Cascades, based in Kingsey Falls, Québec, will retain its European boxboard business. It will also keep its North American corrugated and plastic packaging operations, tissue paper division, and recyclable materials recovery business.
“This is a strategic move,” Hugo D'Amours, Cascades’ VP of communications and public affairs, told FoodProductionDaily. “We want to concentrate our investment into the sectors we’re strongest in. We lacked critical mass in boxboard in North America.”
“This transaction follows in the wake of a number of other actions taken during the course of the year, with a view to reducing our debt load and focusing our investments in certain core packaging sectors, as well as in the tissue paper and [recyclable materials] recovery sectors,” Cascades president and CEO Mario Plourde said in a news release.
Bye bye boxboard
The sale includes five manufacturing facilities in Canada, operated by Cascades’ Norampac division. The first, a mill in East Angus, Québec, produces coated recycled board for the production of folding cartons. The second is a mill in Jonquière, Québec that manufactures three-ply coated boxboard from virgin or recycled fiber.
Facility number three is a Winnipeg, Manitoba plant that manufactures folding cartons. The fourth is a Mississauga, Ontario plant that produces high-quality graphic packaging. A Cobourg, Ontario plant that manufactures high-quality flexographic boxboard containers is the fifth location.
Altogether, the five facilities employ 670 people. D’Amours said that because “those five units are integrated as a whole system,” the employees are part and parcel of the sale. Thus, any decisions about retaining or trimming the workforce will be made by Graphic Packaging officials.
The acquisition is subject to standard closing conditions and regulatory review and is expected to close in the first quarter of 2015.
21st century vision
In a recent presentation to investors, Cascades officials laid out a plan to modernize its operating platform to increase profitability. The scheme includes a $150m annual capital expenditure program, which calls for upgrading the company’s enterprise resource planning (ERP) system.
The plan also involves modernizing Cascades’ converting platform and improving its manufacturing productivity.
Toward that end, the company recently invested $13m into new high-tech, high-speed printing presses for two of its Norampac corrugated packaging plants. The Mitsubishi Evol presses are expected to help the plants, located in Vaudreuil and Drummondville, Québec, produce higher quality packaging while boosting productivity.