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Cascades acquires Bear Island newsprint mill for linerboard conversion

Canada-headed packaging and tissue producer Cascades Inc., has announced the acquisition of the White Birch, Bear Island manufacturing facility in Virginia, United States (US) for a cash consideration of US$34.2 million. The newsprint paper machine presently located on the site will be reconfigured to produce high quality recycled lightweight linerboard and medium for the North American market

The largest recycled paper collector in Canada, Cascades is a leading producer of corrugated products, tissue paper and speciality products in North America. It holds a majority interest in Italy’s Reno de Medici SpA (photo courtesy Cascades).

According to a statement, the new machine is expected to have an annual production capacity of 400 000 tonnes and construction costs on a per tonne basis that is competitive with similar conversion projects.

As presently contemplated, the conversion would require an estimated investment of between US$275 and US$300 million, with production expected to begin in 2021. Details of the project will be announced when plans are finalized and approved by the Board of Directors, which is expected in the course of 2019.

This project is directly in line with the goals of our strategic plan which include, among other things, investing in our core sectors of packaging and tissue through modernization, and expanding our geographical footprint. In addition to the paper machine that is particularly well suited for conversion, the Bear Island site is strategically located for raw material sourcing and logistics. Based on the success of our Greenpac Mill, we expect this to be a highly competitive facility that will significantly contribute to the success of our containerboard operations by supporting our geographic expansion in the US market, in addition to generating solid returns for our shareholders, said Mario Plourde, CEO of Cascades

During the period prior to the conversion, White Birch will temporarily operate the site as a newsprint mill, under a 27-month lease.

The Bear Island site has several advantages including access to an experienced workforce with expertise in papermaking. Moreover, the site provides a platform for continued growth through downstream converting capacity. It will also allow us to better serve our customers and to expand our market share by increasing our capacity to provide clients with high quality recycled lightweight linerboard similar to what we produce at our Greenpac Mill, said Charles Malo, COO of Cascades Containerboard Packaging.

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