Québec for the nominal sum of $1.00.

The manufacturing operations at the pulp mill ceased in November 2005 due to unfavorable economic conditions while sawmilling operations at the facility ceased in 2006. At closure, the pulp mill and sawmill directly employed 425 and 140 employees respectively.

Source: Domtar

Domtar enters agreement to sell closed Lebel-sur-Quévillon mill to Fortress for $1 is a post from: ForestTalk.com

Catalyst Paper Corporation has announced that to facilitate an orderly restructuring of its business and operations, the board of directors of the company has approved a filing for an Initial Order from the Supreme Court of British Columbia to commence proceedings under the Companies’ Creditors Arrangement Act (CCAA).

The terms and conditions of the restructuring plan have not yet been determined by the company.

The operations of Catalyst and its subsidiaries are intended to continue as usual and obligations to employees and suppliers during the restructuring process are expected to be met in the ordinary course. Catalyst management will remain responsible for the day-to-day operations of the company. The company expects that the Interim Order will provide that while the company and its subsidiaries are under CCAA protection, all proceedings on the part of their creditors will be stayed.

The company previously announced a consensual recapitalization transaction under the Canada Business Corporations Act (CBCA) that had the support of certain of the holders of the company’s 11% senior secured notes due 2016 and 7 3/8% senior notes due 2014 who were parties to a Restructuring and Support Agreement (Agreement). The Agreement provided that, among other conditions, the recapitalization transaction was subject to the following two conditions being met by January 31, 2012: (a) a new labour agreement ratified by all six union locals at the company’s BC mills and (b) two-thirds support of all 2014 and 2016 noteholders. Since these conditions will not be met, the company will not be proceeding with a recapitalization under the CBCA.

“Our debt restructuring objective remains clear and unchanged though our path forward was altered by recent setbacks,” said Catalyst President and Chief Executive Officer, Kevin J. Clarke. “Without the new labour agreement, and without two-thirds support of 2014 noteholders, the economics of the previously announced consensual restructuring transaction was undermined. After reviewing this matter carefully with our Board of Directors and advisors, we have elected to begin the CCAA proceeding,” he said. “The Board, management and our advisors believe this approach will best facilitate the completion of a recapitalization transaction that delivers the improvements to our liquidity and capital structure which are necessary to put our company on firm financial and competitive footing in the current business and economic environment.”

Catalyst manufactures diverse specialty printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With four mills located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.9 million tonnes. The company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst is listed on the Jantzi Social Index® and is also ranked by Corporate Knights as one of the 50 Best Corporate Citizens in Canada.

Source: Catalyst Paper

Catalyst Paper to file for creditor protection is a post from: ForestTalk.com

5 of the 6 union locals representing Catalyst Paper‘s work force at its Crofton, Powell River, and Port Alberni paper mills have voted in favour of a new collective agreement.

One local, PPWC Local 2 at the Crofton mill, voted against the tentative agreement on Saturday.

“We started discussions with all parties early knowing that difficult choices lay ahead and that decisions could not be taken lightly to successfully close a very complicated but vital restructuring process,” said Kevin J. Clarke, President and CEO. “With five union locals ratifying the new labour agreement – a commitment to our company that is very much appreciated – it is disappointing that we could not gain support of the sixth union local.

“Despite this setback, it’s important to recognize that a majority of employees are making daily contributions that are helping our company build a bridge to the future. A goal we all share is to put our company on stronger financial footing which helps keep machines running, helps save local jobs and supports mill communities – not just for weeks or months but for years,” he said.

The company previously announced that it has reached an agreement with certain noteholders for their support of a recapitalization through a plan of arrangement under the Canada Business Corporations Act. The agreement is subject to termination if a new labour agreement with all union locals at the company’s Canadian mills has not been ratified by January 31, 2012.

Source: Catalyst Paper

Catalyst Paper’s reaction to Crofton ‘no’ vote is a post from: ForestTalk.com

Pulp, Paper and Woodworkers of Canada (PPWC) Local 2 of the Crofton Pulp and Paper mill have voted against their tentative agreement with Catalyst Paper.

The vote was 58% against (132 voted Yes, 180 voted No).

Catalyst Paper has a deadline of January 31 to put in place new contracts with its unionized workers in order for the company to continue forward with their debt restructuring plan.

On Friday, Communications, Energy and Paperworkers Union of Canada (CEP) Local 1132 voted to support the new labour agreement, joining Locals 1, 76, 592 and 686 which had earlier ratified the agreement to take effect at expiry of the current agreement April 30, 2012. The CEP locals represent 700 employees at the company’s Crofton, Powell River and Port Alberni paper mills.

Source: PPWC Local 2

Crofton PPWC Local 2 votes ‘no’ to tentative agreement is a post from: ForestTalk.com

Norbord Inc. has posted a net loss of $11 million for the full year of 2011, compared to a net earning of $13 million in 2010.

“Our 2011 financial results are disappointing in absolute terms,” said Barrie Shineton, President and CEO. “However, I am pleased that Norbord’s operations in both North America and Europe performed exceptionally well this year. We achieved $25 million of margin improvement gains, reflecting an outstanding effort across our company in reducing manufacturing costs and increasing mill productivity. In North America, these gains allowed us to maintain positive EBITDA despite a 15% drop in OSB prices. In Europe, our business held up surprisingly well in the face of increasing economic uncertainty. We increased shipments by 10% and stronger product pricing offset sharply higher raw material costs.”

“Early indicators suggest some upside in both demand and price in North America as we move into the first quarter of 2012. The OSB supply chain is lean and less capacity appeared to be available at the end of last year. And, I believe our European business will continue to perform well, in spite of the evolving sovereign debt crisis that continues to dominate media headlines.”

Norbord Inc. is an international producer of wood-based panels with assets of $1 billion, employing approximately 2,000 people at 13 plant locations in the United States, Europe and Canada. Norbord is one of the world’s largest producers of oriented strand board (OSB). In addition to OSB, Norbord manufactures particleboard, medium density fibreboard (MDF) and related value-added products.

Source: Norbord (read full release)

Norbord reports a loss of $11 million in 2011 is a post from: ForestTalk.com