Kruger products to invest $575m for new tissue plant
KP Tissue and Kruger Products L.P. to plan for a capital investment of $575 million in the Brompton area of Sherbrooke, Québec, to build a new, state-of-the-art tissue plant featuring Canada’s largest and most modern through-air-dry (TAD) machine.
The new plant, which will be adjacent to an existing facility of the Kruger Group, will produce at maturity approximately 70,000 metric tonnes per annum of bathroom tissue and paper towels which will enable Kruger Products to increase its offering of ultra premium and innovative tissue products under the Cashmere, SpongeTowels and Purex brands.
The project is supported by the Government of Québec through Investissement Québec (“IQ”), which has agreed to invest $105 million by way of a convertible debenture. The remaining financing for the project is currently being finalized.
“This project is on an unprecedented scale for Kruger Products and will give us the additional capacity to continue to grow our business into the future. This new facility combined with our Memphis TAD location will allow us to rebalance our ultra premium tissue capacity to better serve our customers across North America. The Brompton site will also be part of a critical manufacturing hub in the region, working with our other locations in Crabtree, Gatineau and Sherbrooke to produce great quality tissue products for our company” said Dino Bianco, Chief Executive Officer, Kruger Products”.
While Kruger Products has been operating a TAD machine at its Memphis, Tennessee plant since 2013, its TAD 2 machine will be the first of its kind in Québec. Construction of the project is expected to begin in early 2019, and the plant is slated to commence production in early 2021. The project will generate major benefits, including over $250 million in direct expenses in Québec and one million person-hours for the construction of the new plant.