Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) today announced the construction of a commercial plant specializing in the production of cellulose filaments, a new sustainable biomaterial derived from wood fiber, at its Kénogami paper mill in Quebec as well as the optimization of the mill, at a total cost of $38 million.
“Our investment in cellulose filaments represents an opportunity to enter into non-traditional growth markets,” stated Yves Laflamme, president and chief executive officer, during a press conference attended by government representatives, local dignitaries and employees. “The cellulose filament and Kénogami mill optimization projects will create synergies within our network of operations in Saguenay‒Lac-Saint-Jean.”
Cellulose filaments are derived from wood fiber that is mechanically processed without chemicals or enzymes. They are manufactured entirely from renewable sources, resulting in a low carbon footprint. Offering a wide variety of uses and a number of benefits, the filaments can be integrated into commercial and consumer products from many industries, including transportation, construction and energy, increasing the resistance and durability of those products.
The new $27 million project will create eight jobs in the startup phase slated for 2021, and a total of 23 jobs once the plant reaches its full production capacity of 21 metric tons per day. These new jobs will be in addition to the 200 existing positions at the paper mill.
Resolute will also invest $11 million to enhance the Kénogami paper mill’s short-term competitiveness by modernizing equipment in order to produce high-grade SCA+ supercalendered paper, allowing the mill to access more favorable markets. The mill has a production capacity of 133,000 metric tons of specialty papers per year.
The cellulose filaments will be marketed with the help of Performance BioFilaments Inc., a joint venture established in 2014 by Resolute and Mercer International Inc. that is dedicated to the development of non-traditional applications for cellulose filaments. The extraction technology was developed by FPInnovations Inc., one of Canada’s largest scientific forest product research and development centers, of which Resolute is a member.
The project will be funded in part by Quebec’s Department of Forests, Wildlife and Parks ($2.5 million), Investissement Québec ($4.2 million) and Natural Resources Canada ($4.9 million).