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West Fraser, Mercer dissolve Cariboo Pulp and Paper jv

West Fraser Timber and Mercer International have announced the dissolution of their 50/50 joint venture in Cariboo Pulp and Paper. Following the agreement, West Fraser will continue as the sole owner and operator of the mill, operating under the name Cariboo Pulp and Paper Company.

Situated in Quesnel, B.C., Cariboo Pulp and Paper has a production capacity of up to 340,000 tonnes of northern bleached softwood kraft (NBSK) pulp annually, and employing nearly 300 individuals.

Sean McLaren, president and CEO of West Fraser, expressed the significance of Cariboo Pulp and Paper within the company’s portfolio, stating, “This agreement better positions West Fraser to support the mill and provides ongoing certainty to our talented workforce.”

“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,” said Mercer CEO Juan Carlos Bueno.

As per the agreement, neither company will incur any termination or other expenses related to the termination of the joint venture. Mercer will maintain certain finished product inventory in connection with the transaction. Additionally, Mercer anticipates recognizing a non-cash impairment in the first quarter associated with the dissolution of the joint venture, based on the net carrying value of such interest.