Montreal-based Resolute Forest Products Inc. has announced the sale of its kraft pulp and paper mill in Catawba, South Carolina, to Ontario, California-based New-Indy Containerboard LLC. New-Indy will pay $300 million for the mill complex, pending the transaction’s completion, which is expected by the end of 2018.
The Catawba complex includes a kraft paper mill and a pulp dryer that produces market pulp, a thermomechanical pulp mill and a lightweight coated paper machine. Under terms of the asset purchase agreement, New-Indy will offer employment to the 460 employees in Catawba.
New-Indy Containerboard was formed in 2012 as a joint venture by the Massachusetts-based Kraft Group LLC and Indiana-based Schwarz Partners LP. The company, referencing its name, describes itself as the “NEWest, INDY-pendent manufacturer and supplier of recycled containerboard to the corrugated box industry.” Although just a few years old, the company also describes itself as having “owners and leadership with decades of experience,” which includes International Forest Products LLC chair (and New England Patriots football team owner) Robert Kraft.
The Catawba mill would join New-Indy facilities in Ontario and Oxnard, California; Hartford City and Kendallville, Indiana; and Peoria, Illinois.
A statement issued by New-Indy in early October indicates it is likely to make “additional investment[s] in its infrastructure [to] establish one of the most diverse and efficient mill operations in the industry.”
The company adds, “Going forward, we are excited about the prospects for this mill to produce a diverse array of products from existing offerings like market pulp, lightweight coated papers and specialty grades to new offerings of high-quality, virgin, ultra-lightweight linerboard. The Catawba Mill will position New-Indy to fill a significant void in the domestic and international markets for these products.”
Boston-based forest products information service provider RISI reports that New-Indy’s other facilities make recycled-content containerboard, so the Catawba mill may offer a way for the firm to diversify both its feedstock and its end product mix. RISI says the Catawba mill can make about 500,000 metric tons per year of pulp and about 340,000 metric tons of finished paper.
Yves Laflamme, president and CEO of Resolute, states, “This transaction will allow us to realize significant value for an asset whose greatest earnings potential lies with the investment in and diversification of the mill's operations, as proposed by New-Indy. We are pleased that the mill will continue to operate and benefit the local community, both economically and socially.”
Laflamme adds, “We expect to use the proceeds from this asset sale to further reduce our net debt and improve shareholder value. We will continue to explore high-return strategic opportunities to grow our core businesses in line with our transformation strategy.”