News SCAN

SALES AND EARNINGS

U.S. paper industry profits decline again in 1997, outlook better for '98

For the second consecutive year, U.S. paper and forest products companies posted lower annual sales and earnings. The results reflect the worldwide decline in commodity pricing for pulp, paper, and wood products over the past two years. In addition, a wide assortment of nonrecurring charges for corporate restructuring, asset sales, and other activities lowered profits for many companies. A hint of better days ahead came in the final quarter of the year, as many companies reported improvements in both sales and net income.

Many paper industry executives say that concerns over Asia have been overblown. They predict that solid economic growth in North America and Europe will support rising product prices this year.

A Pulp & Paper Week survey of fourth-quarter earnings showed net gains for 16 companies, while 10 companies posted lower results compared with the same period in 1996
(Table 1). Total net income before special charges was $980.6 million, an increase of 2.6% over the 1996 fourth quarter. Sales increased 2.3% to $28.4 billion. Some companies are not shown, notably Stone Container Corp. and Temple-Inland Inc., because they had not yet reported their fourth-quarter and full-year results. Wausau-Mosinee Paper Corp. reported sales and earnings for only the final four months of the year. Buckeye Technologies Inc. reported results for six months.

For the full year 1997, total net income before special charges was $3.5 billion, a decline of 26.8% from 1996. Net sales declined 10.8%, falling to $100 billion from $112 billion. ACQUISITIONS/MERGERS

Daewoo Heavy Industries' two U.S. companies-Daewoo Machinery Corp. and Daewoo Equipment Corp.-have merged. The new company, Daewoo Heavy Industries America Corp., will be headquartered in Carlstadt, N.J., and will be responsible for North American sales, service, and technical support of all Daewoo machine tools, construction equipment, lift trucks, skid steer loaders, and mini excavators. The most immediate change will be the consolidation of parts operations and distribution to Suwanee, Ga.

The Coldwater Group, Atlanta, Ga., has acquired the assets of Mill Roll Services, Oxford, Ala. Coldwater Resins has relocated from Atlanta to the new facility in Oxford where a new subsidiary will also be formed-Coldwater Covers-that will offer polyurethane and epoxy composite roll covers to paper mills in the southeastern U.S.

Osmonics Inc., Minnetonka, Minn., a manufacturer of water purification and fluid filtration, separation, and transfer equipment, has completed its acquisition of Purification Products Co. (PPC), San Marcos, Calif. PPC manufactures a line of reverse osmosis membrane elements.

TI Group has acquired Safematic Oy of Finland, a supplier of sealing and lubrication systems to the pulp and paper industry. The acquisition will accelerate growth in the pulp and paper industry for TI's John Crane Group.

Water Pollution Control Corp. has acquired Aeration Engineering Resources Inc., a Sterling, Mass., manufacturer of aeration products and systems.

Columbus McKinnon Corp., a supplier of material handling products and integrated material handling systems, has purchased all the outstanding stock of Univeyor A/S of Denmark, a supplier of turnkey integrated material handling systems.

Irwin Car and Equipment, a manufacturer of industrial transfer cars, wheels, wheel assemblies, and customized material handling equipment, has acquired Industrial Alloys, which is also based in Irwin, Pa. Industrial Alloys is a fabricator of aluminum, stainless steel, and other nonferrous and ferrous alloys.

IDEX Corp., Northbrook, Ill., a manufacturer of fluid handling and industrial products, has agreed to acquire Gast Manufacturing Corp., Benton Harbor, Mich., a manufacturer of air moving products such as compressors, vacuum pumps, and air motors.

Velan Inc., Montreal, Que., a manufacturer of industrial valves, has acquired Proquip Valves Ltd., Oakville, Ont., a manufacturer of wafer check valves and line blinds.

JOINT VENTURES

ABB Industrial Systems' Pulp and Paper Manufacturing Execution Systems (MES) Group has announced that is has become an IBM business partner. IBM has classified ABB's MES group as a Solution Provider, meaning that it offers industry application solutions.

A joint engineering cooperation between ABCO and the Coen Co. has produced a new repowering program for package watertube boilers. Repowering provides the operating efficiencies and low emissions of a new boiler without the expense or time associated with a completely new boiler system.

NEW FACILITIES

Alfa Laval Thermal Inc., a manufacturer of compact heat exchangers, has opened a new Ameristock parts distribution and service facility in Ashland, Va. Ameristock will provide 24-hr shipment on parts for stock heat exchangers. This new facility has also increased Alfa Laval's plate reconditioning capacity. It will also assume service and maintenance responsibilities for the Alfa Laval Thermal service facility formerly located in South Plainfield, N.J.

Engelhard Corp. has announced the startup of a multimillion-dollar slurry facility for kaolin-based paper coating pigments in Rauma, Finland.

Luzenac America Inc., a producer of talc mineral pigments, has announced the construction of a regional slurry makedown and delivery facility in Auburn, Maine. Luzenac mines and produces Mistron talc products to control pitch and stickies.

Valmet has inaugurated its new paper and board technology center near Bangkok in Laem Chang, Thailand. The new center will provide the paper industry in Thailand and neighboring regions with comprehensive paper machinery services.

REORGANIZATIONS

A Kvaerner Pulping division devoted to supplying fiber recycling and dewatering has just been created. The new group, Kvaerner Pulping - Recycling & Dewatering Div., has actually been delivering dewatering technology under the previous "Hymac" title for many years. The new group will provide products and services through two business areas-recycled fiber systems and machinery customer service.

Jaakko Pöyry Consulting Worldwide has announced the formation of an executive management team to enhance the value and service level of its consulting operations. The nine-member team will be responsible for oversight, guidance, and thought leadership of the entire spectrum of consulting services provided to the firm's international clients.

Robert Bosch Corp. has announced that it is integrating three North American business units into a single organization. To be called Bosch Automation Technology, this organization will be comprised of Robert Bosch Fluid Power Corp., Racine, Wis.; Bosch Automation Products, Buchanan, Mich.; and Robert Bosch Corp., Electronics Div., Avon, Conn. The new organization will provide a single source for Bosch hydraulic and pneumatic components, automation products, and industrial electronics, controls, and drives.

As part of its focus on customer support, Bosch Automation Technology plans to provide local service, training, application support, and product demonstrations from regional customer technical support centers. The first of these-located in the Detroit, Mich., area-has already opened.

Andritz Refinersysteme GmbH (formerly Andritz Sprout-Bauer GmbH), Vienna, Austria, will be integrated into Andritz AG as the mother company and followed up by Refiner Systems Vienna-a newly created department.

MARKETING/LICENSING

Victaulic Co. of America has entered into an agreement to become the North American distributor of TA Hydronics valves for measuring and balancing flow in hydronic and air conditioning systems. Manufactured in Sweden, the valves provide good flow characteristics due to straight-through flow over a weir.

GL&V Process Equipment Group and GL&V/LaValley have signed an exclusive agreement to market Shower Technology's Everclean wire cleaning shower for rotary vacuum filters. In addition, GL&V/Black Clawson-Kennedy Pulp and Paper Machine Group Inc. is now marketing its winders featuring slitter systems from Dienes Corp.

BetzDearborn has announced that it has expanded its FirstChoice water management outsourcing capabilities with the addition of Glegg Water Conditioning as a preferred supplier. Headquartered in Guelph, Ont., Glegg offers custom- and pre-engineered modular water treatment equipment, including filters, reverse osmosis systems, ion exchangers, and other products and systems.

EXPANSIONS/MODERNIZATIONS

Beloit Corp. has expanded its MillPro Services network to include the Eastern Canada region. Headquartered just outside Montreal in Baie d'Urfe, Que., the Eastern Canada region also includes MillPro facilities in Renfrew, Ont., and Sherbrooke, Que. The new headquarters serves as the administrative and field service hub, providing distribution, light assembly, and repair capabilities as well as woodyard products. The Renfrew facility provides a full range of paper machine products. The Sherbrooke center serves as the pulping product center for all of Canada.

Kemira Pigments Oy has announced that it will resume the project to increase titanium dioxide production capacity in Pori, Finland. Originally started in 1995, the projects was canceled when market conditions for titanium dioxide worsened.

In response to growing demands for flexographic printing plates, Polyfibron Technologies, in Billerica, Mass., has broken ground for a $10 million expansion of its Morristown, Tenn., manufacturing facility.