Kapuskasing forestry company looks to shift from newsprint to making materials for home construction.
The federal government is investing $7.5 million in Kap Paper for an engineering study aimed at transforming the Kapuskasing mill into a medium-density fibreboard (MDF) facility.
The announcement was made by the federal government and Industry Minister Mélanie Joly in a release on Saturday.
This funding is not for refurbishing the plant to start new production, but rather for a Front End Engineering Design (FEED) study.
A FEED study is an essential initial planning step used in industrial project development, focusing on designing and organizing the technical, financial, and scheduling details before making significant investment and construction choices.
In November of last year, Kap Paper CEO Terry Skiffington informed a House of Commons standing committee that he was pursuing a multi-million-dollar financing package to facilitate a major conversion of the plant through both government support and private investment.
Shifting from newsprint to MDF aligns better with Ottawa’s housing strategy, Skiffington stated. He predicted that the plant conversion could happen within 30 months once funding becomes available.
Both provincial and federal governments have been providing assistance to the struggling mill, which employs 240 people in Kapuskasing. As a vital local buyer of wood chips and bark, Kap Paper also supports about 2,500 jobs in northeastern Ontario’s forestry and trucking sectors.
Last October, Fed Nor provided $10 million in temporary funding to keep operations running smoothly.
In a statement on January 31, Joly referred to Kap Paper as a “regional economic driver” that plays an important role in supporting northeastern Ontario’s softwood lumber industry.
“This investment will help the company define its plan to manufacture higher-value products to diversify revenue streams, stabilize demand for fibre and maximize the economic output of harvested timber. For Ontario, developing these products will help create and maintain jobs, and strengthen regional economies.”
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