West Fraser's Hinton Pulp to Reduce Production Capacity; Move to Unbleached Kraft Pulp

One of Hinton Pulp's two production lines will shut, and the remaining line will produce Unbleached Kraft Pulp (UKP) rather than Northern Bleached Softwood Kraft Pulp (NBSK).

April 6, 2022 - West Fraser Timber Co. Ltd. announced that it will permanently reduce capacity at its pulp mill in Hinton, Alberta, Canada by the end of this year. One of Hinton Pulp's two production lines will shut, and the remaining line will produce Unbleached Kraft Pulp ("UKP") rather than Northern Bleached Softwood Kraft Pulp ("NBSK").

According to West Fraser's website, the Hinton pulp mill has the capacity to produce 380,000 metric tonnes per year of NBSK, which is sold under the trade name Hinton HiBrite.

"Hinton Pulp has been in operation since 1956 and these changes are necessary to simplify our operation, reduce capital requirements and greenhouse gas emissions, and better align with consumer expectations," said Ray Ferris, President and CEO of West Fraser.

The capacity reduction will see staffing levels transition from 345 positions to 270. West Fraser expects to mitigate the impact on employees through natural attrition, retirements and by offering employment opportunities at other West Fraser operations.

"Our Hinton Pulp team has been engaged in a comprehensive review process and I want to thank them for their creativity and commitment to the mill, our customers and the environment. We remain strongly committed to the community of Hinton, the future of the plant, and to our neighbouring lumber operation, Hinton Wood Products," Ferris said.

The environmental benefits of moving to a single UKP production line include:

• an estimated 35% reduction in greenhouse gas emissions ("GHGs"), which is equivalent to taking approximately 19,900 cars off the road per year
• an estimated 25% reduction in water use, air emissions and waste generation, and elimination of chlorine dioxide emissions

As the world moves away from single-use plastics, UKP is now used increasingly in a wide variety of everyday items including cardboard packaging, grocery bags, fibre-cement board and specialty products.

Since late 2021, the mill has undertaken several product trials and received positive initial customer feedback as to the quality and strength of the pulp produced. Currently, mill employees are preparing for the transition after satisfying all existing customer commitments for NBSK.

It is anticipated that an impairment charge of approximately US$13 million will be recorded in West Fraser's first quarter 2022 results associated with the write-down of equipment that will be decommissioned permanently as part of the transition to UKP.

West Fraser is a diversified wood products company with more than 60 facilities in Canada, the United States, the United Kingdom, and Europe. From responsibly sourced and sustainably managed forest resources, the company produces lumber, engineered wood products, pulp, newsprint, wood chips, other residuals, and renewable energy. To learn more, visit: www.westfraser.com.

SOURCE: West Fraser Timber Co. Ltd.