West Fraser and Mercer International announced an agreement to dissolve their 50/50 joint venture in Cariboo Pulp and Paper. As a result, West Fraser will remain the sole owner/operator of the pulp 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 tons of high-quality bleached softwood pulp annually and employs around 300 people.
“Cariboo Pulp is an important member of the West Fraser family of mills,” said Sean McLaren, president and CEO of West Fraser. “This agreement better positions West Fraser to support the mill and provides continued security for our talented workforce,” he added.
Commenting on the deal, Juan Carlos Bueno, CEO of Mercer, said: “We acquired our non-core stake in Cariboo Pulp as a result of our acquisition of Mercer’s Peace River mill in 2018. After analyzing this asset considering our strategic priorities, we have determined that this dissolution will allow us to redeploy and direct resources to areas that are better aligned with our long-term focus.”
According to West Fraser, no severance or other amounts are to be paid by either company in connection with the termination of the joint venture. Mercer will retain certain finished goods inventory in connection with the transaction and expects to recognize a non-cash impairment charge in the first quarter in connection with the dissolution of the joint venture, based on the net book value of such interest.
Cariboo Pulp and Paper is a pillar of the Quesnel forestry community in Canada and has been in operation since 1972.
