Fortress Paper says dissolving pulp conversion project in Lebel-sur-Quevillon, Quebec, might not proceed as planned, considering JV, partnership in order to proceed; Thurso, Quebec, dissolving pulp mill expected to reach operational target

LOS ANGELES , May 14, 2013 () – Fortress Paper LLC is considering joint ventures or partnerships for its second dissolving mill conversion project in Lebel-sur-Quevillon, Quebec, noting that “there is no assurance” the mill will be completed as planned, according to Fortress Paper CEO Chad Wasilenkoff, Pulp & Paper Canada reported May 14.

The company’s Thurso, Quebec, dissolving mill project is proceeding as planned and is expected to reach its operational target of 200,000 tonnes per year, said Yvon Pelletier, the new president of Fortress Specialty Cellulose.

While Fortress Paper reported that dissolving pulp markets have done better during the first quarter of the year, the ongoing issue of oversupply remains a challenge.

The company said that the second mill project, otherwise known as the Fortress Global Cellulose (FGC) conversion project, would be difficult for it to take on completely, citing “changing economics and market conditions.”

Engineering design work for the FGC project is nearly completed, according to Wasilenkoff, reported Pulp & Paper Canada.

It estimated the project’s cost at C$250 million in addition to $70-$100 million used for working capital. The Thurso mill, which required the conversion from northern bleached softwood kraft (NBSK) pulp to dissolving pulp, incurred a conversion cost of $232 million.

Fortress Paper said that it would reach a decision on the FGC mill early in the third quarter, Pulp & Paper Canada reported.

Production issues with the digester and evaporator have continued at the Thurso mill, but the company believes it can reach ideal cost levels within 18 months despite lower-than-expected production rates in the first quarter of 2013.

A cogeneration project is in its commissioning and startup phase at the Thurso mill, and power generation is expected to begin by the end of the second quarter, Pulp & Paper Canada reported.

Fortress Paper’s first-quarter results showed a net loss of $12.4 million, while the dissolving pulp segment incurred an EBITDA loss of $8.7 million.

The primary source of this article is Pulp & Paper Canada, Toronto, Ontario, on May 14, 2013.

 

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