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Kruger Products to Build New Tissue Plant With USD 575 Million Investment

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.

August 17, 2018

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This massive project will enable Kruger Products to increase its offering of ultra premium and innovative tissue products under the Cashmere®, SpongeTowels® and Purex® brands.

KP Tissue Inc. and Kruger Products L.P. announced its plan for a capital investment of USD 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 project will create more than 180 new jobs in the region.

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 USD 105 million by way of a convertible debenture. The remaining financing for the project is currently being finalized.

Through-air-dry (TAD) technology is the world’s most advanced ultra premium tissue products manufacturing technology. It uses less fibre to obtain a plusher, stronger, exceptionally soft and more absorbent product.

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.