NEWS SCAN
Smurfit, Stone to merge, create $8 billion company, largest packaging concern
Jefferson Smurfit Corp. (JSC) and Stone Container Corp. announced in May that they have signed a definitive merger agreement to create a global powerhouse in paperboard packaging. The merger involves a stock transaction that values Stone Container at approximately $2.1 billion. Smurfit will also assume $4.35 billion of Stone Container’s debt in the transaction. As part of the deal, a subsidiary of Jefferson Smurfit Group plc of Ireland, JSC’s largest shareholder, has agreed to purchase 20 million common shares of JSC controlled principally by the Morgan Stanley Leveraged Equity Fund II and other investors for $500 million.
The new company, to be called Smurfit-Stone Container Corp. (SSCC), will be the world’s largest packaging company, with annual sales exceeding $8 billion. In the U.S., the company will be the industry leader in containerboard production, with estimated mill capacity of 7.1 million tons and an additional 400,000 tons of capacity in Canada. SSCC will also be the market leader in the corrugated box industry, with approximately 135 plants producing about 75 billion ft2 of packaging annually.
The merger is expected to generate annual cost savings in excess of $350 million within two years. This goal will be achieved by optimizing manufacturing operations, eliminating redundant overhead cost, and leveraging increased purchasing volume. Interest expenses and other financial costs are also expected to be reduced in connection with planned refinancing of debt.
A major priority of SSCC will be to narrow its product range and substantially reduce debt by divesting non-core businesses and assets, including newsprint and pulp operations. Planned asset divestitures are expected to yield gross proceeds of $2.5 billion, which will be used to reduce the company’s $6.4 billion of outstanding debt.
Debt reduction. Stone Container will proceed with a previously announced divestiture plan, which includes the sale of its Canadian subsidiary Stone Container (Canada) Inc. to CIBC Wood Gundy Capital, a unit of Canadian Imperial Bank of Commerce. The Canadian holdings include 48.8 million shares of the Canadian newsprint manufacturer Abitibi-Consolidated Inc., a 50% interest in Canadian corrugated box manufacturer MacMillan Bathurst, and a specialty pulp mill in Portage-du-Fort, Que.
Stone Container also plans to spin off its remaining pulp operations, which will be “monetized” to contribute cash and securities to Stone Container. The monetization plan will also include Stone Container’s holdings in Stone Venepal (Celgar) Pulp Inc., a bleached market pulp mill located at Castlegar, B.C.
JSC plans to sell or monetize an additional $1 billion of assets. Company officials said the divestitures might include its newsprint and publication papers operations located in Oregon and California. Part of this transaction might include Stone Container’s newsprint operations in Snowflake, Ariz. Another divestiture might involve JSC’s extensive timberland holdings.
The merger is expected to close in the third or fourth quarter of this year, pending regulatory approval.
U.S. first quarter profits higher
Improving demand and higher prices for most products lifted the first-quarter financial results for most U.S. paper and forest products companies compared with the same period a year ago. Some companies announced that first-quarter profits more than doubled. International Paper Co., for example, said profits increased 121% from a year ago, although sales stayed constant at $4.9 billion.
The turnaround has been noted in the Standard & Poor’s forest products index, which is up 18.3% this year. The Dow Jones paper products index was also up 18.3% for the first four months of the year and the Dow Jones forest products index was up 19.1%.
First-quarter profits increased 55% for 32 paper and forest products companies. Total net income for the group was $844.2 million compared to $544.6 million a year ago. Total sales were $30.5 billion, an increase of 3% from $29.6 billion in the first quarter of 1997.
Union Camp Corp. scored the largest percentage gain in first quarter profits. The Wayne, N.J.-headquartered company said earnings increased to $26.7 million from $9.6 million a year ago, representing a net increase of 178%. The company attributed the turnaround to higher prices for its core products, uncoated free-sheet printing papers, and kraft linerboard. In addition, a companywide program to reduce manufacturing costs helped offset higher wood costs.
Other companies posting large percentage gains were Temple-Inland Inc. (+100%), Weyerhaeuser Co. (+85%), Rock-Tenn Co. (+75%), Willamette Industries Inc. (+66%), and Potlatch Corp. (+68%). Several companies posted profits in the first quarter after reporting losses last year. Champion International Corp. reported net income of $19 million for the first quarter, reversing a net loss of $37.1 million in last year’s first quarter. Georgia-Pacific Corp. reported net income of $16 million after reporting a net loss of $13 million in the first quarter of 1997.
Canadian earnings on upswing for most
Most Canadian pulp and paper companies showed sharply improved earnings for the first quarter of 1998 compared with the same period a year ago, based on higher prices for the industry’s major products: bleached kraft pulp and newsprint. Higher average prices and the lower Canadian dollar boosted revenues; however, overall industry shipments of these products were lower as a result of reduced export levels. At the same time, companies concentrated on lumber and wood products reported sharply lower earnings as a result of reduced market demand in Asian markets and curtailed shipments to the U.S. due to the strict quotas mandated by the Canada-U.S. softwood lumber agreement.
During the first quarter, eastern Canada was struck by a severe ice storm that forced many pulp and paper mills to temporarily shut down. In British Columbia and Alberta, pulp mills and sawmills were idled as market demand in Japan and other Asian countries fell sharply and companies reached their lumber quotas for exports to the U.S. The British Columbia forest products industry was also affected by a long-term labor strike at Fletcher Challenge Canada Ltd. (FCC), which was settled in April.
Total first quarter profits for 21 Canadian paper and forest products companies were C$103.7 million. This compared with a combined net loss of C$136.5 million for the same period in 1997. During the fourth quarter of 1997, group earnings were C$116 million. Total sales of paper and forest products were C$7.3 billion in the first quarter. This compared with C$6.7 billion in the first quarter of 1997 and C$6.9 billion in the final quarter of last year.
K-C opts for recycled, to shut Mobile mill
Kimberly-Clark Corp. (K-C) plans to shut down its 560,000 mtpy softwood/hardwood market and integrated wet-lap kraft pulp operation in Mobile, Ala., in September 1999. K-C said the decision was largely driven by customer S.D. Warren Co.’s plan to terminate its contract for its one-third share of Mobile’s output. For its internal needs at the Mobile site, which makes bathroom tissue, paper towels, and napkins, K-C said it would use other kinds of pulp. It will build a recycled pulp facility on location, and it will rely on its mill in Pictou County, N.S.—which it no longer plans to sell—for northern bleached softwood kraft (NBSK). In the announcement, K-C said it would sell its associated southeast timberlands woodlands operations, which supply the pulp mill. The company said the new approach, which also will cost 450 jobs, will greatly improve the competitiveness of the tissue mill. K-C said that with the termination of the Warren contract, it made much more sense to invest instead in “the future of the tissue mill” by building the recycled facility and making modifications to use other fiber sources.
K-C said it slushes about a third of its output to Warren’s paper mill in Mobile. The rest is used at Mobile or shipped to other company sites, including its mill in Chester, Pa. Warren had indicated last October that it wanted the opportunity to buy better quality, lower-cost fiber from elsewhere. A month later saw release of the U.S. Environmental Protection Agency’s Cluster Rule, which K-C said would have cost $260 million for compliance. K-C said the mill is also hampered by high energy costs.
Recycled plans. The company said it will install an approximately $100 million state-of-the-art deinked fiber facility for internal use, as well as systems allowing use of baled pulp. The company has just now begun designing and engineering for the recycled facility, with an as-yet-undetermined capacity or wastepaper source. Construction is scheduled to start by September 1999. K-C might work out an agreement with Southern for the recycled mill, according to a company spokesperson, who said that a recycled facility would use less energy than the current virgin pulp operation.
There has been no decision yet as to whether K-C will make premium facial tissue in Mobile; K-C uses eucalyptus to make that product at other sites.
The Pictou mill and K-C’s Terrace Bay, Ont., mill were to have been sold as a package to Harmac Pacific Inc. in a deal announced in November that later fell through. K-C said it will also keep its 160,000 mtpy NBSK mill in Everett, Wash., but that it still plans to sell its mills in Terrace Bay, Ont., and Miranda, Spain, reducing the company’s pulp integration level to about 20%.
First quarter U.S. production up only slightly
Seasonally unadjusted paper and paperboard production in the U.S. exceeded its year-ago volume by 1.1% in the first quarter, according to the American Forest & Paper Assn. The overall gain reflected a 2.7% increase in paperboard production and a 0.7% decline in paper production.
North American newsprint shipments declined 4.3% relative to a year ago during the first three months of 1998, due to reduced overseas demand. North American newsprint shipments to the U.S. and Canada were up 0.8% and 6%, respectively, during the first quarter of 1998. U.S. newsprint shipments lagged their year-ago volume by 1.1% during the first quarter as a 3.4% increase in deliveries to the domestic market was more than offset by a 21.4% plunge in exports (through February). Newsprint mill inventories were at 436,000 tons in March, a 32.5% decline from March 1997.
Domestic shipments of printing/writing paper failed to advance due to negative trade developments and were off 0.9% from the first quarter last year.
Mill inventories of the four major categories rose by 173,000 tons as of the end of March. Fiber box shipments were up 2.9% for the quarter. Market pulp shipments were down 4.4%.
Coated groundwood price increases set
Repap Enterprises Inc. in May kicked off what is expected to be a host of other price announcements, by taking its coated groundwood grades up 5% effective July 1. The increase is good through Mar. 31, 1999.
Except for coated groundwood, the printing/writing paper markets during the first quarter were lackluster, characterized by lower shipments and higher inventories. Although economic factors were favorable—the U.S. GDP continued to grow unencumbered by any tightening by the Federal Reserve—printing/writing shipments were flat or down compared to the fourth quarter of 1997 (and off 0.8% compared to the same quarter in 1997) and inventories rose, albeit from low levels in 1997. Imports soared by 36.9% (U.S. Commerce Dept. data available only for January and February at press time) compared with the same period last year, capturing all the growth in apparent demand.
Prices, except for coated groundwood, did not move significantly, after ending the year on a high note. Some say the fourth quarter had been unseasonably busy so that comparisons are difficult. Perceptions about Asian paper making its way to the U.S. as a result of the currency crisis and lower pulp prices were also to blame, some say. But most analysts say the markets are poised for a comeback in summer months as commercial printing activity will begin to strengthen and a pulp price increase pushes up costs that can be passed along.
Statistics from the American Forest & Paper Assn. show that coated paper shipments for the first three months of 1998 were 2.23 million tons, vs 2.24 million in the same period last year. Uncoated free-sheet shipments were 3.4 million compared with 3.5 million. And uncoated groundwood shipments rose from 498,000 tons to 526,000.
Uncoated free-sheet mill inventories stood at 1.34 million tons at the end of March, up 17.5% from March 1997. Coated free-sheet mill inventories were up 10% and stood at 518,100 tons. Coated groundwood mill stocks, while up somewhat in March from February, were down almost 33% from March a year ago. Uncoated groundwood inventories were down about 16% from March 1997.
In Canada, coated paper shipments year-to-date through March were 298,000 metric tons, up 9% from the same period a year ago. Uncoated free-sheet shipments were also up about 3% to 344,000 metric tons.
Upgrade announced for Muskegon mill
S.D. Warren plans to finish installation of a $30 million sheeter at its Muskegon, Mich., mill in October with startup slated for the following month, the company said. The project includes, in addition to the converting equipment, a 30,000 ft2 roll storage warehouse.
The Muskegon mill has a capacity of 285,000 tpy of coated free-sheet heavyweight book and cover stock on two paper machines. The company declined to say whether capacity will be increased.
Abitibi invests in Kenogami for SC paper
Abitibi-Consolidated Inc. announced a C$128 million modernization at the Kenogami mill in Jonquiere, Que., that is intended to lower production costs and to produce higher quality paper, especially with the supercalendered SC-A grade.
The investment comes as the company eyes cutting costs at the mill, and as the SC-A market in North America expands with the startup of the 385,000 tpy SC-A/SC-A+ machine at the Stora Port Hawkesbury mill in Nova Scotia. Abitibi-Consolidated saw the investment as necessary to compete in the growing SC-A market.
The 215,000 mtpy mill has three machines, with the largest being the 110,000-mtpy No. 7 that produces SC-A. The No. 1 makes soft-nip papers. The No. 6 makes SC-B and SC-C.
Expansion. Construction will begin at the end of summer on a building for a new wrapping line and should be completed by the end of 1999. The line would accommodate 140-in. to 150-in. rolls. The project also calls for improving the No. 7 machine, doubling the capacity on the thermomechanical (TMP) pulp line, adding a bleaching plant, and modifying the secondary effluent treatment system. The TMP line expansion should be completed by the end of 2000. The line will expand to about 160,000 mtpy. At the same time, the stone groundwood plant at the mill will be closed.
The company expects to save about $50/ton on production costs as part of a 10-year deal on electricity with the government and Hydro Quebec. A source with the company said the improvements for the TMP line, bleaching plant, and secondary effluent system also raise the prospect for a new SC machine at the mill in the next five to eight years.
Directory. In the directory market, Fletcher Challenge Canada Ltd. (FCC) plans a C$15.9 million modification of a machine at the Crofton, B.C., mill that will allow it to produce a lighter basis weight 18-lb directory paper.
The company plans to produce 100,000 mtpy of 18-lb (29.3-g) to 22-lb (36-g) directory paper for telephone book publishers, such as the Baby Bells.
FCC expects to use less fiber for making the paper as part of the company “staking its future on lightweight runnability” for newsprint and uncoated papers, a company official said. The furnish for the lighter paper would average 40% recovered paper. FCC will test run 29.3-g directory paper in the next six months and expects to sell it on the market in early 1999.
Demand by non-daily newsprint buyers flat
Newsprint demand from non-daily newspapers in the U.S. showed signs of improvement in the first quarter, but generally remained in the slump that it has been in for more than the last two years. Sources with newsprint producers, however, described the non-daily market (which takes in 20% of North American standard newsprint) as rebounding.
Some printers reported an “unprecedented” first quarter, including many who were sold out on newsprint-related orders. One newsprint producer expected a “mediocre” second quarter for sales to commercial printers, but expected strong third and fourth quarters.
The first quarter newsprint demand by non-dailies (principally commercial printers that handle newsprint advertising inserts as well as the printing of weekly, alternative, and community newspapers) was up a slight 0.7% compared with the first quarter 1997, according to the Canadian Pulp & Paper Assn. (CPPA). Consumption of newsprint by non-dailies was down 1.3%.
Newsprint shipments to commercial printers were down in 1997 and 1996 to 2.1 million and 2 million metric tons, respectively, after shipments were 2.4 million metric tons in 1995 and 2.2 million metric tons in 1994. Sources for printers and producers weren’t certain about the reasons for the slump. Several cited grade changes, pricing differentials, declining circulation among some weeklies, and a slowdown in the insert advertising business.
Inserts. The advertising insert business—a main market for newsprint among commercial printers—has slowed in recent years, sources said. In the first quarter, the insert business in the U.S. grew by 2.2%, according to a survey by the Printing Industries of America Inc.
The non-dailies take an estimated 20% of the newsprint sold in North America. The optimistic outlook this year for the non-daily newsprint demand is driven by the still-humming U.S. economy that has helped newspaper advertising.
Circulation dropped to 70 million for U.S. weekly newspapers last year, according to the Newspaper Assn. of America. In Canada, the weekly circulation of English- and French-language papers followed a rebound in daily newspaper circulation and advertising, and increased by about 10.5% the last two years to roughly 10 million, according to the Canadian Community Newspaper Assn.
Crown may sell St. Francisville mill
Crown Vantage Inc. said it is exploring divestiture of its St. Francisville, La., pulp and paper mill to help pay down debt. The company would then focus on specialty papers, which are produced at nine other mills in the U.S. and Scotland. According to the company, the business would include 27 paper machines producing about 600,000 tpy. It would be about 50% pulp sufficient, with about 250,000 tpy coming from the largest complex in Berlin and Gorham, N.H.
If St. Francisville is sold, Crown Vantage would be among the largest specialty paper companies in the world. Crown reported a first-quarter net loss of $14.2 million, compared with a loss of $9.6 million in first-quarter 1997. The results included a gain of $13.5 million on the sake of timberlands and a charge of $3.3 million for closing the Newark, Del., mill. The company also said it will eliminate an additional 5% of its work force of about 3,900 by the end of this year. This will reduce costs by an estimated $8 million annualized. *
Plastic money: Does it have a future?
In an effort to lengthen their lifetimes and deter counterfeiting, the Bureau of Engraving and Printing is studying whether other materials—including plastic—might be used in making folding money. The U.S. agency stresses that bills will continue to be made out of paper for some time to come but says alternate materials have been tested.
Other than confirming that a plastic developed by the Reserve Bank of Australia and a paper-plastic sandwich produced by Domtar Inc. had been tested, bureau spokesman Ed Sheehan declined to specify what other materials might be considered. No changes would be made until after 2000.
Australia has converted all its bills to plastic and says its notes last four times as long as paper, thus saving money in reprinting costs.
Canadian producer Domtar Inc. holds the patents for a revolutionary new product that could replace paper currency trademarked Luminus.
Luminus is, in effect, a paper sandwich—a laminated product comprised of three layers of paper, film, and paper. The film—which is in the middle—is polyester and can contain a color image and other security features.
The advantages of Luminus include the fact it “feels like paper,” according to a company official. In addition, Luminus works with cash machines and changers, eliminating any costly retooling, and is more durable.
U.S. on track to reach 50% recovered paper
At the height of the focus on paper recycling in the early 1990s, the paper industry set a new goal to recover and find a home for half of all the paper consumed in the U.S. in 2000. However, the American Forest & Paper Assn. (AF&PA) said that the goal might not be achieved.
“We’re more than halfway to the 50% goal,” said Stanley Lancey, AF&PA’s director of economic services. “We’ll pretty much achieve the industry’s consumption goal, but there are things that are outside of the industry’s control.”
Lancey explained that the goal was based not only on the paper industry’s projected consumption of 39.5 million tons of recovered paper in 2000, but also on projected U.S. exports and for “other uses” such as paper composting, cellulosic insulation, and animal bedding. The export goal will probably come close or even exceed its mark of 7.6 million tons in 2000, but the “other uses” category is expected to fall far short of its target of 3.9 million tons in 2000, said Lancey.
1997 gain. A record 45 million tons of paper was recovered in 1997, according to the AF&PA. This marked a 2.1 million ton increase over 1996 and a gain of 5%. However, the recovery rate stayed at just over 45% in 1997—essentially the same as it was in 1996—because U.S. paper consumption grew by nearly 5 million tons, the largest one-year jump in more than a decade. This 5.5% growth in consumption essentially offset the 5% gain in recovery.
Recovery of corrugated and newsprint continued at record levels in 1997. Corrugated recovery totaled 22.5 million tons (a 900,000 ton increase over 1996), for a recovery rate of 73.3%. Newsprint recovery reached 8.5 million tons (a more than 560,000 ton gain), for a recovery rate of 67.8%. The recovery rates for both categories remained flat from their 1996 levels. AF&PA said that this was not unexpected given that the recovery rates for both grades were already high.
U.S. mills consumed a record 36.5 million tons of scrap paper last year, up from nearly 34 million tons in 1996. This translated into a utilization ratio (the ratio of recovered paper recycled to paper produced) of 37.6% during 1997, marking the eleventh consecutive yearly increase. In all, the use of recovered paper in domestic papermaking grew 7.3% from 1996 to 1997.
Lancey said that the use of recovered paper by U.S. mills has risen by nearly 70% since 1990. The challenge for the future will not be the recovery of paper or the raising of recycled pulp, paper and paperboard capacity, but the quality of the paper recovered, said W. Henson Moore, AF&PA president and CEO.
Republic Paperboard to build gypsum mill
Republic Group Inc. and its wholly owned subsidiary Republic Paperboard Co. said its board of directors has approved plans for construction of a new greenfield paper mill to produce gypsum wallboard facing paper. The new mill will have production capacity exceeding 220,000 tpy and will be located in Lawton, Okla., said the company. Construction will begin almost immediately with startup expected by the end of 1999. Total construction costs are estimated to be about $150 million to $170 million.
Phil Simpson, chairman and president of Republic, said, “This venture will make Republic one of the largest producers of gypsum grade paperboard in North America.” Republic operates three mills with annual capacity of 215,000 tpy of gypsum wallboard paper and uncoated recycled paperboard for consumer and industrial packaging products.
The new mill will be built in southwestern Oklahoma near Republic’s big wallboard manufacturing plant in Duke. This facility is currently being expanded to double its production capacity to 1.2 billion ft2 annually. The mill will supply the Duke facility as well as external customers. A significant portion of the outside sales will be made under contract to James Hardie Gypsum Inc., a major independent supplier of gypsum wallboard in the U.S.
Steve Gagnon, executive vice president of Republic, said, “The company has been planning this project for over a year. The new mill will utilize state-of-the-art proven technology not yet being fully utilized in the U.S. The paperboard produced is expected to be 20% to 30% lighter than now generally available.”
Fluor Daniel Inc. will provide overall project management, engineering procurement and construction services; Marathon Engineers/Architects/Planners LLC will provide detailed engineering and design services; and Voith Sulzer Paper Technology North America Inc. will supply the recycled fiber plant and paper machine equipment. This is the second new gypsum paperboard project announced this year. In March, Caraustar Industries Inc., the largest independent supplier of gypsum paperboard, announced plans for construction of a new 225,000 tpy mill.
• Cascades Sonoco Inc., a joint venture between Cascades Inc. and Sonoco Products Inc., announced the acquisition of Hamilton Hybar, located in Richmond, Va., for $22 million. The company was acquired by Sonoco in 1996. It manufactures roll edge protectors and reprographic ream paper for the pulp and paper industry.
Fort James to close converting plants
Fort James Corp. said it will consolidate its Dixie food service food wrap operations in Parchment, Mich., and its plastic cutlery operations in Los Angeles, Calif., and Leominster, Mass. Under the plan, the company will close its 93-year-old food wrap Canal facility in Menasha, Wis. Some of the equipment will be moved to the newer Parchment facility and about 60 jobs will be added there.
The consolidation of the plastic cutlery operations means a plant in Houston, Texas, will be closed. This is primarily the result of a decision to discontinue production of the freefall polyproplylene product line, and focus on other value-added products, according to a news release. About 100 jobs will be added in Los Angeles and 12 in Leominster.
• Graphic Packaging Corp. announced plans to build a new, highly automated folding carton manufacturing facility in Golden, Colo. Estimated costs are $35 million for the 200,000 ft2 facility. Graphic Pkg. operates 16 plants in the U.S. and Canada and is the largest independent supplier of folding cartons in North America.
• Union Camp Corp. said it will close its corrugated container plant in Newtown, Conn., and liquidate the plant’s assets due to unfavorable economic and market conditions. The company said it is pursuing opportunities to sell the plant as an ongoing operation and it will continue to operate during this transitional period. The facility has 119 employees.
Stora and Enso announce merger
Stora AB of Sweden and Enso Oy of Finland have agreed to a merger that will create the largest paper and forestry group in the world. The link-up creates a new company called Stora Enso with combined pro forma sales of $11.3 billion and a total paper and paperboard production capacity of more than 13 million metric tons and 40,000 employees worldwide. Together, Stora and Enso have a market value of FIM 46 billion ($8.5 billion).
In addition to its overall scale, wider production mix, and leading market position in Europe, Stora Enso will have an expanded global presence in North and South America and Asia, providing a solid base for future strategic growth. Claes Dahlbäck will be the chairman of Stora Enso and Jukka Härmälä, Enso’s current CEO and chairman, will be the group’s chief executive. Härmälä guided the successful merger of Enos-Gutzeit Oy and Veitsiluoto Oy in 1996. “This Nordic combination will be a major competitive force in the international forest products industry, creating added value to customers,” said Härmälä.
Analysts have reacted positively to the news of the merger, which reflects the ongoing consolidation in the pulp and paper sector around the globe. Last month, Ireland’s Jefferson Smurfit Group plc announced a merger of its U.S. subsidiary and Stone Container Corp. to create a major power in paperboard packaging. Most industry commentators believe that the Stora Enso deal will prompt a further rash of merger and acquisition activity in the pulp and paper sector.
Market position. The Stora Enso transaction will lead to substantial consolidation in three product areas: coated and uncoated free-sheet papers (fine papers); publication papers; and paperboard packaging. In fine papers, Stora Enso would become the largest producer in Europe and the third-largest producer in the world with estimated capacity of 3.1 million metric tons. The majority of the capacity is in the coated grades, where it primarily competes with Sappi Ltd., International Paper Co., Champion International Co., Georgia-Pacific Corp., and Consolidated Papers Inc. Last year, Enso started up a new 360,000 mtpy coated free-sheet machine at its Oulu mill in Finland.
In newsprint, Stora Enso would be the second-largest producer in the world with 3.2 million metric tons of capacity. Its principal competitors are Abitibi-Consolidated Inc. of Canada and Bowater Inc., which is proceeding with the acquisition of Avenor Inc. In lightweight coated groundwood (LWC) and supercalendered (SC) papers, Stora Enso will be the second-largest producer in the world with, respectively, 1.6 million metric tons and 1.1 million metric tons of capacity. It would fall behind UPM-Kymmene Corp. of Finland, which has 2.5 million metric tons of LWC capacity and 1.2 million metric tons of SC capacity.
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