Stockwatch – Cascades To Open A New Tissue Converting Facility In North Carolina

Stockwatch – Cascades will extend the scope of its converting activities in Southeastern United States as part of its growth strategy.

Quebec-based manufacturer of green packaging and tissue paper products, Cascades, Inc. (TSE:CAS, Mkt cap 591.24M, P/E – , Div/yield 0.04/2.55, EPS -0.33, Shares 94.15M) has announced the installation of a new US$55 million tissue converting facility located in Wagram, North Carolina.

Stockwatch Cascades tissue converting facility Wagram North Carolina

Stockwatch – Cascades to open tissue converting facility in Wagram, North Carolina

According to the plans, the plant should begin operation toward the end of 2014. With this move, the company expects to reorganize and further extend the scope of its converting activities in Southeastern United States, as part of its growth strategy.

It announced that the total annual capacity for the new plant to be approximately 10 million cases on six converting lines. The plant will produce a range of tissue products, such as bathroom tissue, paper napkins, kitchen towels and hand towels. The products will be intended both for the away-from-home and consumer products markets.

Suzanne Blanchet, president and chief executive officer (CEO) of Cascades Tissue Group, said the installation of the plant in the Southeast – a US market, she says, that is growing at impressive rates – will help optimize the company’s converting platform.

Cascades will be able to relocate the equipment it uses elsewhere, while enjoying the benefit of the most up-to-date equipment, including robotised warehouse management. Such steps will result in enhancing the company’s productivity and logistics, as well as improving customer service, Blanchet believes.

Mario Plourde, president and CEO of Cascades, says that the cutting-edge technology available at the new converting plant will be able to successfully satisfy customers’ growing needs. “Cascades has made clear its intention to prioritize investments in the tissue paper and packaging products sectors,” he added.

Cascades is focused on reducing energy costs. That focus, along with lower raw material prices and product price increases should result in better margins over the next year. As margins improve, we believe that management will take steps to reduce debt. Cascades offers good value for patient investors.

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