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How Fortress Paper became a TSX star Add to ...

Wasilenkoff himself professes that there is no guile in his taciturn style. "I'm reluctant to add my two cents unless it's valuable," he says. "It's the way I've always done business. I like to be the dumbest guy in the room."

In his first years as a broker in the late 1990s, Wasilenkoff took several hard hits on junior gold (it was the time of Bre-X) and then in ephemeral tech stocks. He blames himself for having followed the advice of Canaccord analysts too closely. Chastened, he started to do his own research and build his own deals. He asked "a million questions" of industry veterans and memorized the rule book for upstart ideas, the TSX's Capital Pool Company program. "I read it so many times," says Wasilenkoff. "I could have quoted section 3.8.2: 'It says this and that's why we're doing it this way.'"

Wasilenkoff pivoted to a school of thought that was out of favour at the time: deep-value investing. And as he became successful at it, his contrarian soul was tickled to the core. His first big deal after quitting his job at Canaccord was in gold, when the yellow metal was still in its decades-long bear market. The creation of Dynasty Metals & Mining in 2003 was Wasilenkoff's first score.

His attention then turned to uranium, another out-of-favour commodity. Wasilenkoff didn't know much about the stuff, so he cold-called a world expert. That was the start of a two-week instant education that convinced Wasilenkoff uranium's price would be rising. The plan, as with Dynasty, was for Wasilenkoff to structure a small company and attract investors-but not be directly involved in management himself. But at Titan Uranium, the 32-year-old dealmaker ended up as CEO.

As of 2006, Titan had properties but no mines in production. But then Wasilenkoff got nervous when uranium prices not only rose but spiked. Deals at reasonable prices evaporated, and he sensed a bubble (he was right) and wanted out. He stepped aside. "I was doing the company a disservice by remaining on as CEO, when I didn't believe in the future prospects," says Wasilenkoff. "I didn't think if the price was going to crash, it was when."

Wasilenkoff had been casting an eye to forestry. As a side gig while running Titan, he and a group of investors bought two underperforming paper mills in Switzerland and Germany from Vancouver's Mercer International. Two months after he left Titan, Wasilenkoff had Fortress in business.

Wasilenkoff, already a multimillionaire when he founded the company, was entering a new period. He was becoming a builder, not just a broker making deals. After a due-diligence visit to the wallpaper mill in Germany, Wasilenkoff had tossed and turned at night more than ever. "I have a lot of confidence," he says. "I'm not really scared. I'm thinking: 'Let's go.' But after touring the mill, I thought, 'Okay, this is a big facility. A lot of people work here. Better not screw this up.'"

To avoid botching the biggest move he'd ever made-in which he sank $2 million of his own money, a quarter of the purchase price-Wasilenkoff quickly replaced management and brought on a veteran paper mill operator, Alfonso Ciotola. The assets were whipped into shape.

The mill near Dresden made non-woven wallpaper, which is easier to put up and remove than regular wallpaper. The operation has been a major success: The mill's share of the global market has doubled to 50% since the purchase, generating most of Fortress's profit (a share that will change with the addition of dissolving pulp to the mix). At Wasilenkoff's prompting, the mill is now developing "energy-saving" wallpaper that retains heat.

The Swiss mill was the one that first garnered attention for Fortress. The security paper business is an old and insular industry populated by a small number of companies, led by United Kingdom-based De La Rue. Fortress's mill in the postcard-pretty town of Landqart has been the sole provider of banknote paper for the Swiss franc for three decades; it also produces the euro for 10 countries.

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