Kafus regrouping businesses...Canfibre to be included in Forest Products unit. The following are excerpted from McCabe's review to shareholders, released today:
"In order for Kafus to be better understood on Wall Street and in other
global financial centers, we are currently simplifying and realigning our
various operating subsidiaries into specific industrial sectors. This will allow
us to independently finance growth and development within each of
those sectors and permit each of those sectors to align with major
strategic, industrial players to further enhance growth and cash flow. Our
regrouping is as follows:
Forest Products Without Trees
We are currently forming a new business unit into which we intend to roll
our current 85.5% ownership of the CanFibre Group; Kafus' ownership of
non-North American rights to AllGreen© MDF development; a 90%
ownership of Kenaf Paper Manufacturing and its Lasara newsprint
project; our current development program to produce AllGreen© OSB from
bark; our recent acquisition of Kafus Molded Fibers and its current
development program of producing molded structural board from pulp mill
residue; and our current interest in Fortra Fiber Cement. As a result of this
regrouping, the new operating unit will have the rare distinction of being a
global forest products' company without trees. As such, it can now be
identified by specific industry analysts and offers the potential to build
strategic relationships within and/or independent financing from the forest
products' sector. "
Further, his comments on Riverside:
"We believe the startup of our Riverside facility was hampered by a delay
and ultimate failure to complete the construction of the facility by its prime
contractor, Stone & Webster Engineering Corporation. Ultimately, CanFibre
of Riverside decided to terminate their contract and assume control of the
facility in January of 2000. CanFibre of Riverside is currently pursuing its
claims in excess of $45 million against the contractor in arbitration
proceedings. We intend to pursue these claims aggressively.
On the brighter side, since taking over control of the Riverside plant,
CanFibre of Riverside has made tremendous strides in completing the
facility, proof of the depth of abilities of our plant management and
support staff at Riverside. 1999 saw the initial shipments of CanFibre's
AllGreen© MDF as a UL certified fire-retardant board. We received
environmental certifications from Forest Stewardship Council and Scientific
Certification Systems for AllGreen© MDF's 100% recycled content and zero
incremental formaldehyde emissions. In early 2000 we commenced
shipments of our AllGreen© board to Home Depot for sale in up to 204
stores in the nine state western region. This relationship with Home Depot
is expected to grow significantly over the next 12 months with the
introduction of AllGreen© medium density fiberboard to Home Depot
stores in the Eastern United States from our second CanFibre plant
nearing completion in Lackawanna, New York.
All of the design and engineering lessons learned at Riverside are being
applied to the CanFibre Lackawanna facility. We anticipate that our
second AllGreen© MDF plant will be generating revenues shortly after
startup in third quarter 2000. "
Thanks Mike. $45 million in arbitration vs. S&W...and our relationship with them at Lackawanna is ongoing?...hmmm.
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