Kingsey Falls, Quebec-based Cascades Inc. has announced the acquisition of the White Birch Bear Island paper mill in Ashland, Virginia. The newsprint paper machine presently located on-site will be reconfigured to produce recycled-content lightweight linerboard and medium for the North American market, according to Cascades.
Before the conversion takes place, Greenwich, Connecticut-based White Birch Paper will temporarily operate the site as a newsprint mill under a 27-month lease. Details of the project will be announced when plans are finalized and approved by the Cascades board of directors, which is expected sometime in 2019. Cascades has disclosed the mill will be purchased for $34.2 million.
The new machine is expected to have an annual production capacity of 400,000 tons and construction costs on a per-ton basis that Cascades calls “competitive with similar conversion projects.” As presently contemplated, the conversion would require an estimated investment of between $275 and $300 million, with production expected to begin in 2021.
“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,” says Mario Plourde, CEO of Cascades. “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 [in Niagara Falls, New York], 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 United States market, in addition to generating solid returns for our shareholders.”
Charles Malo, chief operating officer of Cascades Containerboard Packaging, says, “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.”
Cascades states that its continued focus on projects like Bear Island is aimed at modernizing production facilities in its core sectors of packaging and tissue. The company says it expects its capital expenditures in 2019 to remain at a level similar to 2018.
Founded in 1964, Cascades produces, converts and markets packaging and tissue products consisting mainly of recycled fiber. The Company employs 11,000 people at 90 locations in North America and Europe.