Displaying items by tag: Tembec

In response to UNIFOR Union Local 233's decision to go on strike effective as of 26th Nov, Tembec ceases the operations at its Temiscaming, Quebec industrial complex, which comprises four main facilities manufacturing specialty pulp, high-yield pulp, multi-ply coated bleached board and powder and liquid phenolic resins. In addition to the production interruption, the strike will delay the commissioning activities now taking place on the high-pressure boiler and turbine.

The work stoppage involves approximately 650 unionized employees out of the 850 employees working at the Temiscaming complex. Negotiations between Tembec and the union began in August 2014. The four-year collective agreement expired on September 30, 2014.

The Company is monitoring the situation very closely and is putting into place measures to minimize the impact on its customers.

Tembec is a manufacturer of forest products – lumber, pulp, paper and specialty cellulose – and a global leader in sustainable forest management practices. Principal operations are in Canada and France. Tembec has approximately 3,500 employees and annual sales of approximately $1.6 billion. Tembec is listed on the Toronto Stock Exchange (TMB).

Information:
Michel Dumas
Executive Vice President, Finance and Chief Financial Officer
Tel.: 819 627-4268
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Linda Coates
Vice President, Human Resources and Corporate Affairs
Tel.: 416 775-2819
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Richmond, B.C.-based Paper Excellence Canada Holdings Corporation ended months of speculation on Tuesday, March 26th by reaching an agreement to buy Tembec’s Skookumchuck pulp mill for $89 million.

The long-term search for a buyer will be complete once Paper Excellence completes a review of the northern bleached softwood kraft (NBSK) pulp mill’s various assets and liabilities.

“We’ve been in discussions in the past months,” Linda Coates, Tembec’s vice president of human resources and corporate affairs, told The Pioneer. “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.”

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

The Skookumchuck mill has 290 employees – 230 unionized workers and 60 staff — many of whom live in Canal Flats and other Columbia Valley communities. 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.

The transaction will likely close in late May or early June, and remains subject to certain conditions and regulatory approvals.

In recent years, Tembec sold its 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.

“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,” said Regional District of East Kootenay area F director Wendy Booth, whose area is home to several employees of the pulp mill.

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.

Tembec is proud to announce the official launch of FSC®-certified Kallima Coated Cover C2S 14 pt – the latest extension of its line of bleached paperboard products. This new product release stems from Tembec’s continuous investment into its research and development operations as well as a relentless focus on providing customers with superior quality products and solutions.

The new 14 pt caliper coated two-side substrate offers commercial printers yet another Kallima Coated Cover solution with superior printability, runnability and market renowned cost savings. Printers can benefit from savings of up to 20% over competing products due to Kallima’s basis weight advantage achieved through its unique high-bulk, low-density construction. Kallima’s on-press reliability, visual performance and savings potential make it an ideal choice for business cards, post cards, direct mail, POP displays, advertising collateral and pocket folders. “Kallima’s new light-weight C2S 14 pt coated cover grade will be particularly attractive for commercial printers whose business model involves a high volume of shipments of printed product to multiple locations. Due to Kallima’s light weight construction, printers will find significant savings on mailing and shipping fees alone,” highlighted Renee Yardley, Vice President, Sales and Marketing, Tembec Paper Group.

Kallima Coated Cover C2S 14 pt is available in rolls and sheets (skids only), and is fully compatible with post press production effects such as die cutting, UV and aqueous coating, folding, scoring, embossing, debossing and foil stamping. Kallima® Coated Cover 14 pt is FSC-certified and available with 10% recycled content upon request.

Tembec is currently taking pre-orders of Kallima Coated Cover C2S 14 pt for deliveries in late April, 2013.

Tembec Inc. has announced that it has reached an agreement to sell its NBSK pulp mill and related assets and liabilities located in Skookumchuck, British Columbia to Paper Excellence Canada Holdings Corporation (“Paper Excellence”) for a purchase price of $89 million, which includes working capital. Closing of the transaction is expected to occur in the second calendar quarter of 2013 and remains subject to certain conditions and regulatory approvals.

“This transaction supports the continuing transformation of the Company and the reshaping of its business portfolio,” stated Tembec President and CEO James Lopez.

Tembec acquired the Skookumchuck pulp mill in 1999 as part of the acquisition of Crestbrook Forest Industries Ltd. This mill, where 290 employees currently work, started up in 1968. Its pulp is shipped to North American and Asian customers primarily for tissue applications.

BofA Merrill Lynch served as the exclusive financial advisor to Tembec.

Tembec is announcing the departure of Executive Vice President, Specialty Cellulose and Chemical Group, Yvon Pelletier and is pleased to appoint Christian Ribeyrolle as Executive Vice President, Specialty Cellulose. Mr. Pelletier will leave the Company on February 22, 2013.

Mr. Ribeyrolle, who holds a chemical engineering degree from l’École Nationale Supérieure de Chimie de Clermont-Ferrand in France, has been with Tembec for ten years. He joined Tembec in 2003 as Manager of the pulp mill in Tartas, France, with an annual production capacity of 150,000 metric tons. In 2008, he was promoted to the position of Director of Sales, Specialty Cellulose, and in 2009, he became Senior Vice President, Specialty Cellulose, and President, Tembec SAS (France).

Under Mr. Ribeyrolle's leadership, Tembec has invested more than 50 million euros in the Tartas site, transforming its process and product mix. When he joined Tembec, specialty cellulose accounted for just 20% of production at Tartas. Today, the Tartas site manufactures 100% specialty cellulose and has become the Company’s best performing asset.

"Christian is a key member of Tembec's senior management team. He has led the transformation of the Tartas mill, making it a very profitable operation with a reputation that is recognized internationally in the specialty cellulose market. Christian's deep expertise, his more than 25 years experience in the industry, and his skills as a manager, have served to position Tembec among the global leaders in the specialty cellulose market. We are very pleased to count on his contribution to our executive team," said James Lopez, President and Chief Executive Officer of Tembec. "Christian has been a tremendous asset in the development of the specialty cellulose component of Tembec's business portfolio," he added. 

“I would like to take this opportunity to thank Yvon Pelletier for his 32 years of service and recognize his commitment to the Company during his tenure with Tembec. We wish Yvon well,” Mr. Lopez stated.

Consolidated sales for the three-month period ended September 29, 2012, were $443 million, as compared to $421 million in the comparable period of the prior year. The Company generated a net loss of $47 million or $0.47 per share in the September 2012 quarter compared to a net loss of $17 million or $0.17 per share in the September 2011 quarter. The most recent quarter results include a non-cash asset impairment charge of $50 million relating to the recently idled Chetwynd, British Columbia, pulp mill. Operating earnings before depreciation, amortization and other items (adjusted EBITDA) was $23 million for the three-month period ended September 29, 2012, as compared to adjusted EBITDA of $19 million a year ago and adjusted EBITDA of $27 million in the prior quarter.

For the fiscal year ended September 29, 2012, consolidated sales were $1.7 billion, unchanged from the prior year. The Company generated a net loss of $82 million or $0.82 per share compared to a net loss of $5 million or $0.05 per share in fiscal 2011. Adjusted EBITDA was $64 million compared to $98 million in the prior year.

Transition to IFRS

All financial information in this press release, including comparative figures pertaining to Tembec’s fiscal 2011 quarterly results, have been prepared in accordance with International Financial Reporting Standards (IFRS).

Business Segment Results

The Specialty Cellulose and Chemical Pulp segment generated adjusted EBITDA of $16 million on sales of $167 million for the quarter ended September 29, 2012, compared to adjusted EBITDA of $18 million on sales of $167 million in the prior quarter. Sales were relatively unchanged with lower prices offset by higher shipments. US dollar and euro prices for specialty grades and commodity viscose grades were relatively unchanged quarter-over-quarter. However, with the Canadian dollar strengthening by 1.2% versus the US dollar and by 4.0% versus the euro, Canadian dollar equivalent pricing declined by $4 million or $60 per tonne sold.

The specialty cellulose market conditions remained favourable. Specialty cellulose shipments were equal to 84% of capacity as compared to 80% in the prior quarter. The relatively low level of shipments in the June 2012 quarter was due to the annual maintenance shutdown at the Tartas mill, which lasted 11 days. A shorter four day planned maintenance outage also occurred at the Temiscaming facility. During the most recent quarter, the two specialty pulp mills had only 3.5 days of scheduled maintenance, including one day at the Tartas mill. The higher productivity at the latter facility reduced mill level cash costs, including the positive impact of the weaker euro, by $10 million. Overall, the two pulp mills generated $7 million more of adjusted EBITDA than in the prior quarter.

The market conditions for Northern Bleached Softwood Kraft (NBSK) pulp remained relatively weak. The benchmark price (delivered China) decreased by US $60 per tonne. Overall, realized Canadian dollar prices decreased by $50 per tonne, reducing adjusted EBITDA by $3 million. NBSK shipments were equal to 89% of capacity as compared to 91% in the prior quarter. During the most recent quarter, the Skookumchuck pulp mill proceeded with its planned annual maintenance shutdown, which lasted seven days. As a result, mill level costs increased by $7 million. Overall, adjusted EBITDA declined by $11 million.

The Paper segment generated adjusted EBITDA of $14 million on sales of $96 million for the quarter ended September 2012, compared to adjusted EBITDA of $9 million on sales of $86 million in the prior quarter. Higher coated bleached board and newsprint shipments caused the $10 million increase in sales. In terms of markets, coated bleached board was stable. Newsprint also remained stable despite continued weaker North American demand statistics. The US $ reference prices for coated bleached board declined by US $13 per short ton while the US $ reference price for newsprint was unchanged. Currency was slightly negative as the Canadian dollar averaged US $1.003, a 1.2% increase from US $0.991 in the prior quarter. The combined effect was a decrease of $3 million of adjusted EBITDA due to price. Coated bleached board shipments were equal to 111% of capacity as compared to 96% in the prior quarter. The shipment to capacity percentage for newsprint was 103%, compared to 87% in the prior quarter. Both mills saw improved productivity and also sold from inventory. The improved productivity led to a reduction in mill level costs of $5 million, primarily for energy and fixed cost absorption. The higher sales volume also led to higher adjusted EBITDA.
 
The High-Yield Pulp segment generated negative adjusted EBITDA of $9 million on sales of $100 million for the quarter ended September 29, 2012, compared to adjusted EBITDA of $5 million on sales of $101 million in the prior quarter. Market conditions for high-yield pulp remained weak in the most recent quarter. The US $ reference price for bleached eucalyptus kraft (BEK) decreased over the prior quarter by US $32 per tonne. When combined with a higher sales mix factor, high-yield pulp prices declined by $5 per tonne, reducing adjusted EBITDA by $1 million. High-yield pulp shipments were equal to 91% of capacity as compared to 89% in the prior quarter. During the most recent quarter, weak market conditions led to a production curtailment at the Chetwynd pulp mill for the last 30 days of the fiscal quarter. The mill remains indefinitely idled at time of writing and the Company has incurred a $50 million asset impairment charge to reduce the carrying values of the mill assets to estimated net recoverable amounts. The reduced productivity increased mill costs by $2 million over the prior quarter. In the September 2012 quarter, the lower selling prices led to a decrease of $3 million in the carrying values of finished goods and raw material inventories, decreasing adjusted EBITDA. This is the opposite of what occurred in the prior quarter when increased selling prices had led to an $8 million increase in the carrying values of finished goods and raw materials.

The Forest Products segment generated adjusted EBITDA of $8 million on sales of $108 million for the quarter ended September 29, 2012, compared to negative adjusted EBITDA of $2 million on sales of $86 million in the prior quarter. Sales increased by $22 million due primarily to higher shipments of lumber and sawmill by-products. Demand for SPF lumber improved with shipments equal to 70% of capacity, as compared to 59% in the prior quarter. US $ reference prices for random lumber increased by US $8 per mbf on average while stud lumber increased by US $7 per mbf. When combined with a higher sales mix factor, the net price effect was an increase in adjusted EBITDA of $3 million or $15 per mbf. Mill level manufacturing costs improved by $5 million. Costs are normally lower in the summer months and the sawmills also benefited from more continuous operations in the most recent quarter.

Outlook

Overall, the September 2012 quarterly results were in line with expectations, with improving lumber profitability offsetting the negative impact of difficult paper pulp markets. The Forest Products segment had its best quarter in several years, both in terms of lumber demand and prices. The summer months are also seasonally more productive and lower cost as well. Looking ahead, the normal seasonal decline in prices is anticipated in the December quarter. While the recent housing statistics in the United States are encouraging, we continue to forecast a slow and gradual recovery in housing, with lumber demand and prices following a similar pattern. The Specialty Cellulose and Chemical Pulp segment results were negatively impacted by currency as the Canadian dollar strengthened versus the US dollar and the euro. Market conditions for specialty cellulose were stable while those for NBSK pulp were very weak, with US $ pricing reaching “trough” levels. The annual mill-wide maintenance outage at the Skookumchuck pulp mill, which is the Company’s most expensive outage, also impacted the segment’s quarterly results. We anticipate a stable market for specialty and viscose pulps in the coming quarters. There are price increases announced for NBSK and they should be implemented. The adjusted EBITDA decline in the High-Yield Pulp segment was somewhat distorted by inventory adjustments. The prior quarter had benefited from an $8 million favourable adjustment to net realizable value inventory reserves as compared to a $3 million unfavourable adjustment in the September 2012 quarter. Absent the aforementioned adjustments, the decline in profitability was relatively modest and in line with expectations. Lower prices and the additional costs of idling the 240,000 tonnes per year Chetwynd, BC, mill led to the decline in High-Yield Pulp segment profitability. While price increases are being implemented, we expect market conditions for high-yield pulp to remain relatively weak. As well, future profitability will be enhanced as the Company will be operating its two lowest cost facilities going forward. The Paper segment had improved results due to good productivity and higher shipments. Stable paper markets are anticipated. However, profitability will be lower as the September 2012 quarter level of shipments is not sustainable. The Company continues with its capital expenditure program, with a strong emphasis on its two specialty cellulose mills. The cornerstone of the program is a $190 million high-pressure boiler and turbine to be installed at the Temiscaming, Quebec, site. The project will materially improve the mill’s cost structure and margins. A total of $59 million has been spent on the Temiscaming specialty cellulose project to the end of the September 2012 quarter. The Company also has several other smaller capital projects, which are either in start-up mode or nearing completion. These projects will begin to positively impact adjusted EBITDA in the coming quarters.

Tembec officially inaugurated today a new anaerobic treatment facility which will produce methane biogas and greatly reduce the use of fossil fuels at its high-yield pulp mill in Matane, Québec. Dignitaries from the surrounding region and members of Tembec’s senior management joined together with employees to inaugurate the new facility. This investment was announced January 10, 2011.

Funding for this investment was provided mainly by the Government of Canada with $19.7 million and the Government of Québec with $6.3 million. The overall project represents a total investment of $29 million - $26 million for the anaerobic facility and $3 million for the installation of the new electric boiler.

The project has two main components. The first is a new anaerobic treatment facility, which treats effluent and collects methane gas produced by the treatment process. This biogas will be used as fuel in the mill’s pulp-drying process, in place of the light oils currently used. The second component is the installation of a new electric boiler, which replaces a heavy oil fuelled boiler. These two initiatives together will reduce by approximately 90% the use of oil as fuel sources for the generation of the Matane mill’s various process steam and pulp drying requirements.

“This investment means better environmental, energy and economic performance for our Matane mill,” said James Lopez, President and Chief Executive Officer of Tembec. “By substantially reducing operating costs, this project will help assure the competitive position of our high-yield pulp on the global market.” “Tembec recognizes the support of the Government of Québec and the Government of Canada in the project, and we appreciate their confidence in helping us ensure the future of the mill,” added Mr. Lopez.

The Matane mill, which has 140 employees, exports its high-yield pulp to the United States, France, Italy, Spain, Germany, Korea and China.

Tembec has resumed its excavation activities at its site in Temiscaming following the discovery of human skulls. Excavation work is proceeding according to an archeological research permit issued by the Ministère de la Culture, des Communications et de la Condition féminine du Québec and are being conducted under the supervision of Montreal-based firm Arkéos, whose anthropologists are renowned experts.

“Tembec has taken the time to undertake a detailed research of the excavation site in order to fully understand its history and to be in a position to deal with this environment with due consideration. It is very important for us to make sure that we are taking the appropriate steps and establishing the right protocol to respond adequately to this given set of circumstances,” stated Randy Fournier, Senior Vice President, Temiscaming Operations. “We are taking every precaution to ensure that we work respectfully; should we make other discoveries, archeologists who are with us, on the premises, will be able to collect the objects immediately, assess the situation knowledgeably and enable us to pursue our work accordingly,” he added.

While excavating on May 15 for construction work to be done on the new boiler #10 as part of the investment project announced last March, items of concern were discovered. Tembec immediately informed the Quebec Provincial Police who secured the excavation site and proceeded with its investigation. Following the conclusion of this process, the Police determined that the human remains were historical and non-criminal in nature. Historical documents indicate that a church and a cemetery were located within the Temiscaming site as far back as 1891. The original industrial complex was built in 1917.

Arkéos was founded in 1981 and specializes in the fields of heritage and archeology. Its expertise lies in evaluating the impact of construction projects on archeological resources and ensuring that proper mitigation solutions are put in place.

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