Cascades plans to convert the currently idled newsprint machine to a first quartile containerboard machine
Packaging solutions provider Cascades has announced its decision to move ahead with the $380m conversion of the Bear Island newsprint paper mill located in Virginia.
The Bear Island newsprint manufacturing facility was purchased by Cascades in 2018 from White Birch Papers for $34.2m.
Subject to securing final permits, Cascades plans to convert the currently idled newsprint machine to a first quartile containerboard machine with an anticipated annual production capacity of 465,000 short tonnes
Planned to be commissioned in 2021, the converted containerboard machine will have the capacity to produce high-quality, lightweight, 100% recycled linerboard and medium for the North American market.
Cascades president and CEO Mario Plourde said: “This investment, one of the largest in our Company’s history, is a decisive and very important strategic move in the modernization of our packaging assets.
“By adding the Bear Island mill to our platform, more than 60% of our containerboard manufacturing capacity will be in the top quartile of the industry.
“In addition to offering a unique development platform, this plant will strengthen our geographic positioning and presence in the U.S. and will enhance the competitiveness of our asset base and our product offering regardless of economic conditions.”
Cascades signs deal to finance equity portion of paper mill project
Additionally, Cascades has signed an agreement with CIBC Capital Markets, RBC Capital Markets and BMO Capital Markets, on behalf of a syndicate of underwriters, to finance the equity portion of the project.
Under the terms of the agreement, Cascades will issue 7,441,000 common shares and the underwriters will purchase at a price of $16.80 per Common Share for gross proceeds of approximately C$125m ($94.1m).
By the end of 2023, the Bear Island mill project will operate at approximately 80% of capacity and will reach 100% by the end of 2025.
Plourde added: “From an operational standpoint, Bear Island will also optimize the flexibility of our manufacturing platform by providing a product offering that will be complementary to its sister plant Greenpac, located in Niagara Falls (NY).”