Construction of a cellulose filament plant and optimization of the paper mill
MONTREAL, Jan. 15, 2020 /PRNewswire/ - Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) today announced the construction of a commercial plant specializing in the production of cellulose filaments, a new sustainable biomaterial derived from wood fiber, at its Kénogami paper mill in Quebec as well as the optimization of the mill, at a total cost of $38 million.
"Our investment in cellulose filaments represents an opportunity to enter into non-traditional growth markets," stated Yves Laflamme, president and chief executive officer, during a press conference attended by government representatives, local dignitaries and employees. "The cellulose filament and Kénogami mill optimization projects will create synergies within our network of operations in Saguenay‒Lac-Saint-Jean."
Cellulose filaments are derived from wood fiber that is mechanically processed without chemicals or enzymes. They are manufactured entirely from renewable sources, resulting in a low carbon footprint. Offering a wide variety of uses and a number of benefits, the filaments can be integrated into commercial and consumer products from many industries, including transportation, construction and energy, increasing the resistance and durability of those products.
The new $27 million project will create eight jobs in the startup phase slated for 2021, and a total of 23 jobs once the plant reaches its full production capacity of 21 metric tons per day. These new jobs will be in addition to the 200 existing positions at the paper mill.
Resolute will also invest $11 million to enhance the Kénogami paper mill's short-term competitiveness by modernizing equipment in order to produce high-grade SCA+ supercalendered paper, allowing the mill to access more favorable markets. The mill has a production capacity of 133,000 metric tons of specialty papers per year.
The cellulose filaments will be marketed with the help of Performance BioFilaments Inc., a joint venture established in 2014 by Resolute and Mercer International Inc. that is dedicated to the development of non-traditional applications for cellulose filaments. The extraction technology was developed by FPInnovations Inc., one of Canada's largest scientific forest product research and development centers, of which Resolute is a member.
The project will be funded in part by Quebec's Department of Forests, Wildlife and Parks ($2.5 million), Investissement Québec ($4.2 million) and Natural Resources Canada ($4.9 million).
Cautionary Statements Regarding Forward-Looking Information
Statements in this press release that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements regarding the investments in the Kénogami paper mill as well as the benefits and synergies expected from the investments. Forward-looking statements may be identified by the use of forward-looking terminology such as the words "will," "will be," "could," "may," "should," "believe," "project," "expect," and other terms with similar meaning indicating possible future events or potential impact on our business or our shareholders.
The reader is cautioned not to place undue reliance on these forward-looking statements, which are not guarantee of future performance. These statements are based on Resolute's management's current assumptions, beliefs, and expectations, all of which involve a number of business risks and uncertainties that could cause actual performance or outcomes to differ materially from those expressed or implied in this press release. The potential risks and uncertainties that could cause Resolute's actual future financial condition, results of operations and performance to differ materially from those expressed or implied in this press release include, but are not limited to, any inability to achieve or maintain the investments, benefits and synergies expected from the investments in the Kénogami mill, and the potential risks and uncertainties described under the heading "Risk Factors" in Part I, Item 1A of Resolute's annual report on Form 10-K for the year ended December 31, 2018.
All forward-looking statements in this press release are expressly qualified by the cautionary statements set out or referred to above and in Resolute's filings with the U.S. Securities and Exchange Commission and the Canadian securities regulatory authorities. Resolute disclaims any obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
About Resolute Forest Products
Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products, newsprint and specialty papers, which are marketed in close to 70 countries. The company owns or operates some 40 facilities, as well as power generation assets, in the United States and Canada. Resolute has third-party certified 100% of its managed woodlands to internationally recognized sustainable forest management standards. The shares of Resolute Forest Products trade under the stock symbol RFP on both the New York Stock Exchange and the Toronto Stock Exchange.
Resolute has received regional, North American and global recognition for its leadership in corporate social responsibility and sustainable development, as well as for its business practices. Visit www.resolutefp.com for more information.
SOURCE Resolute Forest Products Inc.