[Source: www.kenoradailyminerandnews.com, August 24, 2006]
Weyerhaeuser vice-president Sarah Goodman emphasized today that company restructuring plans include the sale of the Dryden mill, but they plan to keep Kenora’s Trus Joist plant within the Weyerhaeuser family.
Goodman was referring to Wednesday’s announcement of a merger of her firm’s fine paper division assets with Domtar, creating a new multi-national that both company’s feel will become a North American leader in the industry.
Domtar and Weyerhaeuser will be co-owners of the new company which will take the Domtar name. Weyerhaeuser is providing 10 pulp and paper mills and two sawmills to the package, while Domtar brings eight paper and four pulp mills.
Weyerhaeuser will receive a $1.35 billion cash payment for its assets and will own 55 per cent of the new company.
Weyerhaeuser has been reviewing its North American fine paper division operations for much of this year and Goodman noted the restructuring will allow Weyerhaeuser to focus on other wood products, including engineered wood products like the trademark TimberStrand made at Kenora.
“Going forward, the new company has the size and the economy of scale to be highly competitive,” she said, referring to the reason for the restructuring. The new company will have a revenue base of over $6.5 billion based on current sales for the operations involved. Combining the two groups of mills is expected to provide an operational savings of $200 million annually. Current earnings before taxes for the operations involved are $750 million.
The $3.3 billion deal will take another six months to close, Goodman said.
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