Fibrek bid may 'insulate' Resolute Forest Products
Forest products company says more mills could help it ride out pulp and paper price swings
Resolute Forest Products says acquiring more mills with different product lines will help the company with any future market changes.
The Montreal-based forest products company has made a takeover bid for Fibrek, a company with mills in Quebec, Michigan and West Virginia.
Resolute operates mills in Thunder Bay and Fort Frances.
Pierre Choquette, Resolute's Canadian public affairs director, said more mills could insulate the company from pulp and paper price changes.
"It's always better to have more diversified products where you're not actually impacted when the markets do go down," he said.
But the union representing workers at Resolute Forest Products said the company should focus on its problems at hand, before trying to expand.
Kim Ginter, vice President with the Communications, Energy and Paperworkers Union, said Resolute should make sure it can take care of its obligations at its existing operations.
"So I wish they would just clean up their house before they look at taking over more companies when we're still trying to deal with the fallout of what happened [with the Companies’ Creditors Arrangement Act]."
As the company moves on with its restructuring process, Ginter said Resolute continues to honour an agreement with the union to ensure the company's pension fund is properly funded.
The cost of the Fibrek takeover is about $72 million.