Fraser Papers stays competitive in the rapidly changing specialty papers market using market research and customer interaction

New Technology, Strategy Bring Success In Specialties at Fraser’s Madawaska Mill

With half of its eight paper machines having been installed in the 1920s, Fraser gradually found it more and more difficult to compete with larger machines in the commodity market. Of the $130 million invested in Fraser’s Madawaska operations, almost $60 million was spent in transitioning just three of the paper machines to specialty converting grades. With almost all of the paper machines customized for specialty grades, the result has been that more than 70% of the mill’s output is now considered higher-margin specialty papers.

On the surface, Fraser’s success in the specialties market appears simply a matter of capital investment. However, the Madawaska mill’s success in that market is not attributable to technology and equipment alone. Since the 1940s, the mill has searched for ways to capitalize on its high-quality fiber supply and coating expertise. In the 1990s, a strategic approach that combined market research, intensive customer support in product development and performance, and cultural changes within the mill has signi-ficantly contributed to the mill’s success.

A HISTORY OF ADAPTABILITY. Fraser’s Madawaska mill has eight paper machines, four of which were installed in the 1920s. Two more were installed in the early 1930s, and the remaining two were installed in the late 1950s and late 1960s. Over the years, the mill has migrated from commodity grades such as lightweight coated (LWC) to more specialized book papers, and, ultimately, specialty papers such as supercalendered (SC) release and thermal papers.

Although the Madawaska mill’s most concentrated efforts in the specialty papers market began in the late 1980s to early 1990s, the mill had started using coating technology that would eventually aid in these efforts as early as 1940. Complementing this expertise was the Madawaska mill’s access to high-quality sulfite pulp from the Edmundston, N.B., mill it is integrated with.

“Whether or not we consciously built on our coating capabilities and quality fiber in the beginning, the marriage of the two has allowed us to move into specialty grades,” describes Paul Vanier, manager of pro-duct development at Madawaska.

Quality fiber supply. Through a pipeline, the Madawaska paper mill receives 550 tpd of sulfite pulp and 250 tpd of groundwood pulp in 1% slurry form from the Edmundston mill, which is located directly across the St. John River from Madawaska. According to Vanier, the sulfite fiber lends itself to dense substrates, as well as soft, pliable sheets. This fiber is made from spruce and fir derived from 2,250,000 acres of nearby timberland that is owned by Nexfor Inc. (formerly known as Noranda Forest Inc.), Fraser’s parent company.

Although the mills are integrated, the sulfite pulp from Edmundston accounts for only 75% of the fiber used at Madawaska. The remainder, which is mostly hardwood and softwood kraft pulp, is purchased on the open market. However, most of the softwood kraft comes from mills that are owned completely or partially by Nexfor. In addition, the Madawaska mill purchases mixed office waste (MOW) on the open market for its grades that require recycled fiber.

To Vanier, this mixture of internal and external fiber sources is crucial for the specialty markets that Fraser has developed. Sulfite pulp from Edmundston ensures customers that a ready, consistent supply of pulp is available—one that isn’t affected by market cyclicality. Fiber from Madawaska’s external sources gives the mill “latitude in participating in a wide variety of specialties,” says Vanier.

Coating expertise. In 1940, Fraser began developing the expertise in coating that paved the way for its entry into the specialty papers market. At that time, the first trailing blade coater in the industry was used for the Madawaska mill’s production of bread wrap. Also, in 1979, Fraser installed an AB Inventing Billblade on-machine coater—the first of its kind—for coating on both sides of the sheet to produce carbonizing papers and other grades. Currently, Madawaska is using a metering size press for coating papers such as point-of-sale receipts—a new application of that technology.

Madawaska now has on-machine coating on two of its paper machines. In addition, it has two off-machine coaters. The C-2 coater is a Rice-Barton that was installed in 1965 and is used to produce LWC and SC release grades. The C-3 coater by Beloit was installed in 1981 and is used to make LWC grades. Both off-machine coaters were rebuilt in 1997 as Fraser began its strategic focus on specialty papers.

Current product mix. Madawaska’s eight paper machines currently produce 150,000 tpy of specialty and convert- ing grades, 90,000 tpy of lightweight opaque (LWO) book papers, 60,000 tpy of coated groundwood papers, and 105,000 tpy of uncoated groundwood papers. Woodfree papers account for 59% (240,000 tpy) of the mill’s production, coated groundwood 15% (60,000 tpy), and uncoated groundwood 26% (105,000 tpy). Overall, the Madawaska mill produces 800 different types of paper. Table 1 shows the major grade categories produced on each of the mill’s paper machines.

Madawaska’s specialty grades include pressure-sensitive label facestock and release liner base, ink jet and fax paper base, thermal coating base, sugar packets, stamp and chart papers, post-it notes, carbonizing bond and carbonless base paper, and saturating base.

In the book papers area, the mill concentrates specifically on lightweight and ultra lightweight opaque (LWO) papers—a market segment served by relatively few competitors. Despite competition from electronic media such as CD-ROM, the market is growing, although it is highly competitive. These papers are used for Bibles, financial and legal papers, scientific and medical publications, and textbooks, dictionaries, and computer manuals. Madawaska also makes publishing papers for hardcover and paperback books.

Madawaska’s lightweight coated and uncoated groundwood grades are used for directories, magazines, and catalogs. Basis weights range from 18 lb to 28 lb, brightness readings are from 60 to 76, and opacity ratings are from 69 to 86. The Fraser line includes both virgin and recycled products.

SPECIALTY PAPERS STRATEGY. According to Vanier, the earlier moves toward high-margin specialty papers at Madawaska were more “out of survival” than a calculated entry into that market. However, in the early 1990s, Fraser adopted a strategic approach for competing in the specialty papers market that involved capital investment in the latest technology, intensive customer support, detailed market research, and cultural changes within the workforce at the mill. This approach allowed Madawaska to restructure its product mix from 25% specialties to 75% specialties in just five years.

Strategy and technology. In the early 1980s, Fraser’s vice president of research & development (R&D), Dave Kerr, put together an internal team to asses both the facilities and the technology at the Madawaska mill. This team began exploring grade expansion that would not entail unreasonable financial demands, such as those for a new paper machine.

In 1992, Fraser’s former president and CEO, John Wasserlein, formed a strategic planning group to focus on specialty papers. This group built a computer model of Madawaska’s operations that could predict the financial impacts of adopting various technologies. This model helped Fraser obtain more than $60 million from Noranda Forest to finance additional projects that would allow Madawaska a complete specialty papers focus.

“Our projects were justified to our parent company by thorough studies, reconfiguration modeling, and other methods designed to show them that the ROIs would be there in terms of percentage and in terms of time,” explains Vanier. “We had to prove that we could either reduce cost or we could enter a market with higher revenues.”

In 1992, Fraser was given the go ahead to spend more than $60 million dollars on five major projects that included much of the technology targeted by Fraser’s assessment team. By 1997, the projects were completed and included the following:

• A metering size press and inline coater for the No. 7 paper machine—$11 million.

• Improvements for the C-2 winder and coater on the No. 5 paper machine—$5 million.

• An automated roll wrapping system that included plant modification to improve finished product flow and handling—$6 million.

• A $17 million project to produce high finish release and packaging papers on the No. 3 paper machine that included a new soft-nip calender, a new winder, and other modifications.

• A $25 million rebuild to convert the No. 5 paper machine from lightweight coated papers to SC release.

Market research. Central to Fraser’s specialty papers strategy is an aggressive market research policy. Fraser learned the importance of this after the bread wrap market declined, forcing the company to look at making other products.

“In specialties, you must be able to look ahead and determine what will distinguish you from competitors,” notes Vanier. “You can only do that by knowing what is going on in the market and being very aggressive.”

Vanier and a team of six work with market research consultants to assess the financial performance of particular grades, replacing those that perform in the lower 25% with new ones. Based on past experience, Vanier prefers to retain consultants that focus more on accurately predicting market direction and less on analyzing historical company performance.

Even when an aggressive market research approach is taken, Vanier warns that companies have to be aware of the risk associated with both specialty products and the technology used to make them.

“You must realize that many specialties have finite lives—particularly the high revenue products,” he cautions. “It’s certainly not zero-risk, and you really have to do your homework.”

Intensive customer support. At Fraser, everyone from sales to operations works closely with customers both during and after the product development phase. Because of the narrow specifications and shorter product life associated with specialty products, this interaction is especially important.

“You are building in properties that meet a much more specific need than a general off-the-shelf commodity paper,” says Vanier. “Extra attention to the customer is necessary not only in the development phase, but also in field support. A large part of being a specialty supplier is that you provide solutions to customers’ problems.”

To support the extensive development efforts, Fraser invested $2 million dollars in a product development center at Madawaska. As opposed to the quality control laboratories in the paper machine areas, the center develops products and tests finished products to make sure that they meet the rigid specialty requirements. The center includes a bench coater that tests, among other things, the silicon coatings used in making SC release grades. In addition, a wet laboratory is used for developing various coatings.

Despite the concentrated efforts in marketing, papermaking technology, and customer support, Vanier stresses that these efforts, while necessary, cannot eliminate the inherent risks of the specialty papers market. One reason for this is that computer and other technologies often outpace the paper industry’s ability to respond with products.

“The pace of technology is relentless, and we don’t operate in a business that is capable of responding to that life cycle,” explains Vanier. “For example, we worked with a customer for two years in perfecting a thermal fax paper. By the time we had tweaked our equipment and process to achieve the customer’s goals, that market had leveled off into a commodity market. We then had look for other products to make on that machine.”

Cultural changes. The constant search for products and papermaking technologies to satisfy specialty paper customers, along with the fast response time required, has had a significant impact on personnel at the Madawaska mill. From operations to sales, the grade transitions have presented a challenge, requiring a tremendous shift in mill culture. Vanier stresses that training resources are crucial, and that the importance of discipline is something that is usually underestimated.

Though transitions to new grades are complicated, Vanier reports a growing knowledge of the importance of being able to adapt, along with an improvment in skills. “Our employees are becoming more and more sophisticated since we require more of them in terms of knowledge of controls and equipment,” describes Vanier. “It is great when you see the realization occur that they are protecting their jobs.”

In addition to changes within the mill, Vanier also emphasizes that significant technical expertise is required of the sales staff in order to communicate with both the customer and with technical operations inside the mill. He notes that the staff has to fully understand the product and its requirements, as well as how it compliments the needs of the converter or the customer.

In order to staff its sales department appropriately, Fraser carefully chose people with the right technical/sales skills mix. Internal salespeople were selected, but Fraser also hired people with proven records in the industry in the area of technical specialty sales. Vanier says that they “have been really fortunate in discovering individuals who have this kind of special combination.” He also notes that Fraser could not have developed the customer relationships they have, particularly in the pressure sensitive labels area, without these skills.

BOOK, BIBLE, AND FINANCIAL PAPERS. In 1986, Fraser chose to enter the book papers market, marking the beginning of its migration into the specialty papers market. Fraser felt that it could successfully enter the book papers market because of its experience with coating, the availability of high quality fiber, and the size of its paper machines, which were larger than its potential competitors in the book papers market. In addition, the company was already producing about 12,000 tpy of commercial printing papers on various machines.

“As we studied the book papers market, we understood that it was characterized by customized products and small runs,” notes Vanier. “Moreover, we understood that the ability to make lighter basis weights would be a strong differentiator, which is especially true for LWOs.”

Paper machine modifications. Fraser has dedicated the No. 1, No. 2, and No. 4 paper machines to the production of lightweight and publishing papers. These machines originally produced forms bond, tablet, ledger, and coating base grades. In 1986, the No. 4 machine was completely rebuilt and the No.1 machine was significantly modified to accomplish the transition. Tables 1 and 2 list significant information about these three machines.

Since 1986, Fraser has migrated to lower and lower basis weights on the No.1, No.2, and No.4 paper machines. On the No.1 and No.4 machines, the mill concentrates specifically on lightweight and ultra lightweight LWO papers (20 lb to 34 lb). These papers are used for Bibles, financial and legal papers, scientific and medical publications, and textbooks, dictionaries, and computer manuals. They have an opacity range of 78 to 90 and a brightness range of 78 to 90.

Fraser is the leading North American producer of ultra lightweight bible papers in terms of market share. According to Vanier, this success is due to effective technical decisions, as well as an understanding of its customers.

“You really have to understand what each group within the religious community requires, since different colors and weights appeal to different religious groups,” explains Vanier. “This is why we work with merchants who have served that market for many years in order to develop special relationships with our customers.”

To produce high-end ultra lightweight opaques at faster speeds on its No. 4 paper machine, Fraser recently added a new breast roll shake and a Johnston dandy roll. Although the dandy roll is a conventional piece of equipment, Fraser added automation to it in order to run the machine at speeds of 1,800 fpm to 1,900 fpm.

The fiber mix for most of the LWOs is about 60% sulfite pulp with the balance in hardwood and softwood kraft. A filler content of 16% titanium dioxide is also used, and Vanier describes the Madawaska mill as “one of the largest consumers per ton of titanium dioxide,” which is necessary “when you are limited in strength and you need the opacity.”

Alkaline-to-acid changeover. On the No. 2 machine, Fraser produces of mixture of lightweight papers and heavier publishing papers for hardcover and paperback books. Unlike the No.1 and No. 4 machines, which operate in a totally alkaline environment, the No.2 machine switches between alkaline and acid environments, presenting technical challenges for the mill. Vanier says that the mill is “extremely careful” with both the water systems and the broke systems during a changeover.

“Among the many considerations in a changeover is that we use carbonate as a filler on alkaline grades, and you can’t use carbonate in an acid medium without real problems on the wet end, with half of the weight leaving as CO₂ in bubbles,” says Vanier. “And we can’t just flush out the system with water after a change because of environmental concerns, so you have to redirect the waters. In some cases, we actually have to acidify waters in order to make the switch.”

RELEASE AND PACKAGING GRADES. In 1979, the Madawaska mill’s No.3 paper machine was producing commodity grades such as lightweight coated (LWC) at a loss. At that time, Fraser installed the first ever AB Inventing Billblade on-machine coater on the 180-in. machine in order to produce five grades.

After one year of working with the coater, which was capable of coating on two sides, only one of those targeted grades—a carbonizing grade—was successfully produced. According to Jim Cleland, production manager for the No.3, No.7, and No.8 paper machines, the new coating technology was difficult to use because of the lack of advanced drying technology.

“After the billblade was installed, we discovered that if you put a lot of coating on both sides, coating was tracked throughout the machine,” explains Cleland. “At that time, there was no acceptable technology for non-contact drying. So, we had limited success on the No. 3 machine in the 1970s and 1980s because we just simply could not consistently make the quality that the market demanded. We would try a new grade and end up going back to essentially a forms bond with starch on each side.”

Modifications bring success. As technology matured and Fraser became more focused on its specialty papers strategy, almost $17 million in modifications were made to the No. 3 paper machine. In 1994, Solaronics gas infrared (IR) drying with spooner air turns were installed following the billblade coater.

A three roll soft nip calender stack was added for the production of machine finish release and packaging grades on the No. 3 paper machine.

In addition, a $10 million Kusters Beloit three roll soft nip calender stack was added, as was a $3 million Beloit winder. New Valmet CD and MD controls, process computer enhancements, and Centricleaner additions in the wet end were also added. Tables 1 and 2 list important features of the No. 3 paper machine.

With the new equipment, the No. 3 paper machine, which runs between 900 fpm and 1,300 fpm, now makes high quality, high finish thermal release, film coated offset, and both grease-resistant and non-grease-resistant packaging grades. Currently, about 30% of the No. 3 machine production is machine finish (MF) release papers. However, Fraser’s Bladepak packaging grade is seen as the machine’s most promising new product. Cleland says the carbonizing grade made on the machine is on the decline, the MF release is a mature grade, and Bladepak is a growth grade

The Bladepak packaging grade is a coating grade that has a very high gloss on one side, and the mill currently produces 12,000 tpy of it. As opposed to MF release, which is currently produced at a rate of 15,000 tpy and is made of 100% sulfite pulp, the packaging grade is 40% sulfite pulp with the balance in hardwood and softwood kraft. According to Cleland, the high-quality coating, combined with the new drying and calendering equipment, has allowed the mill to set new standards in packaging.

“Because of the coating, we get an extremely high gloss right off the machine, and the soft nip calender provides a densified, hard surface for excellent printability,” describes Cleland. “About 70% of the time it is used in flexographic printing applications. It is also used in applications where translucent inks give packaging a three-dimensional effect.”

Despite noting the positive effects of all the new equipment, Cleland does not solely credit those improvements for the success of the MF release and packaging grades.

“The availability of equipment is one thing, but our developing knowledge base concerning specialties is yet another,” notes Cleland. “We also are focusing more on product development, and machine efficiencies are improving as well. This machine operates at close to 90% efficiency, even while running some of these difficult grades.”

Machine chemistry. The No. 3 paper machine normally operates in an acid environment, but must be switched to alkaline in order to produce the packaging grades. The complexity of the chemistry makes for a difficult changeover, which typically takes two to four hours. First, alum is removed and the pH is adjusted. Next, alkaline sizing agents are added, along with fluorochemicals, retention agents, and other process chemicals.

Fraser designed the chemistry to give maximum fluorochemical efficiency. This is essential, not only from a cost standpoint, but also because excess fluorochemicals can cause runnability problems. According to Cleland, tight control of charge and chemical dosages is required to prevent long hay-out sessions.

“We have learned many lessons in dealing with the fluorochemicals,” says Cleland. “We trialed different chemical groups and different addition points, and have gotten ourselves to the point where it’s not quite such an adventure. We now have sophisticated procedures for dealing with the chemistry.”

Product development. Cleland notes that operations personnel at the Madawaska mill often work directly with customers to develop particular grades, making sure that the requested specifications are feasible. In addition, he emphasizes that they are always looking for products that compliment each other, in order to provide full service for customers.

“In one case, we were already making a direct thermal release grade for the face stock on labels,” describes Cleland. “We discovered that a company new to North America was looking for a paper supplier for a labeling application, and we worked with them to develop the backing paper for the labels as well. We now enjoy more than 75% of that company’s business.”

To improve formation on SC release grades, a 60-in. Johnston dandy roll with a fine mesh rotating screen was installed on the No. 5 paper machine.

SC-RELEASE GRADES. As part of the strategic focus it adopted in the 1990s, Fraser began looking for ways to improve the profitability of its No. 5 paper machine, which was producing LWC. While researching potential grades, Fraser saw that the supercalendered (SC) release market was growing at 7%/yr to 8%/yr. SC release paper composes the back of many pressure-sensitive labels and must be very uniform in caliper. Fraser felt that it could successfully modify the LWC machine, which had been originally installed in 1930, to produce such a product.

According to Vanier, Fraser discovered that potential competitors in the SC release market had smaller machines than the No. 5, which has a 208-in. trim width, and none of them were integrated. In addition, Fraser thought it could improve upon the process its potential customers were using.

“The existing SC release paper was not a coated product,” describes Vanier. “For years, it was made by saturating a very dense sheet at the size press, taking it off the paper machine, and putting it through supercalenders to densify it even further. We felt that we could adapt our existing equipment to make a known product in a different way.”

The rebuilt C-2 off-machine coater features Yankee dryers with propane-fired air caps, gas IR drying, new coating heads, and a new a.c. drive system.

Equipment modifications. In 1995, Fraser began a $25 million project to rebuild existing equipment to produce SC release grades. The modifications were to affect the No. 3 paper machine, the C-2 coater, and the No. 1 super- calender. Tables 1 and 2 show the important features of the No. 5 paper machine.

Changes to the No. 5 paper machine were extensive. In the stock prepar- ation area, slotted screening and Valmet Centriscreens were added. Also, modi-fications were made to the broke handling system to improve segregation, since the SC release machine runs next to the No. 6 groundwood content LWC line.

On the wet end, the angle of the existing Valmet fourdrinier was changed to improve formation for the more highly refined, heavier basis weight grade, and vacuum boxes were added. In addition, a new breast roll shake and a 60-in. Johnston dandy roll with a fine mesh rotating screen were installed. To dry the heavier grade, four additional dryer cans were added to join the long and short sections, making the drying section 125 ft long.

After reeling, the SC release moves to the C-2 coater, where the critical sili- con barrier coating is applied. Originally installed in 1965, the Rice-Barton coater can apply a different coating to each side of the sheet. It features two Yankee dryers with propane-fired air caps, Impact electric and gas IR drying, a flow detector, coatweight application sensor, and a Valmet gauging system that monitors MD weight and MD and CD moisture. In addition, an advanced GAW coating kitchen allows operators to easily dial in formulas. In 1997, Fraser upgraded the C-2 coater, installing new Jagenberg coating heads and a new Allen-Bradley a.c. drive.

After coating, the SC release moves to the Beloit A-frame nine-roll supercalender stack where sheet gloss and densification is obtained. In April 1997, the No. 1 supercalender was rebuilt by Beloit to obtain the desired gloss and caliper uniformity. The rebuild included Measurex MX Open MD/CD controls, Devron Glosstrols, Beloit controlled crown rolls, and a new Allen Bradley a.c. drive. According to Thomas Dyke, manager of coated groundwood paper operations at Madawaska, the rebuild was successful.

“We bought new bypass rolls in order to operate the stack at higher temperatures, and we bought new synthetic covered rolls to replace the cotton ones,” says Dyke. “We couldn’t have produced the required gloss and smoothness without the higher temperatures.”

Startup and current operations. In June 1997, Fraser began producing high-end SC release papers on the No.5 paper machine, making it the largest machine producing those papers in North America. The paper machine operates in an acid papermaking environment, since an alkaline environment can cause silicon cure retardation. The furnish used is almost 100% internally supplied sulfite, although small amounts of hardwood kraft are sometimes supplemented. Dyke says the machine is running at an 85% efficiency rate after some startup problems were corrected.

“SC release is a very difficult grade to process from the standpoint of what we call stickups,” says Dyke. “Stickups are when any moisture bonds to the sheet, which causes problems on the coater. We just had to get our moisture sensors calibrated properly, so those problems are pretty much behind us now. Our operators did a really good job converting from LWC to specialty papers—it’s not easy.”

The Madawaska mill is currently producing 50,000 tpy of SC release papers. Although some LWC and some thermal precoat grades are still made on the machine, the product mix will probably change to almost 100% SC release in the near future.

THERMAL PAPERS. The Madawaska mill’s No. 7 paper machine has produced a variety of grades since its installation in 1958. In the early years, this paper machine produced performance bond, forms bond, and telephone directory papers. In 1992, Fraser started working with a customer to develop a high-quality thermal fax paper on the No. 7 paper machine in hopes of improving the machine’s profitability.

Metering size press. Central to Fraser’s strategy for developing a thermal fax paper was the ability to uniformly coat the 100% sulfite sheet at speeds of more than 2,000 fpm. In 1992, the 215-in.-wide No. 7 paper machine was using an inclined size press to apply starch to the bond papers produced on it. To develop the thermal grade, Fraser began looking for on-machine coating technologies.

“We were looking for an on-machine coating technique that would allows us to run the machine at speeds of up to 2,400 fpm,” says Cleland. “Through our experience with the billblade coater on the No. 3 paper machine, we knew that blade technology was not a candidate. We were really looking for a situation where we could meter coating onto the surface of a roll, so the metering size press fit the requirement.”

To select a metering size press, Fraser ran trials in Europe with different suppliers. For the first time, Fraser included its potential customer in the pilot work. After the trials were completed, the Valmet Sym-sizer with gas IR dryers was chosen. However, by the time the metering size press was installed in 1994, the thermal fax grade had peaked, so Fraser had to look at other applications for the new technology.

“Thermal fax grades were replaced by thermal point of sale, thermal label, and other thermal grades,” explains Cleland. “However, the other grades had higher smoothness requirements than we could achieve with the metering size press, so we had to make modifications.”

Thermal point of sale papers are used for ATM, gas station credit card, and other receipts. To achieve the higher smoothness levels required by these products, Fraser has developed a proprietary method of using the metering size press to apply coating. This method is now working successfully, and the mill is currently scaling up to 25,000 tpy of thermal precoat grades on the No.7 paper machine. This machine also produces coating base stocks for thermal and carbonless papers, LWO book papers, and film coats.

In addition to the metering size press, Fraser also installed fresh water filters and upgraded the computers on the No.7 paper machine. New coating, a save-all replacement, and fourdrinier vacuum system were also for improved coating and wet end efficiencies. Table 1 lists the distinguishing features of the No.7 paper machine.