Liberty Posted October 19, 2011 Author Share Posted October 19, 2011 FTP hit a 52wk low 2 months ago. Since then it is up 87.8%. Not a bad rebound! Link to comment Share on other sites More sharing options...
Liberty Posted October 24, 2011 Author Share Posted October 24, 2011 Looks like some construction worked union stuff will probably slow down production at Thurso (construction all over the province is being affected): http://www.radio-canada.ca/nouvelles/societe/2011/10/21/003-chantiers-construction-debrayage.shtml http://www.radio-canada.ca/nouvelles/societe/2011/10/24/001-debrayage-construction-syndicats.shtml Hopefully it won't last too long... Link to comment Share on other sites More sharing options...
Liberty Posted October 25, 2011 Author Share Posted October 25, 2011 Here's the company release: http://www.marketwire.com/press-release/fortress-paper-announces-temporary-work-delay-tsx-ftp-1577312.htm VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 25, 2011) - Fortress Paper Ltd. ("Fortress Paper" or the "Company") (TSX:FTP) announced that an unexpected walkout by unionized employees of the contractors engaged by the Company on the dissolving pulp conversion and cogeneration projects has resulted in the temporary suspension of construction activities at its Fortress Specialty Cellulose Mill in Thurso, Quebec. Although the construction unions have not issued an official statement, Fortress Paper understands that the walkout is a result of the opposition to a bill proposed by the Quebec Government and not as a result of disputes with the Company or their employers. The walkout is affecting construction projects across the Province of Quebec. Fortress Paper is exploring available options to resume construction work at the Fortress Specialty Cellulose Mill, and is in discussions with its contractors and government representatives with a view to resolving this situation as soon as practicable. Management remains hopeful that the issues relating to this walkout can be resolved shortly, with the result that the re-start of the Fortress Specialty Cellulose Mill and the commencement of dissolving pulp production that was planned for early November 2011 would only experience a minor delay. However, as the duration or outcome of the walkout is out of management's control and cannot be reasonably predicted, a further delay remains a possibility. Fortress Paper will provide updated guidance in this regard following the resumption of construction work at the mill. Link to comment Share on other sites More sharing options...
AZ_Value Posted October 25, 2011 Share Posted October 25, 2011 Here's the company release: http://www.marketwire.com/press-release/fortress-paper-announces-temporary-work-delay-tsx-ftp-1577312.htm VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 25, 2011) - Fortress Paper Ltd. ("Fortress Paper" or the "Company") (TSX:FTP) announced that an unexpected walkout by unionized employees of the contractors engaged by the Company on the dissolving pulp conversion and cogeneration projects has resulted in the temporary suspension of construction activities at its Fortress Specialty Cellulose Mill in Thurso, Quebec. Although the construction unions have not issued an official statement, Fortress Paper understands that the walkout is a result of the opposition to a bill proposed by the Quebec Government and not as a result of disputes with the Company or their employers. The walkout is affecting construction projects across the Province of Quebec. Fortress Paper is exploring available options to resume construction work at the Fortress Specialty Cellulose Mill, and is in discussions with its contractors and government representatives with a view to resolving this situation as soon as practicable. Management remains hopeful that the issues relating to this walkout can be resolved shortly, with the result that the re-start of the Fortress Specialty Cellulose Mill and the commencement of dissolving pulp production that was planned for early November 2011 would only experience a minor delay. However, as the duration or outcome of the walkout is out of management's control and cannot be reasonably predicted, a further delay remains a possibility. Fortress Paper will provide updated guidance in this regard following the resumption of construction work at the mill. Thanks for posting. Maybe this will give us late comers an opportunity to buy in below $30. Sometimes it's better to be lucky than good :D Link to comment Share on other sites More sharing options...
alertmeipp Posted October 25, 2011 Share Posted October 25, 2011 Hope not! Link to comment Share on other sites More sharing options...
Liberty Posted October 26, 2011 Author Share Posted October 26, 2011 http://www.theglobeandmail.com/news/politics/wildcat-construction-strikes-in-quebec-continue-for-second-day/article2213729/ The wildcat strikes were taking a toll on the bottom line of several companies and seriously undermining the province’s reputation. In Thurso, a town in the Outaouais region, the strike shut down work by contractors at a project by Vancouver-based entrepreneur Chad Wasilenkoff. He is transforming a hardwood pulp mill into a facility that makes a key ingredient in the manufacture of rayon. The company, Fortress Paper Inc., has only a few weeks in which to convert the mill, and the strike has blown a big hole in that tight schedule. Mr. Wasilenkoff figures the lost time adds up to between $500,000 and $600,000 per day in foregone profits, based on today’s commodity prices. “From our perspective, it’s very challenging and frustrating,” Mr. Wasilenkoff said in an interview Tuesday, the second full day of wildcat strikes that have cost companies tens of millions of dollars per day. That's a lot of money, especially if they run the mill 7 days a week! Link to comment Share on other sites More sharing options...
lessthaniv Posted October 27, 2011 Share Posted October 27, 2011 Fortress Paper resumes construction at Thurso mill 2011-10-27 09:58 ET - News Release Mr. Chadwick Wasilenkoff reports FORTRESS PAPER RESUMES CONSTRUCTION ACTIVITIES Fortress Paper Ltd. has resumed construction activities at its Fortress specialty cellulose mill in Thurso, Que., after all employees of contractors engaged by the company reported to the construction site today. The Fortress specialty cellulose mill began experiencing instances of construction worker absenteeism in the evening of Thursday, Oct. 20, 2011, with certain trade workers failing to report, in increasing numbers, to the construction site the following day and throughout the weekend. While at the time the company did not consider that these actions were likely to materially impact the timing of the conversion project at the mill, the unexpected full walkout by the construction workers on Monday, Oct. 24, 2011, has impacted the critical path of the project. The company expects construction activity to reach normalized levels once the construction work force is fully remobilized and construction activities are fully ramped up. However, it is possible that labour relations could change as a result of continuing opposition to proposed government legislation. The company is actively seeking to mitigate any delays, and assuming the construction work force continues to be fully engaged in the project going forward, the company expects that dissolving pulp production will commence no later than in mid-November, 2011. We seek Safe Harbor. Link to comment Share on other sites More sharing options...
lessthaniv Posted November 1, 2011 Share Posted November 1, 2011 http://albertaventure.com/2011/11/here%E2%80%99s-why-fortress-paper-can-make-some-money-for-you/ (I can't believe I'm quoting an article by Fabrice Taylor. And he is a fellow shareholder. I feel so dirty.) Here’s why Fortress Paper can make some money for you Paper Gains November 01, 2011 Smart Investor Fortress Paper Subscribe Email This Post Print This Post by Fabrice Taylor Like so many stocks in recent months, Fortress Paper Ltd.’s stock has fallen out of favour. Yet the company’s story is intact, the impressive growth prospects haven’t disappeared and management has an excellent track record of acquiring assets on the cheap. Fortress makes money – both literally and figuratively. Its Landqart mill in Switzerland is the sole provider of bank note paper for that country’s franc, and it’s also one of only nine suppliers for the euro, which it produces for 10 countries. The mill also produces currencies for other countries in Europe and Africa, as well as a variety of security papers, such as those used in passports. That’s not all. Fortress Optical Features, the assets of which were acquired in January, produces security threads used in banknotes. The company’s Dresden mill in Germany is one of the biggest producers of non-woven wallpaper base in the world. Finally, and most important to the investment thesis, is the company’s pulp mill in Thurso, Quebec. Pulp may seem an unlikely source of growing income but, in this case, it is. Acquired early last year for all of $3 million, the Thurso mill currently makes northern bleached hardwood kraft pulp (NBHK) – a sunset industry. But the mill is being converted to make dissolving pulp (DP), which is used primarily in rayon, a cotton substitute (and at the higher end of the spectrum, a source material for cigarette filters and even bombs). Prices for dissolving pulp are very high, thanks in part to a cotton crop failure that drove up the price of cotton and hence the demand for rayon. The specialty papers and banknote business has been hampered somewhat by the inefficiency of the Landqart mill. There are two lines, one of which has recently been refurbished for more throughput. It will operate as needed while the other will essentially be shut down. There is a lot of excess capacity in this business. The strong Swiss franc has been a problem, although the peg instigated by the Swiss central bank will help. Delays in launching anticipated new currencies have also hurt, as have high material costs. The outlook for this segment of the business isn’t exactly brilliant, although the company clearly sees it as attractive, since it continues to invest in innovation and research. Meanwhile, the wallpaper base business is performing well, with healthy profit margins and growing market share. Management anticipates that share to reach almost 60 per cent, more than twice what it was in 2006. Demand for wallpaper is growing thanks to changing fashions and some customer-friendly innovations, such as papers that can be more easily removed and an increase in their insulating characteristics. The outlook for dissolving pulp is also good, although it can be easy to overlook the risks. Cotton is cheaper, and while it’s vulnerable to crop failures it grows in just two years, so it doesn’t take long to increase supply. High prices resulting from a shortage are an excellent incentive. That’s not to say Fortress won’t benefit from current high spot prices, which are near US$1,500 per tonne. And given that the Thurso plant will have top-notch equipment, it will be a relatively low-cost producer. Unfortunately, Fortress recently announced a three-week delay to the transition of the plant from NBHK to dissolving pulp, which took the wind out of the stock. I should stress that CEO Chad Wasilenkoff has put together a very experienced team to manage this transition, which is by no means a simple process. I spoke to him recently and he reports that everything is going rather well. Also, the pulp that the plant currently produces is a specialized variety, which sells for better prices than standard NBHK pulp, so the lost opportunity will be somewhat offset. Longer term, the supply of cotton will likely fall, as it requires a lot of land to grow, land that will probably be directed towards the production of food and other higher-yield agricultural products in the future. Another valuable asset in the Fortress stable is its top-notch management. Fortress went public in 2006. That it paid only $3 million for the Thurso plant, which was subsequently written up by $45 million, testifies to Wasilenkoff’s abilities. This also bodes well for the long-term investor. But I think there’s also a short-term opportunity in the stock given the depressed valuation. Fortress’s value is highly leveraged to DP. The three-week delay reduces fourth quarter profits by between 30 and 40 per cent. But I think the transition will go relatively smoothly. Assuming it does, and that DP prices stay healthy, Fortress has lots of upside. A stock with both a short-term catalyst and long-term upside is rare. From where I sit, this one looks like a solid investment. Fabrice Taylor, CFA, is an award-winning financial journalist and analyst. He is also the author of the market beating President’s Club Newsletter. He can be reached at his email. Alberta Venture assumes no responsibility for the accuracy of any stock recommendations. DISCLOSURE Fortress Paper Ltd. (TSX:FTP) STOCK HOLDING Author Position yes November 2011 Contents Link to comment Share on other sites More sharing options...
Liberty Posted November 1, 2011 Author Share Posted November 1, 2011 http://fortresspaperblog.com/fortress-paper-release-quarter-2011-earnings-3.htm Link to comment Share on other sites More sharing options...
Liberty Posted November 2, 2011 Author Share Posted November 2, 2011 Found this via the SH board: http://www.tappi.org/content/events/11diss/fortin.pdf Link to comment Share on other sites More sharing options...
Liberty Posted November 8, 2011 Author Share Posted November 8, 2011 http://www.marketwire.com/press-release/fortress-paper-announces-third-quarter-2011-results-tsx-ftp-1583337.htm Link to comment Share on other sites More sharing options...
Kiltacular Posted November 10, 2011 Share Posted November 10, 2011 Hey guys, Anyone know if FTP held a conference call after the latest Q? I don't see one on their website. Link to comment Share on other sites More sharing options...
Liberty Posted November 10, 2011 Author Share Posted November 10, 2011 Hey guys, Anyone know if FTP held a conference call after the latest Q? I don't see one on their website. They did, I listened in. Not sure how long it usually takes for them to show up on the website, though.. Link to comment Share on other sites More sharing options...
Kiltacular Posted November 10, 2011 Share Posted November 10, 2011 Thanks Liberty...that prompted me to take a second look at the press release for Q3 and the replay is still avaiable. As an FYI, I also just called Fortress and it appears that they don't put the calls up as webcasts. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 10, 2011 Share Posted November 10, 2011 Anyone know what's the DP pricing now? Link to comment Share on other sites More sharing options...
Liberty Posted November 11, 2011 Author Share Posted November 11, 2011 Thanks Liberty...that prompted me to take a second look at the press release for Q3 and the replay is still avaiable. As an FYI, I also just called Fortress and it appears that they don't put the calls up as webcasts. Ah, yes, I should have thought of that. The replay information was right next to the dialing info. Sorry, it slipped my mind. Link to comment Share on other sites More sharing options...
lessthaniv Posted November 15, 2011 Share Posted November 15, 2011 More comments from Chad this morning. As posted earlier, using a price of $1200/mt, I think the value of the Thurso mill is around the $45/share mark. I doubt that Chad can put another deal together that's as good as Thurso because the market dynamics have changed but I do believe the opportunity to add more capacity in a profitable manner exists ... and based on the comments today (as well as other's he's made) it appears talks are in the works for two potential acquisitions. The Thurso mill is going contribute to 90% of the companies 2012 profitability. So, it will be interesting to see if Chad can close these deals and what the economics would look like. Another successful project has the potential to add significant value and it waterfalls over a very low shareholder base. Hopefully the company issues a press release confirming the Thurso plant is up and running in the short term. <IV ___________________________________________________ http://business.financialpost.com/2011/11/14/contrarian-investing/ Contrarian investing Dan Bradbury/National Post Chad Wasilenkoff, CEO, Fortress Paper. Comments Email Twitter inShare Special to Financial Post Nov 14, 2011 – 8:48 AM ET | Last Updated: Nov 14, 2011 3:22 PM ET Chad Wasilenkoff is no ordinary investor. When others are investing in popular stocks and commodities, the chief executive of Vancouver-based Fortress Paper Ltd. is investing in businesses that would – and do – make bankers run in the opposite direction. Most recently, he invested in a paper mill in Thurso, Que., stumping up money after banks refused to back him. He is banking on that mill to transform his business and prove the naysayers wrong. The key to his process is dissolving pulp, using a new method of production that enables mills to produce higher-margin materials that form the basis for viscose fabric products – in particular, rayon, which he sees as a burgeoning market. The following is an edited transcript of his interview with Danny Bradbury. Q How did you start out? A It all dates back to when I was a young child, buying and selling things in the paper, always looking for a deal. Negotiating, and not wanting to overpay. I was looking for deep discount investments. After school, I went to university and got involved in the stock market, selling a few shares. I got caught up in the technology and the dot-com boom. I found some very good valuations, but they were compared with overvalued companies. I realized that wasn’t the way I wanted to go, and became more of a contrarian investor. Q What does contrarian investing mean? A I look at the media for areas that are going through tough times. Very challenged, and very depressed, with no blue sky whatsoever, and where people aren’t looking for investment opportunities. That’s how I started building several of my previous companies, investing in gold mines when gold was $2.75 an ounce. I bought and sold oil and gas properties, copper deposits, and uranium, which we got when it was $8 a pound. That’s what led me to the forestry sector. Forestry is heavily depressed in North America and Europe, with lots of layoffs. Mills are being dismantled. These are mills that in the past couple of decades took hundreds of millions of dollars in retrofitting just to try to remain globally competitive. My view is that you just have to find the right product mix. That’s what we do, looking at it from outside the box, and coming at it from entry points that are so attractive we can still afford to put some growth capital in. Even if we can only use 80% to 90% of the equipment, it still becomes very beneficial. Q You bought a mill in Thurso, Que. Why? A The commodity business is very challenging, and it’s not a place where we want to operate. A lot of companies are talking about moving up the value chain, but very few are doing it. We’re in a better position coming in new, because we’re not burdened with all of these debts. We’re going after specialty markets from Day One. The Thurso mill was already bankrupt because it had not been competitive with its commodity product. We have been converting it to make a specialized product with much higher profit margins, and a significant barrier to entry, and good long-term prospects for its underlying product, which is rayon. It is a cheaper and better alternative to cotton. Most of that will be sold to China. It’s the largest and fastest-growing market. Q This is all good strategy, but how do you handle operations? A Management is critical to everything I do. I’m not an expert in pulp, any more than I was in gold, uranium, or oil and gas. So I need those particular experts in the industries that I’m focusing on. If you’re looking at industries that are out of favour, it’s easier to attract world-class management teams. Other people are laying people off on a regular basis, closing down mills and concentrating on cost-cutting. We bring more of an entrepreneurial flair, with growth initiatives, and we give people a lot of free reign. We manage our side of the process, but we rely on these industry experts as partners. After all, who am I to tell a guy how to run a mill? It’s the same story on the sales side. We’re really a holding company. We’re the rainmakers. We find an asset in a downed industry, and put together those assets to work well together. Q How difficult is it to raise money as a contrarian investor? A It’s always difficult. We get a forestry asset, and no matter how good the deal is, people look at forestry, and assume nobody makes money there, and they say “I’m out.” So the business can be solid, the people can be solid, and the reputation can be solid, and it’s still difficult. The cost of capital is always at the wrong end of the curve. But take the Thurso mill. We paid $1.2-million. The insurance replacement value alone was $851-million. The scrap value is worth more than that. It came with 320 hectares of land on the Ottawa river. Again, the land is worth more than that. People say it’s risky. We don’t think so. Q How else are you innovating with the mill? A One aspect of it is taking the biomass and burning it to produce sustainable electricity long term. It helps our overall productivity. When we make paper product at that mill, you end up with heavy cellulose as a by-product, which is essentially sugar. With our new product, we extract these sugars. By putting in this cogeneration facility, we burn them, getting rid of our by-product, and also helping the environment. We eliminate the smells, greenhouses gases and landfill. We signed an agreement with Hydro Quebec for it to buy the power. Q Analysts said that this would generate half your profit in 2011. Was that accurate at the time? A It would have been approximately half our profitability this year. That’s with generating only in November and December. Depending on the delays, we’ll see. Fast forwarding to 2012, we think the mill will generate around 90% of our profitability. Q What about the future? What’s next? A We anticipate acquiring at least two more dissolving pulp mills in the next few months. We’re looking globally, typically at politically stable countries – Western Europe and North America. We’re looking at South America, which would be bigger, and larger capital investments. They will be lower on our list of priorities, though. Posted in: Entrepreneur Tags: Chad Wasilenkoff, Danny Bradbury, Forestry And Logging Industries, Fortress Paper Ltd., Hydro-Quebec Inc., Manufacturing Sector, Paper And Paper Products Manufacturing, Quebec, Vancouver Link to comment Share on other sites More sharing options...
Liberty Posted November 22, 2011 Author Share Posted November 22, 2011 Some interviews with Chad W.: http://business.financialpost.com/2011/11/21/c-suite-paper-profit/ http://innovators.financialpost.com/2011/11/14/contrarian-investing/ Link to comment Share on other sites More sharing options...
lessthaniv Posted December 1, 2011 Share Posted December 1, 2011 http://www.bloomberg.com/news/2011-12-01/record-cotton-crop-spurs-goldman-to-predict-declining-prices-commodities.html Link to comment Share on other sites More sharing options...
Liberty Posted December 1, 2011 Author Share Posted December 1, 2011 http://www.bloomberg.com/news/2011-12-01/record-cotton-crop-spurs-goldman-to-predict-declining-prices-commodities.html I kind of like that. With some luck, it'll mean that a few more DP projects will be cancelled, and this will be good for FTP in the long-term. They're only interested in being low-cost producers and they pre-sell/hedge a lot (70%+) of their DP production, so while their margins could be pressurized by low cotton prices, they should be able to come through on the other side of this cycle in a stronger position. In fact, if they make 1-2 other DP acquisitions, they might be able to find the equipment to do the conversions cheaper if fewer players are scouring the world trying to buy DP stuff.. But that's just my guess. Also, Landquart uses a lot of cotton to make banknotes, so lower cotton prices will be good for it. Link to comment Share on other sites More sharing options...
bathtime Posted December 2, 2011 Share Posted December 2, 2011 Anyone have access to TD research? FTP update today is on the home page: https://www.tdsresearch.com/equities/welcome.action Visible excerpt begins: ----- (FTP-T) Thurso Conversion is Imminent; DP Prices Under Pressure 12/02/2011 Sean Steuart Yesterday, Fortress Paper hosted sell-side analysts and investors for management presentations and a tour of the company's Thurso, Quebec pulp mill. The tour and presentations give us no reason to question previous assumptions regarding the expected... ----- I also believe they reduced the price target from $40 to $37. Link to comment Share on other sites More sharing options...
Liberty Posted December 2, 2011 Author Share Posted December 2, 2011 Personally, I think this is a major overreaction. If all went to hell, FTP could probably earn at least $5/share in 2012. Link to comment Share on other sites More sharing options...
bathtime Posted December 2, 2011 Share Posted December 2, 2011 I don't think this has been posted here yet. Chad presents at an investment forum in October: http://standrewsclubav.ca/login.php Username and password are both "tpc". Chad speaks at around the 35 minute mark. Link to comment Share on other sites More sharing options...
Liberty Posted December 2, 2011 Author Share Posted December 2, 2011 Thanks! I had seen that, but didn't have the login/pass. Link to comment Share on other sites More sharing options...
AZ_Value Posted December 2, 2011 Share Posted December 2, 2011 I don't think this has been posted here yet. Chad presents at an investment forum in October: http://standrewsclubav.ca/login.php Username and password are both "tpc". Chad speaks at around the 35 minute mark. Thanks a lot for posting this. Link to comment Share on other sites More sharing options...
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