New Sherbrooke Plant Doubles its Tissue Paper Capacity

KP Tissue Inc. (“KPT”) (TSX: KPT) and Kruger Products L.P. (“KPLP”) today announced KPLP’s plan to add to the capacity of its Sherbrooke expansion project by constructing a double width Light Dry Crepe (LDC) tissue machine with a capacity of at least 60,000 MT instead of the previously announced 30,000 MT LDC tissue machine.

This additional capacity will allow us to accelerate the growth of our business and continue to provide our customers across North America with high quality tissue products like Cashmere®, SpongeTowels®, Scotties® and Purex® in Canada and White Cloud® in the U.S., said Dino Bianco, CEO with KPLP.

With this enhancement, the total estimated cost of the Sherbrooke expansion project, which also includes the previously announced addition of a bathroom tissue converting line (“BT Line”) to the existing TAD Sherbrooke plant and a new plant that will house a facial tissue converting line (“FT Line”) with the double width LDC tissue machine, has increased from $240 million to $351.5 million. The additional costs of the project will be financed by an increase in the senior bank facility for the project from $75 million to $150 million and an equity investment by KPLP of $36.5 million.

The construction schedule remains the same. The BT Line and FT Line will be commissioned in 2022 and 2023 respectively while the LDC tissue machine is expected to start up in 2024.

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