Domtar sells Prince Albert mill

The Prince Albert Pulp Mill has been sold to Paper Excellence.

In a press release, Premier Brad Wall and Energy and Resources Minister Bill Boyd said they are welcoming Domtar’s announcement Monday that the mill has been sold.

“This announcement helps secure economic future for Prince Albert,” said Prince Albert Jim Mayor Scarrow.

“More than 200 direct jobs and many more in a revitalized forest industry. It is a truly great day for Prince Albert.”

Paper Excellence will be converting the mill so it can produce dissolving pulp for the production of a variety of products including rayon. They will be investing more than $200 million in the conversion of the mill and creating hundreds of construction jobs in addition to the projected 200 million jobs, according to the government. The conversion is expected to take between 18 and 24 months to complete.

The Communications, Energy and Paperworkers Union, the City of Prince Albert and First Nations partners from The Agency Chiefs Tribal Council and Montreal Lake Cree Nation were part of the negotiations that brought about the deal.

Paper Excellence owns three mills in Canada – two in British Columbia and one in Saskatchewan. Dixon said the union worked with the company on both B.C. deals and is confident in Paper Excellence’s word that a deal was close before it brought an agreement to the union and to Prince Albert.

In a press release on the sale, Domtar said the transaction is subject to customary closing conditions as well as two conditions: That the buyer and the Government of Saskatchewan reach an agreement concerning fiber allocation, the purchase of excess power, and the division of responsibilities between the Government and the buyer for past environmental liabilities; and that a new collective agreement be reached between the buyer and local labor union. The transaction is expected to close in the second quarter of 2011.

Domtar noted Monday that the Prince Albert mill was permanently closed in the second quarter of 2006 and has not been operated since. Domtar acquired the assets in 2007 as part of a transaction with Weyerhaeuser Company. Domtar completed the dismantling of the mill’s paper machine and converting equipment in 2008.