NORPAC Announces Price Increases on UGW and Newsprint Products

ND Paper, the US subsidiary of Nine Dragons Paper (Holdings) Limited, is taking critical steps to build on its growth in packaging products. At ND Paper's Biron, Wisconsin mill, the company will be converting its B26 paper machine at the end of 2022 from coated mechanical papers to lightweight, high-strength recycled packaging products. Today, the Biron Division, located in central Wisconsin, employs more than 300 full-time personnel and operates two paper production lines with a combined annual production capacity of approximately 530,000 short tons. Its B25 paper machine produces approximately 270,000 short tons annually of corrugating medium and linerboard for packaging applications, while the B26 machine produces approximately 260,000 short tons annually of lightweight coated mechanical (CM) papers for end uses like catalogs, magazines and retail inserts. Upon completion of the conversion, both the machine and the mill will have increased annual manufacturing capacity. The B26 machine will have capacity for over 500,000 short tons of packaging paper, and the mill, in total, will have capacity for over 800,000 short tons.

Paper Excellence announced the indefinite curtailment of its paper operations at the Catalyst Crofton facility starting in early December 2022. Paper markets in China served by the mill have significantly weakened while there have been substantial cost escalations for chemicals, energy and wood fibre used at Crofton. The intersection of these pressures has materially impacted the financial viability of the paper operation. We expect to operate Crofton’s paper machines for 60 days following this announcement. We will be working closely with both unions as this decision affects about 80 Unifor employees and 70 PPWC employees. We recognize the hardship this will have on both our employees and the Cowichan Valley. We hope to minimize these impacts through union discussions that will consider secondments, utilization of earned time off and employment insurance. The mill’s pulp operations will continue production during the paper curtailment. Paper Excellence is working with both Provincial and Federal Governments while it conducts studies at the Crofton facility to consider accelerating its conversion into natural food and packaging grades.

For the second quarter of 2020, Clearwater Paper reported net sales of $480 million, a 6% increase compared to net sales of $452 million for the second quarter of 2019. Net income for the second quarter of 2020 was $23 million compared to net loss for the second quarter of 2019 of $0.4 million. For the first six months of 2020, Clearwater Paper reported net sales of $958 million, a 9% increase compared to net sales of $881 million for the first six months of 2019. Net income for the first six months of 2020 was $33 million compared to net income for the first six months of 2019 of $3 million.