Wood supply key to mill restart: Investors group approaches Resolute Forest Products about reviving northwest plant.

Author:Ross, Ian
Position::Forestry
 
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Gaining access to Crown fibre will be a key issue for a potential buyer of the idled Fort Frances pulp and paper mill.

Repap Resources Group notified Resolute Forest Products in mid-December of its intentions to enter into negotiations to acquire its northwestern Ontario mill. The private Canadian and U.S. investors group wants to restart the plant and introduce a new mix of products in 2019.

"This is a sophisticated group of investors that includes folks with long histories in the forestry and paper industry, including a specific knowledge of this mill," said Tannis Drysdale, the town's economic development consultant, in a phone interview.

"I have every confidence that they understand what it will take to open up the mill."

Repap is a private consortium of investors with more than 180 years of combined managerial experience in purchasing and revitalizing closed pulp and paper mill assets. The group is partnering with 4Front Capital Partners, a Toronto investment bank.

"They have looked at other idle paper mills in North America and I know the attractive feature of the Fort Frances mill is the local fibre matches well with the product that they intend to make," said Drysdale.

Repap's proposed plans are to produce packaging grades--sack kraft papers--in Fort Frances, such as cement bags and heavy grocery paper bags, the latter following a growing consumer trend to curtail the use of non-recyclable plastic shopping bags.

"The market is actually growing for that type of product," said Drysdale.

Should Repap acquire the property and restart the mill, 263 jobs could be created.

Rather than keep Repap's interest under wraps, newly elected Fort Frances Mayor June Caul and the municipality decided to make it public on Dec. 13 in an effort to spur Resolute into making a deal and to convince the province to "step up to the plate" and help get the mill reopened.

"The possibility's always been in our minds, hoping that someone would come through and be interested in buying it.

"Hopefully it will make a difference with Resolute. It's either going to get them moving or make them unhappy with us."

The Fort Frances mill operated for 100 years until Resolute finally pulled the plug on the previously closed operation in 2014, declaring it not economically viable.

The closure dealt a major blow to the one-industry town of 7,700 and permanently placed 250 people out of work. The loss to the community of its largest private employer has been offset somewhat by...

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