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Rayonier Advanced Materials is acquiring Tembec because it likes our business!

Dany Gagnon
June 20, 2017

I have answered many questions from employees here at Temiscaming since Rayonier Advanced Materials announced on May 25 its intention to acquire Tembec.  Two of these questions keep recurring, so I thought job-hunters would like to know what I have been saying in response. And I have added other thoughts regarding the acquisition and the road ahead.

In general, I am finding Temiscaming employees are, “cautiously positive” about the acquisition, which is a very good sign.

Question 1: What will change for us day-to-day?

First, it is everyday business as usual for the short term, because the transaction is not expected to close until late 2017.

I do not know what will happen after the closing, but I believe our day-to-day work will be similar to what it is now. That is because Rayonier Advanced Materials (RYAM) has announced it intends to continue operating all Tembec sites.   This should be reassuring for employees and for job-hunters – we have important jobs to fill and we need good people.

For now, we will continue to push ahead with our transformation program here at Temiscaming, focused on increasing efficiency and productivity, and on reducing costs.

RYAM has announced cost reduction programs in the past and has a history of investing in its operations. It also has a strong focus on operational excellence and continuous improvement. So, their people may have some operational tips that I will be very happy to use in our transformation, because RYAM is the world leader in its field.

And we will also continue planning our investment program to improve the competitiveness of our Québec operations. RYAM has announced it wants to continue with the investments Tembec has planned in Québec, and in Ontario as well, and even to accelerate some of these projects, because that will make these assets more productive.  That’s good business.

I think all this is great news for Tembec, for employees, and for our local communities.  RYAM wants to grow the business, and it has the financial strength to do it.

Question 2:  What will happen to the Tembec name?

Again, I do not know the answer. This is not the time to talk about it, because any decision about the name will be in the hands of Rayonier Advanced Materials.

Rayonier Advanced Materials and Tembec are a good fit

RYAM, which has a great reputation, is making the acquisition because it likes our business. This includes our assets, our expertise, and our reputation for making good products. This is a friendly acquisition, designed to create a stronger combined company.

RYAM is the world leader in specialty cellulose (it uses the term ‘cellulose specialties’) and we are the second leading producer in that industry. The two organizations are complementary.

Tembec’s strength is in high viscosity specialty cellulose products for the cellulose ethers market, while RYAM’s strength is in high purity products for the cellulose acetate market.  And we can benefit from their R&D team, just as they will benefit from our R&D team, because the two have different areas of expertise.

RYAM’s high purity cellulose specialties are used as components of food products like sausage casings, and the coatings for LCD displays on computer screens.  Tembec is not in those markets, so we will have a chance to learn.

Professionally and personally, I am looking on the bright side

I said to one group here about the acquisition: “Would you prefer to be part of a financially strong company committed to growth, with a history of operational excellence, and with broad exposure to different currencies?  Or would you prefer to be with a company that has a lot of debt, and has a lot of work to do to do all on its own to become more competitive, and is highly exposed to the fortunes of the Canadian dollar?

Well, the first company is RYAM and Tembec combined. The second company is Tembec as it is today. I think the best choice for a strong future is very clear.

I joined Tembec because I liked the challenge of transforming the Temiscaming site. I still like that challenge, and I like it even more now that we will be in business with RYAM which is a world leader, with great operations and deep expertise.  And this leader likes our business enough to acquire it!

About Dany Gagnon

Dany GagnonDany, who joined Tembec in September 2015 with a mandate to lead the transformation, is building on his success leading change management programs in the automotive, brewing and agri-food industries. He is a mechanical engineer with a specialization in aeronautics and has a certification in process management. His global perspective reflects his experience working in the US, Asia and Europe, as well as Canada.

Temiscaming site, in brief

  • One of the largest forest products manufacturing sites in North America.
  • 800 site employees – 80% unionized under one collective agreement / 20% staff.
  • Three main mills that manufacture different forest products: specialty cellulose, high-yield pulp and coated bleached board (containerboard); and a chemical products facility.

Temiscaming transformation

The objective is to make Temiscaming a highly-competitive world-class operation for the long term. This will enable us to meet customer expectations for quality and reliability, as well as community expectations for sustainability, while ensuring profitability for Tembec.