Tembec sells Skookumchuck mill to B.C. company

Richmond-based subsidiary of Asian Pulp and Paper to assume ownership by late spring

After a long-term search for a buyer, Tembec’s northern bleached softwood kraft (NBSK) pulp mill in Skookumchuck is poised to fall under new ownership.

Richmond, B.C.-based Paper Excellence Canada Holdings Corporation reached an agreement to buy the Tembec mill, and its related assets and liabilities, for $89 million on Tuesday, March 26th.

“We’ve been in discussions in the past months,” Linda Coates, Tembec’s vice president of human resources and corporate affairs, told The Valley Echo. “They have more mills in the NBSK side; they have a stronger position in the market than we did because we only have one of those mills in our portfolio.”

The Skookumchuck mill has 290 employees – 230 unionized workers and 60 staff — many of whom live in Canal Flats and other Columbia Valley communities found between Invermere and Cranbrook. Paper Excellence is expected to continue to “substantially offer the same conditions of employment to the staff; the labour agreement is part of the transaction, so Paper Excellence is bound by this agreement,” said Ms. Coates.

“It’s been known it’s been for sale for a number of years, so if the buyer and seller have come to an agreement, that’s a good thing,” added Regional District of East Kootenay area F director Wendy Booth, whose area is home to several employees of the pulp mill.

Paper Excellence’s parent company, Asian Pulp and Paper, is headquartered in Jakarta, Indonesia, and own five other pulp mills in Canada: in Mackenzie and Port Mellon in B.C., in Meadow Lake and Prince Albert in Saskatchewan, and in Pictou, Nova Scotia.

In recent years, Tembec sold it’s Canal Flats and Radium Hot Springs mills to Canfor. Ms. Coates did not offer comment as to whether Canfor was also in the running to buy the Skookumchuck mill.

The transaction is expected to close in the second quarter of 2013, likely in late May or early June, and remains subject to certain conditions and regulatory approvals.

Tembec acquired the Skookumchuck pulp mill in 1999 as part of the acquisition of Crestbrook Forest Industries Ltd. The mill initially started up in 1968. Its pulp is shipped to North American and Asian customers primarily for tissue applications.

The Skookumchuck pulp mill has the capacity to produce about 250,000 tonnes per year of NBSK pulp, and has been producing close to that capacity in recent years, said Ms. Coates.

Tembec is a manufacturer of forest products — lumber, pulp, paper and specialty cellulose — and a global leader in sustainable forest management practices. Its principal operations are in Canada and France, and the company has 3,700 employees and annual sales of approximately $2 billion.