Kruger Products successfully starts up TAD tissue plant in Sherbrooke and announces $240 million expansion project

KP Tissue Inc. (“KPT”) (TSX: KPT) and Kruger Products L.P. (“KPLP”) today announced the completion of construction and successful start-up of their state-of-the-art Sherbrooke manufacturing facility featuring Canada’s largest and most modern through-air-dry (TAD) tissue machine. The new facility also comprises three converting lines which have been successfully commissioned.

“I congratulate everyone involved in building our new Sherbrooke Plant,” said Dino Bianco, CEO of Kruger Products. “Considering the circumstances of the pandemic, it was an incredible feat to complete this massive project on time and on budget. It makes me very proud to be part of this organization and to be surrounded by dedicated and resourceful people who thrive on innovation and are committed to excellence. On behalf of the entire Kruger Products team, I would like to extend a warm welcome and congratulations to the 180 new employees who have joined our team.”

At maturity, the TAD tissue machine will increase the Company’s annual output by approximately 70,000 metric tonnes of bathroom tissue and paper towels for the Canadian and U.S. markets. Announcing an additional $240M tissue investment

Kruger Products also announced today a further investment of $240M to expand the Sherbrooke operation with new production lines as well as the construction of a new tissue manufacturing facility over the next three years. This investment is part of the Company’s broader focus on expanding its business and continuing to offer high quality tissue products to customers across North America. The investment announced today is supported by the Government of Québec through Investissement Québec (“IQ”) which is investing $165M in loans.

“We couldn’t be more pleased to be making this additional investment as part of our strategic growth plan. Sherbrooke will become a major production hub that will work together with our existing facilities to reach our North American markets,” said Mr. Bianco.

The additional capacity will allow Kruger Products to expand its product offering and is expected to enable it to grow its market share across its different categories, including bathroom tissue, paper towels and facial tissue for household and away-from-home use. These are available to consumers under such favourite brands as Cashmere®, SpongeTowels®, Scotties® and Purex® in Canada, and White Cloud® in the U.S.

As part of the $240M investment, the Company plans to add a bathroom tissue converting line to the existing Sherbrooke plant (the “BT Line”), as well as build a new facility that will house an LDC tissue machine (the “LDC Machine”) and a facial tissue converting line (the “FT Line”).

Construction of this facility is anticipated to start in the summer of 2022 on a site adjacent to the Sherbrooke plant. The BT Line and the FT Line will be commissioned in 2022 and 2023 respectively, while the LDC Machine is expected to start up a year later, in 2024.

LDC, which stands for light dry crepe, is one of the most widely used tissue making technologies in the world. At maturity, the LDC Machine is expected to increase the Company’s annual output by at least 30,000 MT. This project is also expected to result in the creation of 141 jobs which will add to the 180 jobs already created by the previous TAD project.

In addition to creating jobs, the project will bring significant benefits to the region in terms of direct spending estimated at $110M and close to 410,000 person-hours for the construction of the new building and installation of the LDC Machine and two additional converting lines.
more at: https://www.kptissueinc.com/gpc/_media/Document/2021-02-26-press-rel-tad-phoenix-e19.pdf

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