April 07, 2020
BANGOR DAILY NEWS (BANGOR, MAINE

Bowater Inc. may expand> Stake in Korea mill possible

GREENVILLE, S.C. — Bowater Inc. confirmed it is in talks to buy a stake in a newsprint mill in Korea, as it seeks a low-priced investment amid Southeast Asia’s economic turmoil.

Greenville, S.C.-based Bowater, the largest U.S. maker of newsprint, is betting that Asia’s economic problems will be temporary and demand for newsprint will rebound in Asia. The company, which owns five paper mills and 3.6 million acres of timberlands in the United States and Canada, believes a Korean investment will be cheaper than one in North America, analysts said.

Two of Bowater’s U.S. mills are in Maine, one in Millinocket and the other in East Millinocket.

“Long-term forecasts for consumption in Asia are very strong, despite the near-term slowdown in growth,” said Bowater spokeswoman Deborah Humphrey. “We want to take advantage of the opportunity.”

The mill in question is owned by Halla Pulp and Paper Co. and is in Daebul, near the city of Mokpo. The mill started in 1996 and is one of Korea’s top three papermakers, with a production capcity of 250,000 tons. Its parent, Halla Group, was declared bankrupt by its creditors Dec. 6 after it failed to repay 241 billion won ($215 million) of debt.

“You have a distressed seller and the currency is weak,” said Mark Wilde at BT Alex Brown Inc. “If you are buying with dollars, it’s not a bad time to be bottom-fishing.”

Halla Group, which also is involved in industries ranging from auto parts to shipbuilding to construction, had debts of at least 6.5 trillion won, making Halla the second-largest corporate failure in Korea’s history.

On Dec. 22, Halla Group said it was in talks with Bowater to sell part of its stake in Halla Pulp & Paper.


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