Paper Excellence completes deal for three mills

Richmond-based Paper Excellence now owns three pulp and paper mills previously operated by Catalyst Paper.

The formal transfer of ownership was marked Monday in Crofton, where one of the three Catalyst mills is located. The acquisition also includes Catalyst’s distribution centre in Surrey, and mills in Port Alberni and Powell River.

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Paper Excellence has not divulged how much it paid to acquire Catalyst, which has struggled financially for a decade, thanks in part to declining demand for newsprint and other paper products in the digital age.

Catalyst, previously a publicly traded company, nearly went bankrupt in 2012, when it sought creditor protection, and emerged from that experience as a private company. Last year, it was singled out by the U.S. with punishing duties on newsprint, although they were later lifted.

Catalyst employs 1,600 workers in B.C. and is Crofton’s largest employer, so the mill’s closure would have been a major blow to the community.

“At a time when pensions were at risk, at a time when your very jobs were at risk, Paper Excellence stepped up,” said Premier John Horgan, who was on hand to mark the official rebranding of the Crofton mill.

“They took a look at the bones, the framework that was here in Crofton and in Powell River and in Port Alberni and they made a conscious decision to invest in you, to invest in B.C. workers and to invest in the economy.”

Al Siebring, mayor of North Cowichan, said the Crofton mill has been a mainstay of the Cowichan Valley’s economy and social fabric for 60 years.

“The Crofton mill, irrespective of the ownership, has been a major driver for our economy,” Siebring said. “It’s provided long-term, sustainable, well-paying jobs for hundreds of people over the years.”

In an attempt to make more fibre available to both sawmills and pulp and paper mills, the NDP government is implementing its Coast Forest Sector Revitalization plan, which aims to reduce log exports and make more wood waste available to pulp and paper mills.

Siebring acknowledged those efforts, but added that “fibre supply is still a major issue as is the question of B.C. Hydro.”

Catalyst is the largest industrial power customer in B.C., and power rate increases have added millions to its operating costs. The NDP government last year cut the PST on electricity sales in half for industry and business, however. Next month, PST on commercial power sales will be eliminated entirely.

Paper Excellence is owned by Jackson Widjaja, grandson of the late Eka Tjipta Widjaja, the Chinese-Indonesian billionaire who owned Asia Pulp and Paper, a subsidiary of Sinar Mas Group.

Over the past decade, Paper Excellence has bought up a number of struggling and idled pulp and paper mills in Canada, including the Tembec mill in Chetwynd, which had been idled in 2012, and the Mackenzie pulp mill.

In B.C. it also owns the Howe Sound Pulp and Paper mill and Skookumchuk mill near Cranbrook. It has a mill in Nova Scotia, one in Saskatchewan and two in France.

After acquiring the Howe Sound mill, Paper Excellence invested $150 million to modernize it, and invested $50 million in the former Tembec mill in Chetwynd.

“We have, and will continue to, invest in our facilities and people to enable us to compete globally at the highest of levels,” said Brian Baarda, who was named Paper Excellence’s CEO last year.

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