Domtar Corp. has announced an agreement with Paper Excellence Canada Holdings Corporation for the sale of its Prince Albert, Saskatchewan, assets.
Paper Excellence will convert the former pulp and paper mill to the production of dissolving pulp, a product intended for the viscose textile market.
The transaction is expected to close in the second quarter of 2011, but is contingent on a few conditions. Paper Excellence and the government of Saskatchewan must reach agreement on fibre allocation, the purchase of excess power, and the division of responsibilities between the government and the buyer for past environmental liabilities. Also, the buyer must negotiate a new collective agreement with the local labour union.
According to a statement from the government of Saskatchewan, Paper Excellence will be investing more than $200 million in the conversion of the mill and creating hundreds of construction jobs in addition to the projected 200 mill jobs. The conversion is expected to take between 18 and 24 months to complete.
The Prince Albert mill was permanently closed in the second quarter of 2006 and has not been operated since. Domtar acquired the assets in 2007 as part of a transaction with Weyerhaeuser Company. Domtar completed the dismantling of the mill's paper machine and converting equipment in 2008.
The pulp mill portion of the facility was built in 1966. At the time it was shut down in 2006 it had an annual capacity of 145,000 t/y of bleached softwood and hardwood kraft pulp.
Based in the Netherlands, Paper Excellence also owns Meadow Lake Mechanical Pulp (BCTMP) in Saskatchewan and two mills in B.C., Mackenzie Pulp Mill (kraft pulp) and Howe Sound Pulp & Paper (kraft, TMP and newsprint).