West Fraser Timber to sell softwood kraft pulp mill in Alberta to Mondi Group

West Fraser Timber announced an agreement to sell its unbleached softwood kraft pulp mill in Hinton, Alberta to Mondi Group. The transaction establishes a long-term partnership between the two companies in the region. Pursuant to the transaction, West Fraser will continue to supply fibre to the Hinton mill under long-term contract, via residuals from West Fraser’s Alberta sawmills. Mondi’s intention, subject to pre-engineering and permitting, is to invest EUR 400M in the expansion of the Hinton mill, primarily for a new 200,000 ton per annum kraft paper machine, anticipated to be operational from the second half of 2027. West Fraser expects to record a significant impairment loss in connection with the disposal of the Hinton pulp mill given the nominal proceeds. The estimated carrying value of the assets and liabilities being disposed of were $115M and $111M as of December 31, 2022 and March 31 respectively. The transaction is anticipated to close following successful completion of customary regulatory reviews and satisfaction of customary conditions. West Fraser will provide a further update during its second quarter results conference call.