West Fraser Timber Co. Ltd. and Mercer International Inc. announced today an agreement to dissolve their 50/50 joint venture in Cariboo Pulp and Paper. West Fraser will continue as the sole owner/operator of the mill, doing business as Cariboo Pulp and Paper Company.
Located in Quesnel, British Columbia, Cariboo Pulp and Paper has the capacity to produce up to 340,000 tonnes of high-quality Northern Bleached Softwood Kraft (NBSK) pulp annually, employing nearly 300 people.
“Cariboo Pulp is an important member of the West Fraser family of mills," said Sean McLaren, West Fraser's President & CEO. "This agreement better positions West Fraser to support the mill and provides ongoing certainty to our talented workforce."
Commenting on the agreement, Juan Carlos Bueno, Mercer CEO, said: "We acquired our non-core interest in Cariboo Pulp as a result of our acquisition of the Mercer Peace River mill in 2018. After reviewing this asset in light of our strategic priorities, we determined that this dissolution will allow us to redeploy and direct resources to areas that are better aligned with our long-term focus."
No termination or other amounts are payable by either company in connection with the termination of the joint venture. Mercer will retain certain finished product inventory in connection with the transaction. Mercer expects to recognize a non-cash impairment in the first quarter in connection with the dissolution of the joint venture, based on the net carrying value of such interest.
Cariboo Pulp and Paper is a pillar of the Quesnel forestry community and has been in operation since 1972.