Tissue World Magazine

Canadian manufacturer Kruger Products has posted an increase in its 1Q 2013 revenue after it completed the construction phase of its TAD project.

It reported revenue of $221.8 million, up 2.6% year over year. The figure was positively impacted by volume and mix increases mainly from five additional days of sales.
The increase was also driven by increases in consumer and AfH segment revenues.

Earlier this year, Kruger Products finished the construction phase of its $322 million new through-air-dried (TAD) tissue machine project at its Memphis, TN, mill.

When fully optimised, the new TAD tissue machine is expected to increase the company’s production capacity by approximately 20%, or 60,000tpy.

Chief executive Mario Gosselin said: “We are carrying out our strategy to gradually ramp up TAD product sales in 2013 which should generate positive EBITDA for the year as a whole.

“We have benefited from additional days of sales in the quarter and solid growth in the US business.”

He added that this was partly offset by the decision to cease production of parent rolls for sale last year.
“While our private label revenue was strong, sales in our Canadian branded business were somewhat soft in Q1 primarily due to the timing of our promotional activities. We expect revenue to improve in Q2 and Q1.”

EBITDA for the quarter was $25.1 million, a decrease of 7.8% year over year, but an increase compared to the EBITDA the company recorded in the 4Q of 2012.

Gosselin said: “Q1 EBITDA benefited year-over-year from the business realisation programme we implemented last year along with reduced management fees.

“These gains were impacted by start-up costs for the TAD project and higher fire and energy costs. In addition, our AfH segment EBITDA returned to a more normalised level in the first quarter.

“We look ahead to the rest of 2013 with confidence in our business model considering the positioning of our brands and the strong initial reaction of customers to our TAD products in the premium private label market.”

Kruger Products is a Canadian manufacturer of quality tissue products for household, industrial and commercial use.