Wednesday, 13 October 2010 11:30

Fortress Paper Announces Entering Into Additional Dissolving Pulp Supply Agreement

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Fortress Paper Ltd. announces that it has increased the purchase commitments for its dissolving pulp to an aggregate of 156,000 air dried metric tonnes (“ADMT”) per annum representing approximately 78% of the Fortress Specialty Cellulose Mill’s planned annual production capacity.

Fortress Paper, through a wholly-owned subsidiary, entered into a dissolving pulp supply agreement with an additional producer of viscose fibre (rayon) products located in China, for the delivery of approximately 72,000 ADMT of dissolving pulp per annum at a purchase price based on a formula that factors in the prevailing market price of viscose staple fibre in China, subject to minimum pricing terms and no maximum purchase price. The pulp supply agreement is for a term of ten years, with Fortress commencing the supply of dissolving pulp in the third quarter of 2011.

The Company also announces that it has issued 400,000 common shares upon the partial conversion by Solidarity Fund QFL (Fonds de solidarite FTQ) (the “Fonds”) of $8,000,000 principal amount of its $15,000,000 unsecured convertible debenture that was issued on April 30, 2010.

Chadwick Wasilenkoff, Fortress Paper’s Chief Executive Officer, commented: “We are very pleased to be working with Solidarity Fund QFL (Fonds de solidarite FTQ) on this exciting project in the Province of Quebec where they are playing an important role in the Thurso project by providing early-stage capital to Fortress Paper. I would like to thank the Fonds for their support and I would welcome the opportunity to partner with them again in the future.”

“We were pleased to partner with Fortress Paper earlier this year. The Company’s turnaround plan is well underway. The Thurso plant is already running at a good pace, having called back some 300 employees,” said Gaetan Morin, Executive Vice-President, Investments, at Solidarity Fund QFL (Fonds de solidarite FTQ).

About Fortress Paper

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress operates three mills, the Landqart Mill located in Switzerland, the Dresden Mill located in Germany and the Fortress Specialty Cellulose Mill located in Quebec, Canada. Fortress Paper’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. Fortress Paper’s pulp business includes NBHK produced at the Fortress Specialty Cellulose Mill with plans to convert this capacity into dissolving pulp production along with the construction of a biomass based cogeneration plant.

Read 3449 times Last modified on Wednesday, 13 October 2010 09:04