Tembec's Louisiana mill up for sale

Pulp & Paper, Jan 2008

CORPORATE STRATECY

Tembec officially put its St. Francisville, LA, coated paper mill up for sale last month and added that the company overall was looking at selling non-core assets, cutting costs, refinancing or repaying debt and issuing new debt or equity to improve the firm's financial position, the Financial Post in Canada reported.

St. Francisville, the company's only coated paper mill, was indefinitely shut in July. At that time, a company executive told mill workers there was potential for eventually reopening the mill as exclusively a pulp producer.

Last month, Tembec said it had hired Jaakko Poyry Consulting to attract interest in the mill in two ways, either for an outright sale of the mill or for coupling Tembec with a joint venture partner to operate the mill operation, the Advocate News in Baton Rouge said.

To restart, the mill needs to convert to pulp or a lower quality paper product that can be profitable, a company executive said.

Others recently interested in the 1,500-acre mill property off the Mississippi River include a metal fabrication business, a firm that would make components for nuclear power plants, and the West Feliciana Port Commission that could use the property as a docking facility for a new port. About half of the 1,500-acre mill property is wetlands.

In 2006, Tembec said the former Crown Vantage mill lost more than $200 million since 2001 - or about $40 million/yr. The mill has continued to struggle last year with high costs, including for natural gas, the company official said.