Fortress Paper (TSE:FTP) share droped from 63 to 49$ per share in the last month. Why? I actually do not know for sure. One catalyst was the conversion of 7000000$ loan to 350000 share diluting FTP equity. But these shares were considered in ou previous analyst.
Anyhow, Times magasine journalist Alexandra Frean wrote on Jan 26th that Chad (FTP CEO and majority shareholder) “[…]wants to buy another two or three such mills by the end of the year”.
Another article from Fortress Specialty Cellulose blog :
“We’re betting on this as a multi–decade phenomenon,” he says, predicting that after the current spike (spot prices have risen as high as US$2,600 a tonne) dissolving pulp will settle out at around $1,800. The rebuilt Thurso mill, producing 200,000 tonnes annually, will break even at $600, he says. Fortress bought the mill from Fraser Papers last year for $1.2 million and is investing $170 million turning it into a dissolving–pulp producer by the end of this year. Wasilenkoff estimates there are a dozen other pulp mills worldwide, including four or five in Canada, suitable for conversion to specialty cellulose, and Fortress expects to acquire more. “There needs to be another one and a half Thursos every year,” he says, to meet global demand at current prices.
That could be incredible news for FTP shareholders!
I’ll keep you posted.