It’s a head office that is coming under foreign control, but in the fold of Paper Excellence, the opportunities for converting factories will probably be greater for Resolute Forest Products, believes Richard Garneau, former CEO of the largest forestry company. of Quebec.
Posted at 5:00 a.m.
Retired, the industry veteran, who spearheaded the relaunch of the forestry giant from 2011 to 2018 following its legal restructuring, is positive about the $2.7 billion transaction announced on July 6.
The main reason, according to Mr. Garneau? Paper Excellence is already considering a change of vocation for the newsprint mill — a sector in constant decline — of Resolute located in Gatineau. If the transaction obtains all necessary approvals, a feasibility study will be carried out for a possible conversion of the site to wrapping paper.
In cardboard, demand is growing. They will need kraft pulp to produce it, that of the Saint-Félicien and Thunder Bay mills [en Ontario]. If they are successful in Gatineau, that will extend the life of the other pulp mills.
Richard Garneau, former CEO of Resolute Forest Products
The feasibility study could take up to 24 months. Paper Excellence, a privately held company, is accomplishing this type of transformation in Tennessee as part of a $350 million project.
This company is based in British Columbia, but it is owned by Indonesian businessman Jackson Widjaja. This one comes from the family behind conglomerate Sinar Mas, whose pulp and paper division Asian Pulp and Paper (APP) is a global paper giant in Indonesia as well as China.
Last year, Paper Excellence also got its hands on Domtar – specializing in the production of cardboard and specialty papers – for around 3 billion US dollars after buying Catalyst Paper in 2019. During his long career, Mr. Garneau worked for the latter two companies.
Until now, Paper Excellence has not hesitated to loosen the purse strings to invest in its growth in the West. In Quebec, the company will also become the owner of the Kénogami plant (Saguenay), capable of producing cellulose filaments, which increase the durability of several materials.
PHOTO DAVID BOILY, LA PRESSE ARCHIVES
Logging industry veteran Richard Garneau, pictured here in 2014, led Resolute from 2011 to 2018.
A successful conversion in Gatineau could “eventually” raise hopes for the newsprint mills in Amos and Baie-Comeau, which have been closed since 2020, believes Mr. Garneau, taking care to add that it will be necessary to be patient.
“I insist on the word possibly, affirms the ex-big boss of Resolute in a telephone interview with The Press. Certainly not in the near future. »
A “false debate”
Given the weight of Resolute in the industry, its acquisition by a foreign player suggests control of the Quebec forest by interests located thousands of kilometers from Quebec. When questioned, Mr. Garneau believes that this is a “false debate”.
It’s attached to sawmills. Sawmills produce chips for pulp mills. It’s nice to be in Indonesia [APP]the wood is attached to the sawmills to supply the pulp mills.
Richard Garneau, former CEO of Resolute Forest Products
Resolute operates 15 sawmills in Quebec.
Professor in the department of wood and forest sciences at Université Laval, Luc LeBel agrees with the analysis of the transaction offered by Mr. Garneau.
PHOTO FROM LINKEDIN
Luc LeBel is a professor in the department of wood and forest sciences at Université Laval.
“The costs of converting factories are enormous,” he says. Resolute didn’t seem like they could make that kind of investment. An investor who has funds to make conversions is what we have here. »
Since Paper Excellence does not operate any sawmills in Quebec, Mr. LeBel is not overly concerned about the change in control. Sawing activities are “important” at Resolute and its buyer has “very little expertise in this sector”, underlines the professor. He expects Paper Excellence to rely on the expertise of Quebec society.
Tentative agreement ratified at Resolute
Unifor union members have just signed a 67% vote on their new four-year contract covering the eight Resolute Forest Products sawmills. The contract provides for significant increases in compensation, namely “adjustments” of $2.50 per hour upon ratification of the contract and $1.00 per hour as of the 1er May 2024 for trades workers. Production employees, for their part, will receive “adjustments” of $1.25 per hour upon ratification of the contract and $1.25 per hour as of the 1er May 2024. To these amounts must be added salary increases of 3% the first year, $1.30 per hour the second year, 3% the third year and $1.30 the fourth year. This contract, which later served as a model for Unifor to negotiate in other companies in the industry, concerned 1,000 workers in eight sawmills in Comtois, Girardville, La Doré, Maniwaki, Mistassini, Normandin, Saint-Thomas and des Outardes, in Baie Comeau.
The Canadian Press
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SOURCE : the press