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KP Tissue and Kruger Products announces doubling of capacity with new LDC tissue machine at Sherbrooke, QC

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KP Tissue and Kruger Products announces doubling of capacity with new LDC tissue machine at Sherbrooke, QC

December 17, 2021 - 11:25
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SHERBROOKE, QC, Dec. 17, 2021 (Press Release) -KP Tissue Inc. (“KPT”) and Kruger Products L.P. (“KPLP”) today announced KPLP’s plan to add to the capacity of its Sherbrooke expansion project by constructing a double width Light Dry Crepe (LDC) tissue machine with a capacity of at least 60,000 MT instead of the previously announced 30,000 MT LDC tissue machine.

This additional capacity will allow us to accelerate the growth of our business and continue to provide our customers across North America with high quality tissue products like Cashmere, SpongeTowels, Scotties and Purex in Canada and White Cloud in the U.S., said Dino Bianco, CEO with KPLP.

With this enhancement, the total estimated cost of the Sherbrooke expansion project, which also includes the previously announced addition of a bathroom tissue converting line (“BT Line”) to the existing TAD Sherbrooke plant and a new plant that will house a facial tissue converting line (“FT Line”) with the double width LDC tissue machine, has increased from $240 million to $351.5 million. The additional costs of the project will be financed by an increase in the senior bank facility for the project from $75 million to $150 million and an equity investment by KPLP of $36.5 million.

The construction schedule remains the same. The BT Line and FT Line will be commissioned in 2022 and 2023 respectively while the LDC tissue machine is expected to start up in 2024.

About KP Tissue Inc. (“KPT”)

KPT was created to acquire, and its business is limited to holding, a limited partnership interest in KPLP, which is accounted for as an investment on the equity basis. KPT currently holds a 14.5% interest in KPLP.

About Kruger Products L.P. (“KPLP”)

KPLP is Canada's leading manufacturer of quality tissue products for household, industrial and commercial use. KPLP serves the Canadian consumer market with such well-known brands as Cashmere, Purex, Sponge Towels, Scotties and White Swan. In the U.S., KPLP manufactures the White Cloud brand, as well as many private label products. The Away-From Home division manufactures and distributes high-quality, cost-effective product solutions to a wide range of commercial and public entities. KPLP has approximately 2,700 employees and operates nine FSC COC-certified (FSC® C-104904) production facilities in North America.