Neenah Paper Working Deal to Transfer Terrace Bay Mill Operations
May 9, 2006 (Press Release) - Neenah Paper, Inc. announced today that the company and Buchanan Forest Products, Ltd. have tentatively agreed to a transfer of Neenah Paper's Terrace Bay pulp mill and woodlands operations. The transfer is subject to several conditions, including completion of negotiations with mill and woodlands employees to help make the operation more competitive in the current challenging environment. These negotiations need to be completed by June 1 in order for the transaction to proceed.
"We are very pleased with this agreement and feel it is clearly in the best interest of our employees, shareholders, customers and local communities, as well as a positive development for the forest products industry in Northern Ontario," said Sean Erwin, Chairman and Chief Executive Officer of Neenah Paper.
"Following the mill shutdown in February, we had recently reached the difficult decision to permanently close the mill and woodlands. Instead, as part of this agreement we will provide funds to Buchanan that would have been required to close the facilities and which can now be used to help make the operation successful. Buchanan Forest Products has a long history and knowledge of Ontario forestry operations and is in the best position to properly manage the wood flow to gain the highest value from the fiber while assuring an efficient source of wood for the mill. This type of business model is critical for success in the Canadian forest products industry," Erwin said.
Ken Buchanan, Chairman of Buchanan Forest Products, stated, "the acquisition should improve the present state of the forest industry in Northern and Northwestern Ontario and remove the uncertainty that currently hangs over the communities connected with the forest industry." In addition to the successful completion of employee relations efforts, Buchanan will be working with the governments of Ontario and Canada and others to finalize arrangements required to help the forest products industry survive.
It is anticipated that the transaction could close at the end of June.
SOURCE: Neenah Paper, Inc.