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Moncton's Caledonia Industrial Estates Home To New Diaper Products Plant

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Moncton's Caledonia Industrial Estates is adding a new light manufacturing plant to its growing roster of global manufacturing and distribution companies with the announcement of the proposed June 2004 opening of a baby diaper and training pant manufacturing plant.

Irving Tissue (http://www.majesta.com/tour.htm), CEO Robert Irving in announcing the new company's plant construction, said that the new operation, which will use innovative, state-of-the-art technology with three initial production lines, marks another important milestone in his family's diverse business interests.

The announced construction cost of the plant is $60 million and is being sited for potential expansion on a 30-acre lot footprint that is located in the northwest corner of the steadily expanding Caledonia Industrial Estates. Caledonia Industrial Estates is located along the north side the Trans Canada Highway, Route 2, in the City of Moncton's northeastern corner. Company officials say that the new plant will initially employ 105 skilled workers operating three production unit lines.

In the September, 2003 announcement, CEO Irving said that the new company would be the only Canadian firm producing diapers. He said that he expects to get strong interest from major North American retailers looking for a private-label diaper manufacturer. Irving Tissue already makes private-label tissue products for a number of large retailers.

Company officials project that the three lines are to produce three million cases of diapers with an average of 24 units per case, resulting in up to 72 million diapers being produced annually at Canada's only production plant of its kind. Site preparation is underway and the company has targeted June, of 2004, for the official opening of the plant for production purposes.

The personal care products plant is the first development for the new company and product line to be sold under the Irving Personal Care Limited name. The company's public information statement projects the plant to generate an annual payroll of $9 million and employ over a hundred trades people during the construction phase.

Mr. Irving and the corporate Irving family have extensive business interests in the Moncton area including: Midland Transport (http://www.midlandtransport.com/): Irving Tissue, with the Majesta product lines (http://www.majesta.com/profile.htm); Master Packaging; and a popular local hockey team, the Moncton Wildcats (http://www.moncton-wildcats.com/main.htm), as well as the extensive J.D Irving Limited holdings (http://www.jdirving.com/), in New Brunswick.

During the announcement ceremony, company CEO Irving said that the new plant in Caledonia Industrial Estates would place Metro Moncton as a major player in the production and marketing of diapers and training pants across North America. He also hinted that North America might just be the start. "Canada and the United States are the two markets we're focusing on coming out of production from day one," said Irving.

"In the U.S., there is only one producer of private-label brands. The demand for personal hygiene products is consistent throughout the year and high volume," Mr. Irving said, noting the plant should create a great deal of spin-off revenues and business for other companies.

"Irving Personal Care Ltd. is a strategic extension of our current line of tissue products, and allows us to grow our one-stop shopping relationships with leading North American retailers."

"Greater Moncton has an excellent workforce that allows us to provide superior service to our customers," says Irving.

The market for diaper product and the training pants component is a huge worldwide business according to an industry study released in January of 2003, which identifies the lifestyle and consumer forces driving the demand for the products to be produced in the new facility. The study calculates in the total global market in the 100 billion category. http://www.nonwovens-industry.com/January031.htm

Preparation for the plant's production operation is already well under way and a management team is being assembled. Ms. Chris Oliver, an executive who had been working for the Irving companies in Toronto, has already been hired as the company's general manager. An Irving company spokesperson, Mary Keith, Director of Communications for J.D. Irving Limited says that Ms Oliver is working through the fall of 2003 hiring administrative staff and will oversee the rest of the hiring, including factory workers as well as sales people while the construction phase is underway.

The company projects that training will begin in January to prepare for a June start-up and all 105 jobs will be based in Moncton. Sales offices across Canada and the U.S. will take advantage of existing sales staff for other tissue products, to promote the Irving's 'one-stop shopping' concept for retailers.

"The intent is to get the plant up and running at full capacity, hopefully within three to five years, and at that time, based on the demand, we'll look at expanding further" said Mr. Irving. "Any time you build a factory you have to look to the future, and as we have with our other facilities here in Greater Moncton you build with intent to expand. So, we've got lots of acres there to make additions to the building."

Caledonia Industrial Estates was recently expanded by Moncton Industrial Development (MID), the municipal development agency that also manages the Moncton Industrial Park, in Moncton's west end. MID has some 600 acres under development within Caledonia Industrial Estates with a further 800 plus acres in reserve for future expansion.

CEO Irving envisions a broad and growing potential for the new manufacturing concern.

"Speculation is that in addition to seeking new geographical markets, the company will also move into adult products as the Baby Boom generation settles into its senior years". During his remarks, Irving frequently referred to the "growth" and "potential" in describing the global market conditions enjoyed by the new company's product line.

He explained to the assembled civic leaders and Irving Tissue plant workers that with only one major United States-based diaper maker currently operating on the continent and with the Canadian field completely clear, the new company intends to aggressively distribute the new products over a wide area of continental and possibly global markets.

The existing Irving owned tissue plant manufactures bathroom paper, paper towels and other products for its own Majesta brand as well as the Royale brand. The tissue plant was launched 13 years ago with 28 factory workers, Irving recalled and is now employing up to 200 personnel as well as 50 administrative/professional staff at the company's head office.

Subsequent to Irving Tissue's launch, five years ago Master Packaging, which produces cardboard containers was established in the Moncton area to develop new, value-added pulp products and is located beside the tissue facility. During the 2003 construction season the Master Packaging plant was also expanded to increase capacity to meet growing sales demand in what the company suggests is a model for effective business development and expansion for the new plant.

The Province of New Brunswick is assisting the launch of the new company and manufacturing facility with an announced $35-million loan guarantee, which was made by Premier Bernard Lord during the announcement ceremonies. The province is providing the company with $35 million in loan guarantees related to the debt financing and working capital needed for the project.

"We're providing loan guarantees, the only risk to us is if the project fails," Mr. Lord said, adding that while the Irvings have money, much of it is tied up in other projects and investments so the guarantees, which will run for 12 years, only help them secure working capital.

"I believe the government of New Brunswick has made the right decision in supporting this project. This is a company that's had a lot of success."

Premier Lord said that the new manufacturing project represented, "a major investment in this community. Our hope is that this will lead to other value-added manufacturing jobs both in the city and elsewhere in the province." He said that the new project would only help diversify the region's economy and "transforms New Brunswick into an investment magnet and a gateway for trade.

"The Irving Empire has brought a lot of innovation to our province. This is great news for New Brunswick and great news for Moncton. It's also certainly very big news for the Irving Company."

For more information regarding the Province of New Brunswick's Business New Brunswick, follow this link http://www.gnb.ca/cnb/news/bnb/2003e0787bn.htm . For additional information regarding this project and the J.D. Irving Limited company's press release for the Irving Personal Care announcement click on this link. http://198.73.126.20/default.asp?action=news-article&id=279

October, 2003

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