Cascades Invests in the Construction of a State of the Art Containerboard Mill in New York State
KINGSEY FALLS, QC, June 27, 2011 /PRNewswire/ – Cascades Inc. (TSX:
CAS), a leader in the recovery of recyclable materials and the
production of green packaging and tissue paper products, announces that
its Norampac division will invest in Greenpac Mill LLC (Greenpac), a
corporation created with the Caisse de d©pot et placement du Qu©bec
(the Caisse), Jamestown Container and one other industry partner, for
the purpose of constructing and operating a state of the art
containerboard mill to be located in New York State.
The Greenpac mill will be constructed for a total cost of US$430 million
on property located adjacent to an existing Norampac facility in
Niagara Falls, NY. Greenpac will manufacture a light weight linerboard,
made with 100% recycled fibres, on a single machine having a width of
328 inches (8.33 meters) with an annual production capacity of 540,000
short tons. This machine will be one of the largest of its kind in
“The investment that we are announcing today is the result of the
combined efforts of Cascades and its partners, and is consistent with
our development strategy which aims to position the Company amongst the
leaders in terms of productivity and profitability in the packaging and
tissue sectors”, declared Alain Lemaire, President and Chief Executive
Officer of Cascades. “As we have stated in the past, we strongly
believe that Cascades’ future success will be dependent on our ability
to offer high performance innovative products which will better meet
the needs of our customers, at a cost that will be amongst the lowest
in the industry.”
“Moreover, the innovative structure of this partnership will allow us to
reach this objective while maintaining the financial flexibility
achieved through recent divestitures”, added Mr. Lemaire. “We are also
confident in regards to industry’s mid and long-term perspectives, and
we strongly believe that Greenpac will contribute positively to our net
profitability once full ramp-up is achieved.”
“The Greenpac mill will include numerous technological advances, making
it a unique project of its kind in North America. In particular, the
linerboard that will be produced on the new machine will be able to
achieve optimal strength while maintaining a low basis weight thereby
allowing our customers to better respond to the growing trend towards
lightweight packaging”, declared Marc-Andr© D©pin, President and Chief
Executive Officer of Norampac.
Moreover, the building and the machinery will be designed for optimal
energy efficiency and many operations will be automated. Also, process
water will be treated and reused in order to reduce consumption as much
as possible, and the state of the art management system for recycled
fibres will have a positive effect on the environmental performance of
The paper machine will be manufactured by Metso, Voith will provide the
stock preparation equipment and anaerobic effluent treatment plant, and
Siemens will provide the power and control technology. In commenting on
the equipment suppliers, Mr. D©pin stated: “We are pleased to be able
to count on the contribution of global leading partners who, through
their knowledge and expertise, will contribute to the success of the
Fibre supply will be carried out by Cascades and its recovery
operations. Sources of old corrugated containers (“OCC”) are numerous
and significant in the region where the mill will be built, which will
impact favourably Greenpac’s raw material procurement. With regards to
sales, customers have already been secured for more than 80% (435,000
short tons) of production, Norampac converting operations will purchase
170,000 short tons (39%) of this production.
Financing and Partnership
The US$430 million cost of the project will be financed by a US$140
million equity investment in Greenpac of, which US$83.6 million (59.7%)
will be invested by Cascades, US$28.3 million (20.2%) will be invested
by the Caisse, and US$28.1 million (20.1%) will be invested by
Jamestown Container and another industry partner. The remainder of the
financing will be in the form of debt, including senior debt in the
amount of US$228.9 million, which was led by GE Capital, and
subordinated debt in the amount of US$61 million. Senior debt will be
provided by an international banking syndicate managed by GE Capital.
The subordinated debt will be provided by the Caisse (US$45.75 million)
and Cascades (US$15.25 million), and will serve to bridge expected
refundable tax credits. Greenpac’s debt will be without recourse to
Cascades and will have a 10-year maturity. Norampac will assume
responsibility for managing day-to-day operations of Greenpac.
With regards to the financial impact on Cascades, Greenpac’s results
will be included in the share of results of associates and joint
ventures in the statements of earnings.
Economic Development and Construction
The construction of the mill will create 108 new jobs in the State of
New York, as well as contribute to the economical development of the
region. “Norampac’s decision to build a new manufacturing facility in
Niagara Falls secures its presence in New York State and reinforces
Governor’s Cuomo’s message that New York is open for business” said
Empire State Development President, CEO & Commissioner Kenneth Adams.
“I applaud all the state and local partners involved with this
project. This is yet another example of how the private sector and our
economic development partners can work together to create good jobs in
New York State”.
MiniMill Technologies, Inc. (MMT) has been retained to support Norampac
and partners in the project management. The MMT team includes
experienced employees who worked on many significant projects whose
total costs amount to almost US$3 billion. The construction will begin
in July 2011 and the start-up is planned for the summer of 2013.
In closing Mr. Lemaire stated: “Cascades wishes to thank its partners
and other participants, including GE Capital and the members of the
banking syndicate, the Caisse de d©pot et placement du Qu©bec, the
State of New York, the Empire State Development, the city of Niagara
Falls, the Niagara County Development Agency, the New York Power
Authority as well as the New York Department of Environmental
Conservation for their significant contribution to the project.” “We
also wish to underline the exceptional work of the entire Norampac and
Cascades team who has committed countless hours to this project over
the past several months”, added Marc-Andr© D©pin.
Conference Call and Presentation
For further information on the Greenpac project, Cascades invites
financial analysts and investors to attend a conference call on June
27, 2011 at 10:00 a.m. or p.m. EST (Eastern Standard Time).
Dial-in number: 1-800-731-5319 Replay: 1-877-289-8525 access code: 4451786# Until July 4, 2011
Media and other interested individuals are invited to listen to the live
or deferred broadcast on Cascades’ corporate website at www.cascades.com. Also, please consult the investor presentation available at www.cascades.com/investors.
Founded in 1964, Cascades produces, converts and markets packaging and
tissue products that are composed mainly of recycled fibres. The
Company employs more than 11,000 employees, who work in more than 100
units located in North America and Europe. Its management philosophy,
its more than 45 years of experience in recycling and its continued
efforts in research and development are strengths that enable Cascades
to create new products for its customers. Cascades’ shares trade on the
Toronto Stock Exchange, under the ticker symbol CAS.
SOURCE CASCADES INC.