March 28, 2023

Definitive plans to sell Thunder Bay pulp and paper mill

The company says it is necessary and depends on Domtar’s announced acquisition.

THUNDER BAY – Resolute Forest Products says it plans to sell its Thunder Bay pulp and paper mill.

Seth Kursman, the company’s vice president of corporate communications, sustainability and governance, called the plant an extraordinary asset and added that bringing it to market was not an easy decision.

“It’s a very difficult decision,” Kursman said, reached by phone by CKPR Radio. “Thunder Bay has been the cornerstone of Resolute, and even Resolute’s future growth plan… Starting the sales process is a very difficult thing. We believe it’s necessary, but that doesn’t make it any easier.

“The Thunder Bay plant is attracting a lot of interest from a number of buyers. It has on-site power generation. First of all, it has an amazing workforce, a really positive business environment, and I don’t mean just a job.”

Kursman called the factory great, for example, for the operation of the circular bioeconomy.

The deal was necessitated by the sale of Resolute Forest Products to Paper Excellence Group, which also bought Domtar in 2021.

“It’s really hard for us to let go of such a great factory. Our plans were to invest a lot of money in that facility, make it even better, strengthen it and make it more competitive for generations to come.” Kursman said. “We definitely believe that the plant will attract a lot of investment from interested parties, we hope those with good pockets and who are able to invest, because the potential of the plant is huge.”

Kursman did not say whether any potential buyers were present.

Gary Bragnalo, northern regional director of Unifor, the union that represents about 430 workers at the Thunder Bay plant, said he was caught off guard by the sale announcement.

Bragnalo said he and his membership believed they were part of the deal, which is expected to be completed in the next few days. It has opened up unknowns that remain up in the air at the moment, he said.

“We’re a good resource, but it leaves our members with a bunch of questions. I’ve talked to some of them. Tree sharing and tree rights? What’s going on with that. Sawmills are also going to stay with Resolute, which is based out of Quebec, but they’re all tied together right now. It’s all so intertwined together with fiber.”

Bragnalo said he believes a buyer will be found. Buyers are expected to tour the plant in the coming weeks and months, as well as Domtar-owned plants in Dryden and Espanola, Ont.

If it can’t be sold, he’s unsure what that means for the future of the plant. However, he added that he does not think the situation is the same as in 2008, at the worst of the forest crisis, when no one wanted to buy the plant owned by Bowater at the time.

“No. 1, we want to know what’s going to happen to Thunder Bay,” Bragnalo said. “And to be viable in the future. We know that timber rights always followed the mill. So what happens to that? If you don’t have timber rights, what do you do? If you don’t have access to fiber, it’s not good.”

Paper Excellence Group Vice President and Chief Strategy Officer Patrick Loulou said the sale is part of their takeover bid.

“Today’s announcement is a clear demonstration of our commitment to complete the acquisition of Resolute on time,” Loulou said in a statement.

It was not an easy decision, added Remi Lalonde, President and CEO of Resolute.

“This is a very difficult matter, but we believe it is necessary to accelerate our strategic merger with Paper Excellence Group,” Lalonde said.

“The plant is an exceptional asset. I am confident that Thunder Bay’s dedicated and talented team will have a prosperous future with any company fortunate enough to have them as part of their organization.”

The sale of the Thunder Bay pulp and paper mill is dependent on the completion of Domtar’s announced acquisition of Resolute and the receipt of applicable regulatory approvals. Domtar’s acquisition of Resolute is still expected in the first half of 2023, subject to shareholder and regulatory approvals and other customary closing conditions, the receipt of which remains open.

This is a developing story and will be updated as more information becomes available.

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