Tembec's has announced a two-phased investment of $310 million in its Temiscaming, Que. specialty cellulose facility. Phase 1 will cost $190 million and the remaining phase is $120 million. The investment will be one of the largest in the forest products industry in many years and will further reinforce Tembec's position as the world's second leading producer of specialty cellulose.
Annual production of green electricity will increase by up to 40 megawatts, reduce sulfur dioxide emissions by 70 per cent, increase Temiscaming's annual production capacity of specialty cellulose by 5,000 metric tonnes, and make Temiscaming one of the world's lowest-cost specialty cellulose manufacturing facilities.
The first phase of the project will involve the replacement of three old boilers with a new high-pressure boiler designed to burn waste sulfite liquor, a co-product of the specialty cellulose manufacturing process, producing green steam for use at the facility. The project also calls for the installation of a new electricity turbine that will be driven by this steam. The turbine will increase the Temiscaming facility's green electricity production capacity from its current 10 megawatts to, eventually, 60 megawatts. The boiler is scheduled to start up in December 2013, followed by the turbine, in May 2014. Phase 2 will run from 2014 to 2015.
Hydro-Québec will offtake the additional green electricity produced by this turbine under a 25-year contract at $106 MW/hour, indexed with CPI, which will strengthen and stabilize Tembec's revenues through the economic cycle.
"This game-changing project for Tembec will make Temiscaming one of the most competitive mills in the global pulp and paper market,” said James Lopez, Tembec's president and chief executive officer in a press release.
Temiscaming is located about 65 kilometres east of North Bay.
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