West Fraser Timber Co. Ltd. and Mercer International Inc. have announced the dissolution of their 50/50 joint venture in Cariboo Pulp and Paper, with West Fraser set to become the sole owner/operator of the mill. Cariboo Pulp and Paper, located in Quesnel, British Columbia, has the capacity to produce up to 340,000 tonnes of high-quality northern bleached softwood kraft (NBSK) pulp annually and employs nearly 300 people.
Juan Carlos Bueno, CEO of Mercer, stated that the dissolution will allow them to redeploy and direct resources to areas that are better aligned with their long-term focus. Mercer expects to recognize a non-cash impairment in the first quarter in connection with the dissolution of the joint venture, based on the net carrying value of such interest.
Cariboo Pulp and Paper has been in operation since 1972 and is a pillar of the Quesnel forestry community. West Fraser's President & CEO, Sean McLaren, emphasized the importance of Cariboo Pulp to their family of mills and how the agreement better positions West Fraser to support the mill, providing ongoing certainty to their workforce.
West Fraser is a diversified wood products company with more than 60 facilities in Canada, the United States, the United Kingdom, and Europe, producing lumber, engineered wood products, pulp, newsprint, wood chips, and renewable energy. On the other hand, Mercer International Inc. is a global forest products company with operations in Germany, the United States, and Canada, with consolidated annual production capacity of 2.3 million tonnes of pulp, 960 million board feet of lumber, 210,000 cubic meters of cross-laminated timber, 45,000 cubic meters of glulam, 17 million pallets, and 230,000 metric tonnes of biofuels. As a result of these announcements, the company's shares have moved -0.1% on the market, and are now trading at a price of $10.08. Check out the company's full 8-K submission here.
