ND Paper LLC, a wholly-owned subsidiary of China-based Nine Dragons Paper Limited, entered into an agreement with Resolute Forest Products Inc. allowing Nine Dragons to acquire Resolute's recycled bleached kraft pulp mill located in Fairmont, West Virginia.
According to company officials, Nine Dragons plans to fund the $55 million acquisition, plus certain elements of working capital, through existing cash on its balance sheet.
"We are thrilled to add the Fairmont Mill to Nine Dragons' global portfolio," said Ken Liu, CEO of ND Paper. "Our acquisition of the Fairmont Mill enables us to further our US and global growth, and sustains the momentum commenced by our recent acquisitions of the Biron, Wisconsin and Rumford, Maine pulp and paper mills acquired from Catalyst Paper in Q2 2018. Not only is this transaction consistent with our long-term strategy of environmentally-sustainable papermaking, but also it further supports Nine Dragons' company-wide fiber sourcing requirements and global growth initiatives."
The Fairmont Mill is engaged in the business of manufacturing and distributing recycled pulp used in a wide range of products, from packaging to tissue paper. Located in the northern part of West Virginia, the Mill has an annual production capacity of approximately 218,000 metric tonnes, and is one of three pulp mills in the world that produces air-dried recycled pulp. The acquisition is expected to generate significant benefits for both the Mill and Nine Dragons.
ND Paper said it will gain access to high quality recycled pulp and diversify its manufacturing base, while the Fairmont Mill, through an increase in capital investment, will expand its current capabilities and inject growth into the West Virginia economy, particularly in the surrounding community.
ND Paper has agreed to offer employment to Fairmont mill employees, effective upon closing of the acquisition; closing is expected to occur in the next two months and is subject to customary closing conditions and approval.