What is the prospect of major wrapping paper projects continuing to launch Cascades?

Cascades is very close to reopening a containerboard-converted plant in Virginia Share Cascades' quarterly results and provide details on major plant projects.

Kumashima Paper Mill Renovation Near Completion

Quebec-based Cascades said in its fourth-quarter earnings report Feb. 23 that its Bear Island box cardboard conversion project is on track to start by the end of March. It will produce 100 percent recycled decking cardboard. President and CEO Mario Proud said on an earnings call that 100 percent of production is guaranteed this year, with production reaching 75 percent in 2024 and 2025. It expects production to reach 235,000 tons in 2023.

The facility, located in Ashland, Virginia, was originally scheduled to start production in the fourth quarter of 2022, but was delayed. It was initially expected to cost about $380 million, but cost increases put the final figure closer to $515 million to $525 million, with $396 million invested in the project so far.

Overall, Cascades reported fourth-quarter sales of $1.13 billion, down from $1.17 billion in the prior quarter but up from $1.02 billion in the same period last year. Fourth-quarter EBITDA was $116 million.

Cascades Packaging Products and Tissue sales both increased 19% and 13% year over year to $567 million 721 million, respectively. Cascades' full-year sales were $4.46 billion, compared to $3.95 billion in 2021.

Operations "are facing headwinds in excess of $475 million in production, raw materials, freight and energy costs in 2022 alone, and our team has done an excellent job executing multiple countermeasures," Cascades said on an investor conference call. "Our tissue division will take longer and price rebalancing will take time to materialize, but we are encouraged by the progress being made and expect continued gains from our operations and profitability initiatives."

Cascades expects corrugated box waste paper OCC market conditions to normalize, but "this is not expected to lead to any significant price changes in the short term."

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