Tembec sells Skookumchuck mill

Vancouver-based Paper Excellence group buys East Kootenay pulp mill for $89 million

The Skookumchuck pulp mill

The Skookumchuck pulp mill

The Skookumchuck pulp mill will change ownership within the next three months.

Tembec reached an agreement on Tuesday, March 26 with Vancouver-based Paper Excellence Canada to sell the Northern bleached softwood kraft (NBSK) pulp mill and its related assets and liabilities for $89 million, including working capital.

There are 290 people working at the pulp mill.

Skookumchuck was the last mill Tembec operated in the East Kootenay, after it closed its Cranbrook planer mill in 2010, and sold the Canal Flats and Elko mills to Canfor in 2011.

The sale is expected to be finalized in the second quarter of 2013.

“This transaction supports the continuing transformation of the company and the reshaping of its business portfolio,” said Tembec’s CEO James Lopez.

The Skookumchuck pulp mill was established in 1968 by Crestbrook Forest Industries. Tembec purchased Crestbrook’s mills in 1999.

Paper Excellence Canada is a privately owned group of companies based in Vancouver. It now owns six mills in Canada: in B.C., as well as Skookumchuck, it owns mills in Howe Sound and Mackenzie. It owns two mills in Saskatchewan: Meadow Lake and Prince Albert. It has one in Abercrombie, Nova Scotia. Outside Canada, it has two mills in France and one in Germany.

Paper Excellence has the capacity to produce close to two million tonnes of pulp and 550,000 tonnes of paper, and it employs about 2,000 people.

The 290 employees of Skookumchuck pulp mill are represented by Pulp, Paper and Woodworkers of Canada Local 15. President Michael Scott said, while it is early days, the sale should not disrupt working conditions too greatly for its members.

“We have a contract that moves with the new company. Other than the name on the contract, there is no change to our benefits, wages, health and welfare package and pensions,” said Scott.

He said there is a skills shortage at the pulp mill at the moment, and that situation won’t change with a new owner.

Paper Excellence has made investments at its other Canadian mills, which is a positive sign, according to Scott.

“It doesn’t look like they have bought us just for fiber supply,” he said, adding that the chip supply agreement with Canfor will continue as it is part of the sale.