Investments of $21 million and recall of 300 workers
PARENT, QC, May 13 /CNW Telbec/ - Kruger Publication Papers Inc. (KPPI)
and Industries Perron today announced the formation of a partnership to
create a new commercial entity that will manufacture value-added lumber
products. The announcement was made in the presence of Julie Boulet,
Minister of Employment and Social Solidarity and Minister Responsible
for the Mauricie Region. Under the agreement, the assets of Kruger's
sawmill in Parent and those of Perron's finger-joint mill in
Trois-Rivières will be merged, and $21 million will be invested to
upgrade equipment and start up operations at both mills, which had been
closed for more than a year and a half. The investment includes a
$12.75-million loan from Investissement Québec and a $5.5-million loan
from the Business Development Bank of Canada. This partnership will see
about 300 employees return to work: 90 at the Parent Sawmill, 40 at the
Trois-Rivières mill, and some 170 loggers and forest planning
"Given the challenging environment in which the Québec forest industry
is operating, we are very pleased to enter into this partnership which
constitutes a new business model and will optimize production at both
mills. Since our operations complement each other and are spread
optimally over both sites, production will resume at both lumber mills
and 300 employees will be called back to work," said Daniel
Archambault, Executive Vice President and Chief Operating Officer,
Industrial Products Division of Kruger Inc.
In preparation for restarting the Parent sawmill at the end of July 2011
and the Trois-Rivières Mill in August 2011, logging operations will
resume in June, in order to build up enough inventory to supply the
production line. Both mills will then share primary and secondary
processing activities up to and including finished products. The logs
will be sawn and dried at the Parent Mill, after which they will be
transported to the Trois-Rivières Mill to be planed and turned into
lumber of varying lengths and finger-jointed lumber. The products will
then be shipped to markets across North America.
The new company has also secured an asset-based loan of $8.5 million
from the Royal Bank of Canada for the operating working capital.
The new commercial entity will be headed up by Claude Perron, who will
act as Chairman and Chief Executive Officer, while all forest
management, certification and logging activities will be coordinated by
"In short, performance of the Parent sawmill will be optimized,
production will be geared to demand, fibre use will be maximized with
finger-jointing, and product lines will be expanded to break into new
markets in Canada and the United States. Our unique business model
capitalizes on the complementarity of our activities and targeted
markets in order to protect against fluctuations in the Canadian
dollar," Claude Perron concluded.
About Industries Perron
Founded in 1999, Industries Perron became a leading manufacturer of
finger-jointed products and went on to produce studs for the US market.
In 2003, Industries Perron was one of the top two finger-jointed stud
mills in North America.
Founded in 1904, Kruger Inc. is a major producer of publication papers,
tissue, lumber and other wood products, corrugated cartons from
recycled fibres, green and renewable energy and wines and spirits. The
Company is also a leader in paper and paperboard recycling in North
America. Kruger operates facilities in Québec, Ontario, British
Columbia, Newfoundland and Labrador and the United States.
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SOURCE KRUGER INC.
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