Resolute Forest Products has signed an agreement to sell its recycled bleached kraft pulp mill in Fairmont, West Virginia, US, to Nine Dragons Paper’s subsidiary ND Paper.
The total cash consideration for the transaction comprises $55m and certain elements of working capital.
Nine Dragons produces a wide range of packaging paperboard products, including linerboard, high-performance corrugating medium, coated duplex board, as well as recycled printing and writing paper and speciality paper.
The company operates nine paper mills in Asia, in addition to two US-based facilities in Wisconsin and Maine, through ND Paper.
Resolute Forest Products president and CEO Yves Laflamme said: “Proceeds from this asset sale will enable us to further increase liquidity, and continue to improve our balance sheet and financial flexibility.
“Over the coming days, we will communicate with our customers to discuss the transition of supply as we seek to optimise our recycled bleached kraft pulp business at our Menominee, Michigan facility.”
Following the completion of the transaction, existing Fairmont mill staff will be employed by ND Paper.
With a production capacity of around 218,000mt a year, the Fairmont Mill manufactures and distributes recycled pulp for use in different products, ranging from packaging to tissue paper.
The acquisition will allow ND Paper to diversify its manufacturing base.
ND Paper CEO Ken Liu said: “Our acquisition of the Fairmont Mill enables us to further our US and global growth, and sustains the momentum commenced by our recent acquisitions of the Biron, Wisconsin and Rumford, Maine pulp and paper mills acquired from Catalyst Paper in Q2 2018.
“Not only is this transaction consistent with our long-term strategy of environmentally sustainable papermaking, but also it further supports Nine Dragons’ company-wide fibre sourcing requirements and global growth initiatives.”