Kruger Products to Invest $575 Million to Build a New Tissue Plant
Kruger Products to Invest $575 Million to Build a New Tissue Plant |
[16-August-2018] |
Company to implement a state-of-the-art paper machine in Québec SHERBROOKE, QC, Aug. 16, 2018 /CNW Telbec/ - KP Tissue Inc. ("KPT") (TSX: KPT) and Kruger Products L.P. ("Kruger Products or "KPLP") today announced its plan for a capital investment of $575 million in the Brompton area of Sherbrooke, Québec, to build a new, state-of-the-art tissue plant featuring Canada's largest and most modern through-air-dry (TAD) machine. The project will create more than 180 new jobs in the region. The announcement of this major project, supported by the Government of Québec, was made in the presence of Dominique Anglade, Quebec Deputy Premier, Minister of Economy, Science and Innovation and Minister of Québec's Digital Strategy, Luc Fortin, Québec Minister of Families and Minister Responsible for the Estrie Region, and Guy Hardy, MNA for Saint-François, as well as Dino Bianco, Chief Executive Officer, Kruger Products L.P., and Joseph Kruger II, Chairman and Chief Executive Officer, Kruger Inc. The new plant, which will be adjacent to an existing facility of the Kruger Group, will produce at maturity approximately 70,000 metric tonnes per annum of bathroom tissue and paper towels which will enable Kruger Products to increase its offering of ultra premium and innovative tissue products under the Cashmere®, SpongeTowels® and Purex® brands. The project is supported by the Government of Québec through Investissement Québec ("IQ"), which has agreed to invest $105 million by way of a convertible debenture. The remaining financing for the project is currently being finalized. "This project is on an unprecedented scale for Kruger Products and will give us the additional capacity to continue to grow our business into the future. This new facility combined with our Memphis TAD location will allow us to rebalance our ultra premium tissue capacity to better serve our customers across North America. The Brompton site will also be part of a critical manufacturing hub in the region, working with our other locations in Crabtree, Gatineau and Sherbrooke to produce great quality tissue products for our company" said Dino Bianco, Chief Executive Officer, Kruger Products." State-of-the-art Technology While Kruger Products has been operating a TAD machine at its Memphis, Tennessee plant since 2013, its TAD 2 machine will be the first of its kind in Québec. Significant Construction Project Anticipated Capital Structure for the Project Forward-Looking Statements Many factors could cause KPLP's actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail in the "Risk Factors – Risks Related to KPLP's Business" section of the KPT Annual Information Form dated March 9, 2018 available on SEDAR at www.sedar.com: Kruger Inc.'s influence over KPLP; KPLP's reliance on Kruger Inc.; consequences of an event of insolvency relating to Kruger Inc.; risks associated with the Memphis TAD machine; operational risks; Gatineau Plant land lease; significant increases in input costs; reduction in supply of fibre; increased pricing pressure and intense competition; KPLP's inability to innovate effectively; adverse economic conditions; dependence on key retail trade customers; damage to the reputation of KPLP or KPLP's brands; KPLP's sales being less than anticipated; KPLP's failure to implement its business and operating strategies; KPLP's obligation to make regular capital expenditures; KPLP's entering into unsuccessful acquisitions; KPLP's dependence on key personnel; KPLP's inability to retain its existing customers or obtain new customers; KPLP's loss of key suppliers; KPLP's failure to adequately protect its intellectual property rights; KPLP's reliance on third party intellectual property licenses; adverse litigation and other claims affecting KPLP; material expenditures due to comprehensive environmental regulation affecting KPLP's cash flow; KPLP's pension obligations are significant and can be materially higher than predicted if KPLP Management's underlying assumptions are incorrect; labour disputes adversely affecting KPLP's cost structure and KPLP's ability to run its plants; exchange rate and U.S. competitors; KPLP's inability to service all of its indebtedness; exposure to potential consumer product liability; covenant compliance; interest rate and refinancing risk; and risks relating to information technology, cyber-security, insurance, internal controls, and trade. Readers should not place undue reliance on forward-looking statements made herein. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information contained herein is made as of the date of press release, and KPLP undertakes no obligation to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws. About KP Tissue Inc. About Kruger Products L.P. About Kruger Inc.
SOURCE Kruger Inc. | ||
Company Codes: Toronto:KPT |
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