The Gazette from Montreal, Quebec, Canada • 38

IE 3118.S1 6UT TSE 6144.25 69.47 DOW 63S5.2S 1 LONDON (100) 4214.80 40.00 HONG KONG 12743.14 25184 TOKYO 18343.82 589.34 MEXICO 3827.33 18X3 1 GOLD in I $350.40 $2.60 THE GAZETTE TUESDAY, MARCH 25, 1997 Domtar, Caisse -elbow Into iepap deal Keep tabs on your stocks with The Gazette's Stock Quota Hotline. Call 555-1234, code 3500. Each call costs 50 cents. Commodities and Trans-Canada options: for free fax-back service, call 841-8600, code 5500. FRANQ01S SHALOM THE GAZETTE Qiiebecers now eating on credit Paul Gagne, Avenor's president, to pro-poseamerger, And a sour.ce said that a Domtar board membjer went to see Repap chairman Geprge Petty to present Domtar's case.

The Caisse owns 22 per cent of Domtar, a major producer of container board and fine paper, while another Quebec agency, the Societe Generate de Financement, has a 24-per-cent stake. But the 46-per-cent stake held by the Quebec government agencies does not necessarily mean that Domtar does the Caisse's bidding, Domtar spokesman Denis Couture said. "Theoretically speaking, (Cajsse-appointed directors) can have a different position (from the company's management). A fund manager and shareholders can have different considerations." But Repap Spokesman Veniez said that "you can't suck and blow at the same time, which is what apparently what the Caisseand Domtar are doing." And no formal proposal was present- Avenor Inc. 6.822 employees 1996 sales: $2.06 billion -1996 net earnings: $11.3 million Montreal head office: 125 jobs Six wholly owned or partly owned pulp-and-paper plants, three sawmills, one forestry centre Domtar Inc.

7.000 employees 1996 sales: $1.98 billion 1996 net earnings: $97 million Montreal head office: 140 jobs 21 mills (16 packaging, four fine paper, one pulp) and 10 sawmills Repap Enterprises 3.500 employees 1996 sales: $1.53 billion 1996 loss: $477 million Montreal head office: 50 jobs Three mills (one kraft paper, two coated-paper mills), two sawmills and logging centres by the Caisse, which appoints several board members to Domtar's board. Caisse spokesman Kevin Dougherty said the pension-fund manager objects to Repap's onerous debt leveL Domtar, however, raised no similar objection and insisted that the only modification it seeks to the existing Avenor-Repap agreement is to be included in the deal Avenor chief financial officer Denis Aubin said in an interview that no specific price was mentioned, but that a merger "would have been done on the basis of market prices." Avenor made a takeover bid for Repap on Dec. 18. The offer was revised downward when shareholders found the terms too generous and Repap's debt level dangerously high. For the deal to be approved tomorrow, shareholders of each company must vote in favor by a two-thirds majority.

Under the revised terms of the merger, which is worth $2.7 billion, Repap shareholders would receive one -Avenor share for each eight Repap shares. But last Tuesday and again on Friday, Domtar president Royer met with Pulp-and-paper firm Avenor Inc. said yesterday it was approached twice by Domtar Inc. last week to discuss a three-way merger with Repap Enterprises. But after being spurned by Avenor, Domtar's main shareholder, the Caisse de Depot et Placement du Quebec, said it will vote its 10-per-cent Avenor stake against the company's proposed takeover of Repap, in a shareholders' vote tomorrow.

The sudden involvement by the Caisse was denounced as "confusing, perplexing, destructive" and "cavalier" by Repap spokesman Daniel Veniez. Domtar president Raymond Royer said in a statement that he hasn't entirely given up hope that the vote will be postponed to enable a negotiated agreement among the three firms. The protracted Avenor-Repap saga became more complicated with Domtar's entry into the picture, especially since its official position seems to contradict squarely the statements made Provigo accepts Visa, MasterCard PAUL DELEAN THE GAZETTE PLEASE SEE PAGE D7 DOMTAR, Provigo Inc. gave itself credit yesterday for providing Quebec and On-tario customers with another way of pay in'g for their groceries. The Montreal-based food retailer now accepts Visa and MasterCard for purchases at most of its stores.

"It's not a revolution. We're just following a widespread trend," said Marie Bernier, Provigo's vice-president (public affairs). "Anywhere you go in the (U.S.), you can pay for groceries with a credit card. It's quite widespread in western Canada and the Maritimes. The only two provinces where it's its -i 4 L- not widespread are Quebec and Ontario." Not any more.

The chain has 165 Provigo stores, 69 Maxis and four Maxi Co. outlets in Quebec, plus 102 LOEB stores in Bernier said all but 25 of the Provigo stores were taking credit cards yesterday, "and eventually, I would imagine all wOuld want to have it." Maxi combination supermarket and department! stores, which were introduced last fall, have been accepting them from Day 1. Beriier said Provigo does not expect that a high proportion of customers will use credit cards instead of cash 6r bank-debit cards. 5 "We don't expect it? ,1 Bombardier to axe 135 Quebec jobs Sea-Doo's production sails away to Illinois Transportation giant Bombardier Inc. of Montreal will lay off about 135 workers this summer as it moves pro-: duction of its Sea-Doo personal water-craft to the United States.

The workers will lose their jobs at the plant in Saint-Antoine-de-Tilly, near Quebec City, at the end of June, Bombardier said yesterday. The company said it will provide severance packages and will help set up placement committees to assist affected employees search for new jobs. Bombardier said it's concentrating assembly of its Sea-Doo personal wa-tercraft at its plant in Benton, 111., to cut manufacturing and transportation costs. The Saint-Antoine plant, acquired in September 1995, will be scaled down from 335 employees to about 170. By the fall, remaining staff will be reassigned to making fibreglass components, such as hulls for Sea-Doos and shells for snowmobiles.

The company said that about 30 workers will be relocated within its motorized-consumer-products group. The group employs a total of 6,250, including 3,500 at its Valcourt, Sher-brooke and Saint-Antoine plants. Also yesterday, in Bregenz, Austria, Bombardier said that Rheintalflug Seewald Geselleschaft mbH will purchase one de Havilland Dash 8Q Series 400 plane for delivery in the second quarter of 2000. The value of the order wasn't disclosed. Rheintalflug has also taken an option for a further Dash 8Q Series 400 for later delivery.

Initially, Rheintalflug plans to operate its Dash 8Q Series 400 aircraft on its Vienna-Altenrhein route. Rheintalflug currently operates two Dash 8 Series 300 and one Dash 8 Series 100 aircraft. CP, DOW JONES PETER MARTIN, GAZETTE Film-maker Stephen Low's latest work is Super Speedway, which incorporates story of legendary driver Mario Andretti. Imax's potential larger than ife IndyCar film-maker expects wider use of medium "Why not for food when you can pay by credit card for almost any other purchase?" a big change consumer habits. But it's sometimes convenient to pay by credit card, and why not for food when you can pay by credit card for almost any other purchase? "What's the difference in buying a barbecued chicken, salad and cake (at Provigo) or at St.

Hubert Barbecue?" Diane Hetu, di- MARY LAMEY THE GAZETTE rector of communications for the Association des Detaillants en Alimentation du Quebec, said the association is not averse to credit cards, which a small number of Quebec grocery stores have been accepting for several theatres cost more to build and equip, which has slowed spread of the new technology. There are about 150 Imax theatres up ari running around the world, mostly located in museums, theme parks or as stand-alone commercial operations, i Limited numbers reate a chicken-and-egg situation, Low said. Theatre operators are always looking for new movies, while film-makers are always looking for theatres to book their work. Film-makers are also always looking for investors to back their newest films, while exhibitoraare often reluctant to back a feature based on a written outline and a few minutes of unfinished footage. As an independent production house, Low's companjj; had to go out and raise the financing for Speedway on its own.

While Imax Corp. owns the PLEASE SEE IMAX, PAGE D7 tion. The movie blends hair-raising race footage shot with a camera mounted on a NewmanHaas race car travelling at speeds of up to 200 miles per hour, with the story of Andretti pere, a racing legend. That human element is important. Imax films have been criticized in the past for offering thrills and chills, but little in the way of story.

Low has crafted a film that will appeal to race fans and non-race fans alike. The Imax Corp. was founded in Toronto 30 years ago. The company's technology employs special cameras and film stock 10 times larger than conventional 35-mm film to create oversized two-dimensional and three-dimensional images that are projected on five-storey curved screens. The picture is big, colorful and multi-dimensional, "as close to eyesight as can be achieved," Low said.

Imax films cost more to shoot and the Coming soon to the Imax theatre in the Old Port, Super Speedway, a bigger-than-life look at the world of IndyCar racing. Stephen Low, the film-maker behind Super Speedway, has even bigger expectations pinned on the future of Imax technology. "Once you've worked with the palette that Imax makes available, it is very difficult to go back to the limita-, tions that conventional filmmaking imposes," Low said in an interview before the press screening of his latest release. A documentary film-maker with more than 40 international awards under his belt, Low now makes Imax films exclusively. Super Speedway, a $7-million production featuring father and son race-car drivers Mario and Michael Andretti, is his sixth produc PLEASE SEE PROVIGO, PAGE D8 KSH to lead Indonesian project.

PAGE 08 Bre-X chief threatens lawsuit. PAGE D8 Last Alaskan pulp mill closes. PAGE 09 Fewer fake U.S. $1 00 bills. PAGE D1 0 TSiriuing Matrox Graphics hedges its hats on Elontrears future computer engineers from all over North America.

So if you ask the president of Matrox Graphics, a Mon-trealer with both his engineering degrees from McGill University and with the quintessential Montreal name of Lome Trottier, what are the odds that Matrox will still be tition. These improvements come from Matrox's, 400-strong staff of engineers, which must keep growing as the company expands, Unfortunately, it's', no longer possible to find enough qualified engineers in Matrox's specialized field who are willing to live in in this city five years from JAY BRYAN now, the response is less than rooccnvinn Montreal. -To fill its urgent need for talent, the company hashad to soend millions of 1 "I can't really say," replies Trottier. "What I caii pverShtfpast to set up new re- markable recovery that Matrox market research indicates it is now the biggest maker of graphics boards in North America. Matrox boards are factory-installed in high-performance computers made by IBM, Compaq, Hewlett-Packard, Dell, NEC and many other producers.

They're also sold by computer retailers as a popular accessory for people who want to upgrade their computers. But will these successful products continue to be designed and built in Montreal? Trottier will say only that it's very dangerous for a company like his to fall behind in its research efforts, and he couldn't sustain its reputation for innovation with the "trickle" of talent available in Montreal. The Florida research facility was opened years ago. It recently completed a key role in designing the company's most promising new product. The Toronto facility, which is brand new, won't be fully productive for another couple of years, but Trottier is willing to give it time to develop.

Meanwhile, in its Montreal headquarters, Matrox still looks and feels like a thriving, expanding enterprise. But when management places long-term bets on where the company's future will be shaped, they are increasingly being placed elsewhere. This column is about one of the most remark-: able High-tech success stories Montreal has seen in this decade. In any other city in North America, it Jvould be an inspiring example of the great good fortune a community can enjoy as a result of smart entrepreneui'ship. Bu this is Montreal, so the story is a little more complicated than that.

Most of the Matrox Graphics story is very happy indeed. The West Island electronics com: pany has grown to dominate a key area of personal-computer technology, propelling its worldwide sales to morejthan $500 million Jast year from $3Q' million just tWee years earHervThat sales, figure" is even more impressive 'than it looks, since It is expressed in U.S. dollars, reflecting the fact that most Matrox sales are exports to the U.S. As a result of this success, employment at Matrox has doubled over the past few years, to 800, and the company will hire another 100 or so this year. The jobs are good ones.

About half of Matrox Employees are engineers and many of the rest are in well-paid areas like marketing or administration. But! there is a cloud over this happy story, because doing business in language-restricted, politically uncertain Montreal has turned out to be a significant Competitive disadvahtageToira corff-" pany that must be able to attract the very best search and development facilities Boca Raton, Florida and Toronto. Why is the need so urgent? Matrox makes special circuit boards that let computers display graphics faster and better, a business so competitive that when the company reacted too slowryto a shift in the marketplace during the late 1980s, business plummeted and there were 200 layoffs. But happily for Matrox, this segment of the computer hardware market is mushrooming as computers are called on to do more and more vi-uaj trjc'ks, from running games with three-di-imensipnal graphics to editing home videos. Determined not to be frozen out of such a promising market, Trottier engineered such a re- say is inai we are aiversuying our operations ana structuring the company to have assets in different locations so as not to have all our eggs in one basket." A moment of thought, then he adds: "But we would hope to be here." The impact of the Montreal disadvantage isn't terribly visible so far at Matrox, since the company's headquarters and the majority of employees are still here.

But if you look at where the company puts its new investment, the signs are disconcerting. 'The heart of this company is research and de-velopment-Ih the computer business; this year's product miist be both biiffer'and cheaper than last year's simply in order to keep up with the compe-' trt.