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November 17, 2016

Tolko Industries to sell mill in Manitoba

Tolko Industries to sell mill in Manitoba

Tolko Industries Ltd. announced that Canadian Kraft Paper Industries Limited, a company affiliated with American Industrial Acquisition Corporation, has purchased its Manitoba Kraft paper mill and sawmill in The Pas, Manitoba.

As part of the agreement, all current Manitoba employees will transition to Canadian Kraft Paper Industries Limited, and maintain operations going forward. Over the coming months, Tolko will work with Canadian Kraft Paper Industries Limited to support a successful transition.

Brad Thorlakson, President and CEO of Tolko Industries Ltd. commented: “We are pleased negotiations with Canadian Kraft Paper Industries Limited have reached a successful conclusion. I want to thank the employees at the Manitoba operation for their dedication and patience throughout this process, and to the retirees for their support of the sale.”

Mr. Thorlakson went on to add, “We also want to acknowledge the critical role that the Swampy Cree Tribal Council played in enabling this sale; and recognize the Manitoba Government, the Town of the Pas, and local unions for their cooperation and work towards making this sale happen.”

Back in August Tolko announced that it will shut down the mill.  The mill had been operating in the northern Manitoba town since the late-1960s and once employed more than 1,000 people, produces heavy kraft paper used in applications such as cement bags. Tolko Industries ended its lumber production in The Pas 8 years ago, when it closed its sawmill.

The Canadian company has 13 facilities in Western Canada, 3 in Alberta and one in Saskatchewan. The one in The Pas is the only Manitoba facility.

Back in 2014, Tolko explained Manitoba Hydro that the operations were suffering from competitive disadvantages, including higher fuel costs relative to competitors. Because Tolko uses a combination of oil and biomass and waste oil to fuel its steam boilers, it would have cost about $180 million to build the infrastructure necessary to gain access to the nearest natural gas pipeline, 200 kilometres away from The Pas.

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