Thank you, Mr. Chair.
Hello. I would like to thank the committee for inviting me here to take part in the study of the renewal of Canada's forest industry and to share some thoughts on today's topic, strategic innovation.
Kruger Inc. is a third-generation family business headquartered in Montreal. The company has over 5,000 employees in Canada and the United States, although most of our employees are in Canada.
Ever since it was created in 1904, Kruger Inc. has distinguished itself internationally by reinventing itself over the years and positioning itself as a leader in the industry sectors in which it operates.
The company has built a solid reputation around the world in traditional sectors such as pulp and paper, lumber and wood products, residential and commercial tissue products, as well as containerboard and packaging.
Kruger Inc. is also a major player in renewable energy, recycling and biomaterials. In addition to that, we are also active in the wine and spirits sector, which has nothing to do with the forestry industry.
I'd like to take a few minutes to talk about the importance of R and D, or research and development, for the industry in Canada.
Kruger believes that major investment in research and development to develop new technologies and products is essential, if we are to succeed in transforming the Canadian forest industry. Similar investments are also needed to modernize mills and/or build new facilities that will make use of these emerging technologies at the commercial level.
One example of the benefits of such investments has been the creation of the world's only cellulose filament demonstration plant, located in Trois-Rivières and developed by Kruger in partnership with FPInnovations. The plant, which was dedicated in June 2014, operates on a simple and efficient chemical-free process that involves mechanically peeling the filament from wood fibres.
Cellulose filament is a new material extracted from wood pulp that is revolutionary because of its unique property that it is in fact a powerful strengthening agent. It has major potential for Canada's forest sector because of its wide range of applications in the traditional sector of pulp and paper, but also in all kinds of products outside the pulp and paper world. This is really a game-changing technology. Thanks to the Trois-Rivières plant, Canada is now at the pole position of global competition to develop this technology as well as new applications of cellulose-based materials that will be used in products for everyday life.
As an example, there are all kinds of applications in composite materials and plastics. The characteristic of this product as an additive is to increase strength, so that for a given piece of manufacturing product, you can use less raw material and reduce weight. You get the picture of the impact. It could go into all of the automotive industry and everywhere where weight is an issue.
This project includes a $25-million research and development program to support the industrial scale-up, jointly with industries and/or companies that could benefit from including cellulose filament in their products.
This groundbreaking research and innovation project represents a total investment of $43 million. It's a three-year program. This includes funding from the Government of Canada through the IFIT program. I take the opportunity to thank NRCan, who believed in us from day one, for their support, as well as the financial support from the Government of Quebec, the Government of British Columbia, Kruger, and FPInnovations.
I also want to talk about the role of government in the process of the renewal of the forest industry.
We can't stress enough the importance of support for this kind of strategic innovation in the forest industry. Government support for the development and deployment of these technologies is crucial.
Canada must continue to lead the way in developing a reliable, sustainable source of fibres at competitive prices for its industry. In order to achieve that, forestry research is crucial.
One of the biggest challenges we are facing, particularly in today's newsprint industry, is developing R&D projects in a declining market with very limited means. It is therefore important for governments to ensure that we have access to the necessary resources to allow Canada’s newsprint industry to make whatever transition it needs to make in order to survive.
As you know, there has been a sharp decline in the demand for newsprint around the world, and competition is fierce in the marketplace, which is why paper mills need to continuously adapt and compete in order to survive. Our industry is committed to doing just that, but it will be impossible for us to do so without government investments and policies that, fortunately, have been contributing to the renewal of the industry for several years now. This kind of support from various levels of government is essential to the sustainable growth of Canada's forest industry and its future viability.
I would like to thank you once again for giving us the opportunity to speak before your committee.