Kap Paper Inc. is borrowing $10 million from the province to help it weather “challenging market conditions.”
In a Jan. 27 news release, the Ontario government said the funds would help maintain roughly 2,500 jobs — 300 at the Kapuskasing mill and the remainder in the surrounding region — which "depend on the company's ongoing operation.”
“Hardworking people and businesses in communities like Kapuskasing provide goods we rely on every day, driving growth that builds Ontario,” Natural Resources Minister Graydon Smith said in the release.
“We’re protecting those contributions to economic and social well-being and strengthening operations across Ontario’s highly integrated forest sector.”
Kap Paper is a subsidiary of the Toronto-headquartered firm GreenFirst Forest Products.
It was spun off into a separate company last July as part of GreenFirst's plan to divide its lumber and paper businesses into two separate entities.
“This strategic move enables us to fully concentrate on our core business,” Joel Fournier, GreenFirst’s CEO, said in a statement at the time.
“Kap Paper remains crucial as a major consumer of our residuals.”
The company said it was looking for new opportunities in green energy, particularly through the efficient use of sawmill residuals and forest biomass.
At the time, it said it had secured a $24-million loan from an undisclosed lender to support that goal.
In addition to the Kapuskasing lumber mill, Kap Paper owns and operates the sawmills in Kapuskasing, Chapleau, Cochrane and Hearst that feed the mill, as well as a regional office in North Bay.
The company produces newsprint and bulk paper, operating with a production capacity of 220,000 metric tons.
Terry Skiffington, CEO of Kap Paper Inc., said the company has been working "tirelessly” with the provincial government and the Town of Kapuskasing on the arrangement.
“The goal for Kap Paper has been and remains to reposition the mill as a pulp, paper and energy super facility to support the regional sawmills, utilize available forest biomass, and support Ontario's need for incremental green electricity,” Skiffington said in the release.
“We are working very closely with the Ontario government to make this vision a reality in the near future."
Kapuskasing Mayor David Plourde echoed that statement, highlighting the significance of the forest sector to the region.
“The forestry industry is at the heart of our region, driving economic growth and providing good-paying jobs for our residents,” Plourde said in the statement.
“With this support, we can invest in innovative practices, enhance productivity, and build a more resilient future for the North. We are grateful for the province’s continued partnership and dedication to fostering prosperity in Northern Ontario."
