AbitibiBowater Inc. intends to shake up its old-economy business with an array of new, environmentally friendly enterprises once it emerges from bankruptcy protection, says president and chief executive officer David Paterson.
The company, long synonymous with newsprint but facing a shrinking market for its primary product, intends to look to emerging green sectors, such as alternative energy and biofuels, for its future growth.
"We've got a series of things we'd like to do," Mr. Paterson said in an interview Tuesday as the company puts the final touches on its plan to emerge from court-ordered bankruptcy protection in the United States in the next few weeks.
Among projects being explored by the Montreal-based company are significant investments in biomass energy production, he said, as well as boosting recycled content and increasing the efficiency of its power generation.
"The idea is to change the product mix but not shrink the company."
Seth Kursman, the company's vice-president of public affairs, sustainability and environment, said Abitibi can't divulge much detail about its plans to invest in biofuels and other green-energy businesses until the restructuring plan and exit from bankruptcy protection are completed and the board has been informed of the new projects.
"Green energy is something we are interested in expanding, but we are still a paper products company," he said.
Abitibi has reduced its exposure to newsprint to less than 40 per cent from more than 50 per cent of sales over the past few years and it continues to identify new products – such as varieties of high-quality printing papers – to add to its mix, he said.
"Certainly, Abitibi intends on being more active on the green energy side."
Mr. Paterson said one area with strong potential is biofuel, such as ethanol produced from wood byproducts. "We have the people and the resources, but not the technology, so we're talking to different people about partnerships."
Abitibi is also looking to boost the amount of recycled content it produces by using less virgin fibre per unit of output so that a sheet of paper, for instance, would be lighter and less dense, Mr. Paterson said.
On the energy front, the company is pushing ahead with plans to add more efficiency measures to its power-generation facilities, including cogeneration, he added.
Mr. Paterson plans to make a presentation to the board on the new directions for the company once it exits bankruptcy protection.
Abitibi got the green light for its reorganization plan from a Delaware bankruptcy court on Monday.
The plan has won approval in Canadian bankruptcy court as well.
The company was hit hard by the global recession as well as a dramatic drop in demand for newsprint in North America. It filed for bankruptcy protection in April, 2009.
AbitibiBowater was created in 2007 from the merger of Abitibi-Consolidated Inc. of Montreal and Bowater Inc. of Greenville, S.C., which combined forces to better meet the challenge of declining markets.
Bertrand Marotte