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

Alongside the soaring price of cotton and rayon-sparked by voracious demand in China-the price of dissolving pulp has nearly quadrupled in the past two years. Bay Street, inclined to ignore forestry of late, has started to pay attention. Brokerages such as Raymond James and Dundee Securities-which were the main backers of a $58-million share offering in February to bolster Fortress's balance sheet-are evangelical about Wasilenkoff. The stock has moved from $15 in March, 2010, at the time of the Quebec deal, to more than $60, although it fell recently to as low as $50. Raymond James analyst Daryl Swetlishoff predicted the price would rise to at least $75 if Wasilenkoff scores more deals. Other analysts are more measured. RBC in January called Fortress a "compelling growth story" but "fully valued." TD also liked the Fortress story, admitting it had underestimated the potential of dissolving pulp, but in February warned of additional supply drowning demand: "Nothing kills good prices like good prices."

Whittall waves it off. "It's Canadian in the psyche to wonder about when it's going to come off the rails."

Irwin Michael, the veteran deep-value investor, found a kindred spirit in Wasilenkoff. Michael was the largest investor in the 2007 IPO and calls it the best buy he's ever made. "He's made a heck of a name for himself. Next time he wants to do something, people will give him a blank cheque."


Wasilenkoff may have worn suits in high school, but today he rarely wears a tie, even to his own board meetings; more likely, he sports Converse sneakers. His favourite toy is a Ferrari 360, but otherwise his instinct is bare bones, a beer-and-wings guy. The Fortress head office in North Vancouver sits atop a McDonald's and houses a mere five people (three of them accountants).

And a press interview is something Wasilenkoff conducts at his West Vancouver pile over a couple of beers. He's convinced the deals he has on the go could make Fortress a $300 stock and a $4-billion company-from an $8-million company in 2006. His outlook is wildly bullish but aired without the promotional fervour of Vancouver's Howe Street. "It won't be this year, but by the end of next year. It's a very clear runway."

At this point, Wasilenkoff's four-year-old son, Titan, wanders in. It's early Sunday evening, his dad has been away for a week and Titan wants to play. Wasilenkoff apologizes-he's busy, working. The young father worries he hasn't taught Titan how to make a paper airplane. They haven't tossed around a baseball. "I really feel I'm missing out." But Wasilenkoff's addicted to ramping up his company. He can't say no-and the game is finally really on. "The deals are getting bigger and better and easier."

The trader has embraced building. On a visit to his Quebec operation, a mill revived in a town that was otherwise doomed, a worker in his 50s embraced Wasilenkoff and thanked him.

"It's become a big part of the driving force of growing this company, to see if we can turn around some other mill towns that are dead, put thousands of people back to work. Several of the mills I'm looking at buying have been shut down for three or four years. At one of them, we're the only people looking. Otherwise, a bulldozer's going through."

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  • Fortress Paper Ltd
  • Updated July 25 11:33 AM EDT. Delayed by at least 15 minutes.

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