Fibrek Signs Contract to Supply Green Energy
Montréal, Quebec, Canada, 04 May 2012 -- Fibrek Inc. has concluded an agreement for the sale of green energy produced at its cogeneration facilities at the Saint-Félicien mill in connection with Hydro-Québec Distribution’s Power Purchase Program for electricity derived from forest biomass cogeneration (PAE 2011-01), which was launched 20 December 2011.
The 33.23 MW of green energy currently produced by Fibrek will be sold to Hydro-Québec Distribution beginning on 05 May 2012, at a price of CAD 106 per megawatt per hour, indexed to the consumer price index (CPI) for a 25-year period. The contract will generate approximately CAD 16 million a year in EBITDA.
“This production will further increase the previously announced 9.56 MW that Fibrek will be supplying to the government corporation starting in December 2012. By the end of this year, the Saint-Félicien mill will be producing 42.79 MW in green energy for Hydro-Québec Distribution,” said Pierre Gabriel Côté, Fibrek's CEO.
“Revenue diversification is a key component of our business plan. In addition, increasing our green energy production fits well within our sustainable development plan and reflects our vision when it comes to innovation for growth,” Côté said.
Fibrek is investing approximately CAD 37 million in the construction of a new power plant that will be used to produce the additional 9.56 MW. Over the long term, green energy production will ensure the competitive position of the Saint-Félicien NBSK pulp mill, despite the challenges facing the pulp and paper industry.
Fibrek (TSX: FBK) is a leading producer and marketer of high-quality virgin and recycled kraft pulp. The company operates three mills in Saint-Félicien, Québec, Canada; Fairmont, West Virginia, USA; and Menominee, Michigan, with a combined annual production capacity of 760,000 metric tons. Fibrek has approximately 500 employees. The Saint-Félicien mill provides northern bleached softwood kraft pulp (NBSK pulp) to various sectors of the paper industry, mainly in Canada, the United States, and Europe, for use in the production of specialized products. The Fairmont and Menominee mills manufacture air-dried recycled bleached kraft pulp (RBK pulp) and primarily supply manufacturers of fine uncoated paper, tissue paper for commercial and industrial uses, and coated paper in the United States.