ASHLAND, Virginia (From news reports) -- Cascades Inc. says it is moving forward on converting its White Birch Bear Island paper mill in Ashland, Virginia, to a containerboard machine to produce lightweight, 100-percent-recycled linerboard and medium for the North American market.
Cascades initially acquired the Bear Island paper mill from Greenwich, Connecticut-based White Birch Paper in 2018 for $34.2 million. According to a news release from Cascades, the company says it plans to convert the mill to containerboard by the first quarter of 2021.
The total cost of the Bear Island conversion will be about $380 million, which includes the initial $35 million acquisition cost paid to White Birch Paper in 2018.
According to Cascades, the Bear Island mill will have an annual production capacity of about 465,000 tons and is scheduled to start up by the fourth quarter of 2022. It will operate at about 80 percent of capacity by the end of 2023, reaching 100 percent by the end of 2025.
"This investment, one of the largest in our company's history, is a decisive and very important strategic move in the modernization of our packaging assets," says Mario Plourde, president and CEO of Cascades. "By adding the Bear Island mill to our platform, more than 60 percent of our containerboard manufacturing capacity will be in the top quartile of the industry. In addition to offering a unique development platform, this plant will strengthen our geographic positioning and presence in the U.S. and will enhance the competitiveness of our asset base and our product offering regardless of economic conditions.
"From an operational standpoint, Bear Island will also optimize the flexibility of our manufacturing platform by providing a product offering that will be complementary to its sister plant Greenpac, located in Niagara Falls," Plourde adds. "Bear Island will also offer 100-percent-recycled products with light basis weights. Greatly valued by our current and future customers, these eco-responsible products are particularly well suited for e-commerce."
Charles Malo, president and chief operating officer at Cascades Containerboard Packaging, says the Bear Island mill "will be equipped with the latest technology and will be able to offer one of the lightest and high-end 100-percent-recycled containerboard products on the market."
Allan Hogg, vice president and chief financial officer at Cascades, adds that the company is "confident" it will reach its targeted leverage ratio by the end of 2023 for financing on this project. During the project development period, the company says it plans to limit capital investment to approximately $200 million annually, excluding the Bear Island project. The project will add about $190 million to this envelope in 2021 and $120 million in 2022.