Kruger Products is delaying its planned Through-Air-Dried (TAD) tissue facility in the United States, with the project no longer expected to commence operations in 2028 as previously anticipated. The company is deferring its final location decision until there is greater certainty in the economic and trade environment.

The update was announced by Kruger Products CEO Dino Bianco alongside the company's third-quarter 2026 results on November 11. Bianco said the company continues to make progress on the project but is taking additional time before committing to a final location.

Project Preparations Continue

During the Q3 earnings call, Bianco clarified that the project has not been stopped and that preparatory work is continuing. "We have not stopped the project. We're still investing," he said, pointing to engineering work, ongoing discussions with the local community, "locking down incentives and understanding the dynamics of that community."

The company is also working with its banking partners to assess potential financing arrangements. "We're working with our banks and debt, trying to understand what the debt structure can look like. So work is being done," Bianco added.

He confirmed that the company's preferred location remains in the western United States, consistent with the original announcement, although alternative sites are being considered. "I would say our prime location stays true to the initial announcement of Western United States," he said, adding that Kruger Products has other sites under consideration "as backup, just in case."

Economic and Trade Uncertainty Weigh on Timing

Explaining the decision to defer the location commitment, Bianco pointed to uncertainty surrounding market conditions, tariffs and cross-border trade between Canada and the United States. "When you spend the level of investment that needs to be made for a project of this size, you need to have security in terms of the outlook in the market," he said.

He also called for greater clarity on trade conditions between the two countries. "I'm hoping we get some clarity on what is the trade environment going to be from Canada to the U.S. and U.S. into Canada," he said.

Bianco further highlighted rising steel, labor, transportation and piping costs, noting that changes in these inputs could affect the project's economics. "You can imagine the sensitivities around input costs to a large project like this could change the economics," he said.

Describing the company's approach, Bianco explained that Kruger Products had decided to slow down the project until greater clarity emerges. "We just felt it was the right decision to just pause. I wouldn't say pause, but slow it down, take a more determined approach until we get a little more clarity," he said.

Existing Investments Support Capacity Growth

While the new facility is delayed, Kruger Products continues to invest in its existing manufacturing network to support tissue production and growth in North America.

These investments include capacity expansion and operational improvements at its Sherbrooke, Quebec, and Memphis, Tennessee, facilities, as well as upgrades to existing TAD assets.

The company has not announced a revised start-up date for the proposed US facility. Its continued engineering and development work indicates that the project remains under consideration, with the timing of the final location decision dependent on greater certainty around project economics and trade conditions.