Cascades Inc. has acquired the White Birch, Bear Island manufacturing facility in Virginia 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. During the period prior to the conversion, White Birch will temporarily operate the site as a newsprint mill, under a 27-month lease.
The new machine is expected to have an annual production capacity of 400,000 tons and construction costs on a per ton basis that are 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.
Mario Plourde, CEO of Cascades, stated, “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.”
