ND Paper LLC, a wholly owned subsidiary of Nine Dragons Paper Limited, announces the signing of a final contract for the purchase of assets with Resolute Forest Products, based on which Nine Dragons will purchase the Resolute factory for the production of recycled bleached kraft cellulose located in Fairmont, West Virginia, for 55 million dollars, plus some working capital, payable in cash. Nine Dragons is planning to finance the purchase through existing funds in the budget.
“We are keen to add Fairmont Mill to Nine Dragons’ overall portfolio”, declares Ken Liu, CEO of ND Paper. “The purchase of the Fairmont factory enables us to promote our growth in the United States and globally, and supports the momentum started with other recent purchases in the second quarter of 2018. This transaction is not only consistent with our long-term strategy of environmentally sustainable production of paper, but further supports Nine Dragons’ supply needs for fibre at company level and the initiatives of overall growth”. The Fairmont factory is engaged in the production and distribution of recycled pulp used in a wide range of products, from packaging to tissue paper. Located in the northern part of West Virginia, the factory has an annual manufacturing capacity of about 218 thousand tons and is one of three factories in the world which produces air dried recycled pulp. The purchase should generate significant benefits both for the paper mill and for Nine Dragons. ND Paper will have access to high quality recycled pulp and will diversify its own production base, whilst the Fairmont factory, through an increase in capital investment, will expand its current capacity and will inject growth into West Virginia’s economy.
ND Paper has agreed to offer employment to the staff of the Fairmont factory from the closing of the transaction. “We are proud of the progress that we have made together with the employees of the paper mill over the years to improve the operation of Fairmont”, said Yves Laflamme, president and managing director of Resolute. “We are pleased that the local community and the whole state region will continue to benefit from the economic and social impact of the operation of the factory”.
“The proceeds of this sale will enable us to further increase our liquidity and to continue to improve our bank balance and our financial flexibility”, adds Laflamme.