BC Business
Chad Wasilenkoff, Fortress Paper Ltd. | BCBusiness
Chadwick Wasilenkoff is not your typical forestry CEO. Rather than work his way up the corporate ladder, the 41-year-old top executive at Fortress Paper Ltd. created the company from scratch. He got Fortress off the ground in 2006 by putting together a group of investors that bought two European paper mills. And these were not your typical mills: one specialized in security paper used in bank notes and the other in the material used in wallpaper. Fortress later bought a failing paper mill in Quebec and converted it to produce a cellulose product used to make rayon. A consummate deal-maker, the former investment adviser thrives on seizing opportunities others shy away from and going all in. BCBusiness recently caught up with him by phone when he was in California, en route to Montreal.
How much of your time do you spend on the road? My assistant tells me in June I did almost 100,000 miles; July was about 70,000 miles. But I do have some months where I try to stay closer to home for longer stretches. Overall, it’s probably over six months a year I’m on the road or away from the family. It’s a challenge, but we’re a growth-oriented company so wherever we find opportunities we know we have to jump and move fast.
Do you see yourself keeping up this pace indefinitely, or do you plan on slowing down someday?I find the deals are getting bigger, better, more complex and require more effort, but that’s what I like. I actually tried to retire a couple of times and it just didn’t take. I was not very good at sitting on my hands. My time with Fortress Paper has an expiry date but it’s ever-moving; as long as I can keep finding new and interesting projects within this industry or this sector then I want to keep going.
The safe bet would be to buy an existing business and tweak it or grow it incrementally. With the conversion of your Quebec mill, for example, Fortress has invested millions in completely reinventing a business. Would you describe yourself as a risk-taker? While others might view everything I try to put together as high-risk or doing something challenging or outside the box, I view myself as one of the most conservative investors out there. I try to find opportunities at pennies on the dollar. The previous owners who spent billions of dollars to build these new mills out in the middle of the forest somewhere—that would be a big risk. But we get to come in with a lot of leverage and create more leverage from all the different players that have a vested interest in the project—whether it’s the unions because they want to try to save the jobs, or government, with granting of wood or fibre, or putting in long-term contracts with the rail lines. And we buy mills, like our last one in Quebec, at deep discounts to replacement cost. Arguably it’s a billion-and-a-half-dollar pulp mill, and we paid one dollar for it. So I view the things I try to put together as very low-risk.
Was the sale of the Dresden mill earlier this year difficult for you personally, given that buying it in 2006 was the opportunity that got Fortress Paper off the ground? It was. The people there who ran it were absolutely spectacular. It was constantly getting a monthly report with a positive surprise—they fixed a problem, they brought the cost down, they increased capacity, they never missed a target, they were constantly beating targets. It was one of the best investments and opportunities I’ve ever been part of and experienced. I wish I could find 10 more of them.
How did your background as an investment adviser lead to a career as a deal-maker? I was definitely not your typical investment adviser. What interested me were the guys who were taking companies public, finding private assets and building management teams around them. So with a couple of very large successes in putting together some of these deals, I quickly got out of the investment advising side of things. So I was building these companies, and I wanted to own more than 10 per cent and be on the board of directors, so even while I was at Canaccord I was just continuing to do what I do now, just getting to larger scale.
Would your friends and family describe you as a stress junkie? I don’t know that they’d say “stress junkie,” but “not normal” would be a way to describe it. I generally don’t sleep. People from the office and friends say, “What are you doing emailing me at 2 and 3 and 4 in the morning? What time zone are you in?” I say, “Well, I’m in your time zone.” I’m always working on something. It’s not stress I look for, but it’s the complexity, the challenge. It’s a lot less about the money now, or even winning or anything like that. It’s just seeing what can be accomplished. It’s creating jobs in places that have bleak futures—some of these forestry opportunities are a mill that people have said will never turn on again and there are thousands of people in the region out of work. It’s good to be making money along the way, but it’s great to have that kind of influence in a region.