Kruger aban­dons newsprint pro­duc­tion

Sherbrooke Record - - FRONT PAGE -

The Kruger paper mill in Bromp­ton is aban­don­ing the pro­duc­tion of newsprint to con­cen­trate on more spe­cial­ized paper in a move that should main­tain its 248 jobs. In an agree­ment with the Que­bec gov­ern­ment, the com­pany also hopes to pre­serve some 328 jobs at its Wayaga­mack mill in Trois Rivières.

The long-term de­cline in sales of news­pa­pers and magazines has forced Kruger turn to al­ter­na­tive prod­ucts with grow­ing de­mand, but not with­out con­sid­er­able gov­ern­ment sup­port.

The an­nounce­ment was made on Fri­day in the pres­ence of Premier Philippe Couil­lard and sev­eral mem­bers of his cabi­net. To­tal in­vest­ment of $107.5 mil­lion will be in­jected to di­ver­sify

pro­duc­tion at both plants. The pa­per­maker will then con­sol­i­date the as­sets of the two plants to cre­ate a new en­tity, Spe­cialty Pa­pers Kruger Hold­ing Inc., into which Québec will in­vest $44.6 mil­lion and to be­come a 37.5 per cent share­holder. In­vestisse­ment Québec will also add loans and a loan guar­an­tees to­talling just un­der $60 mil­lion. The new en­tity also in­cludes the biomass co­gen­er­a­tion plant ad­ja­cent to the Bromp­ton plant. In all, the deal rep­re­sents in­vest­ments of over $377 mil­lion.

“This is an ex­tra­or­di­nary ex­am­ple of in­dus­trial trans­for­ma­tion,” said Couil­lard. “The fu­ture is not rosy for newsprint and now is the time to change prod­ucts. Kruger has made the right de­ci­sion.

“I don’t think we’re go­ing to talk about un­em­ploy­ment in the East­ern Town­ships; rather, we are talk­ing about a short­age of skilled labour.”

Spe­cialty Pa­pers Kruger Hold­ing S.E.C. will in­vest over the next three years to en­sure the tran­si­tion, par­tic­u­larly with re­gard to the pur­chase of new pro­duc­tion equip­ment and the mod­i­fi­ca­tion of ex­ist­ing equip­ment.

“Québec, and par­tic­u­larly the Es­trie re­gion, has the re­sources and en­ergy to be a leader in in­no­va­tion in our forestry in­dus­try,” the premier added. “As such, Kruger’s in­vest­ments at the Bromp­ton plant are an in­spir­ing ex­am­ple of the in­te­gra­tion of in­no­va­tive tech­nol­ogy that will cer­tainly en­able Que­bec to be­come a ma­jor player in the spe­cial­ized paper man­u­fac­tur­ing sec­tor.”

“The trans­for­ma­tion of the pro­duc­tion will be done over a pe­riod of three years and we will in­tro­duce our new prod­ucts grad­u­ally,” added Kruger’s print di­vi­sion COO François D’amours. “We want to get out of the newsprint in­dus­try com­pletely within three years.”

“Kruger was once a ma­jor pro­ducer of newsprint and paper for pub­li­ca­tion, but we started a process of di­ver­si­fi­ca­tion sev­eral years ago. For ex­am­ple, we will pro­duce fat-re­sis­tant wrap­ping paper which is used in par­tic­u­lar to pack ham­burg­ers in fast food chains. This is a grow­ing sec­tor. “

In ad­di­tion to food pack­ag­ing, the plant will be­gin pro­duc­ing la­bel­ing prod­ucts and coated pa­pers for dig­i­tal print­ing on inkjet presses, which is used in par­tic­u­lar for large-for­mat cat­a­logues and cir­cu­lars for tar­geted di­rect mail.

Kruger Pres­i­dent Joseph Kruger wel­comed the an­nounce­ment with en­thu­si­asm. “Stop­ping the pro­duc­tion of newsprint is good news for the in­dus­try,” said Pres­i­dent Joseph Kruger, “This will al­low re­main­ing plants to re­main open longer.”

The pro­duc­tion trans­for­ma­tion will also have pe­riph­eral spin-offs as it in­volves an ad­di­tional an­nual sup­ply of 100,000 met­ric tons of wood chips, which will have a di­rect pos­i­tive im­pact on sawmills.

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