Tembec cogen project to power expansion

Oct 12, 2011, New York – At the Imperial Capital investor conference
last week, Tembec CEO James Lopez reviewed green energy investments,
including a pending co-gen project that may fuel future expansion.

Green energy investments at Tembec include a $25-million biogas project in Matane, QC; the $190-million waste liquor co-gen project in Temiscaming that will add some 40 MW of power; and a $13-million hog boiler optimization plan in Skookumchuck, BC to add 7 MW. The Temiscaming co-gen project comes with a projected four-year payback and includes a Green Purchase Power agreement with Hydro Quebec for 50 Megawatts.

In addition to replacing some aging equipment requiring $20 million in upgrades, the Temiscaming co-gen project will also right size the boiler for a possible 30,000 tonne per year expansion at the facility's dissolving pulp plant. That $100-million expansion project is still under study, but would be funded in part from cash flow generated from the co-gen project, an estimated $42 million EBITDA boost.

Overall the company has $519 million earmarked for capital spending in the coming few years, with $321 of that to be on fast payback green energy projects using proven technology. The investor presentation can be found here.