MONTREAL - Resolute Forest Products Inc. says it will spend $27 million to add a plant to produce cellulose filaments at its Kenogami paper mill in Quebec.

It says it will also spend $11 million to modernize equipment to produce high-grade SCA+ supercalendered paper (used in newspaper flyers), allowing the mill to access more favourable markets, for a total cost of $38 million.

CEO Yves Laflamme says the investments will create synergies in its network of operations in Saguenay-Lac-Saint-Jean.

Cellulose filaments, derived from wood fibre that is mechanically processed, are a reinforcing agent that can be integrated into commercial and consumer products in industries including transportation, construction and energy to increase their durability.

The filaments extraction technology was developed by research and development centre FPInnovations Inc. The project will be funded in part by $2.5 million from Quebec's Department of Forests, Wildlife and Parks, $4.2 million from Investissement Quebec and $4.9 million from Natural Resources Canada.

The company says the cellulose filaments project will create eight jobs in addition to the current 200 at the mill in the startup phase in 2021 and a total of 23 jobs once the plant reaches its full production capacity of 21 metric tons per day.

The mill has a production capacity of 133,000 metric tons of specialty papers per year.

This report by The Canadian Press was first published Jan. 15, 2020.

Companies in this story: (TSX:RFP)

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