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Canadian industry shows improvements With record shipments, higher selling prices, and improved profits in 1999, the Canadian pulp and paper industry ended the century on an up note after a disappointing decade, according to the Canadian Pulp and Paper Assn. Strides made by the Canadian industry were spurred by three factors: U.S. and Asian market growth, capacity shutdowns, and lower unit costs. Economic recovery in Asia both increased consumption there and reduced the volume of Asian paper available on the export market. Canadian shipments increased 9% in 1999 to 31 million mtons, a record level not seen since 1997, when shipments totaled 24 million mtons. Driving the increase was newsprint, printing and writing papers, packaging, and market pulp. Domestic shipments grew 7% while shipments to the U.S. were up 9%. Shipments to Asia and Europe were up 17% and 5%, respectively. The only decline was recorded in shipments to Latin America, which were down 4% compared to 1998, he said. After a 23% decline in 1998, shipments to Asia (excluding Japan and China) were up 25% in 1999.
P&G slates two new tissue machines Fresh from a successful startup of a new tissue machine in Missouri, Procter & Gamble Co. (P&G) said it will start up a new 75,000 tpy tissue and towel machine in mid-2001 at its Mehoopany, Pa., mill and will add a second machine at the site at a later time. Nancy Swanson, v.p. and gen. mgr. of P&G’s tissue and towel products business in North America, noted the company’s tissue and towel volume in the U.S. has grown by nearly 30% over the past five years. The company launched a new 65,000 tpy machine at Cape Girardeau, Mo., in December. Details of the Mehoopany project were not provided, although a company spokesman said P&G’s total investment was $350 million. That is similar to the company’s plans in Missouri, where a second machine is scheduled to start up within 18 months. * New owners to reopen New York mill New York Gov. George E. Pataki announced that Metro Paper Industries will invest $12 million to reopen the former Fort James tissue paper mill in Carthage, creating 75 new jobs. The mill was closed in April 1998. Metro Paper is a Toronto, Ont.-based converter of tissue with 30 production lines at its Scarborough, Ont., facility serving commercial, retail, and private label markets. Phase I of the expansion project will include the installation of four paper converting lines currently controlled by Metro Paper. Phase II will involve the installation of a new paper machine which is expected to be completed within 18 months. Further details were not available. New York state officials provided Metro Paper $250,000 for acquisition of equipment and $100,000 to the local development corporation to meet infrastructure and facility development needs prior to the sale.
Two Beloit units sold; more to be sold Two small divisions of Beloit Corp. were approved for sale in early February by a bankruptcy court judge in Delaware. Two other large divisions of Beloit Corp. were expected to be approved for sale at a hearing in February in bankruptcy court. Beloit, once one of the world’s largest paper machine makers, is a subsidiary of the Chapter 11 bankrupt Harnischfeger Industries Inc. Harnischfeger owns 80% of Beloit. The woodyard group, which develops systems for handling wood, chip screening and processing, and pulping was sold to a management buyout group. The OASIS unit which builds optical technology for helping to keep paper machines running in sync, was also sold to a management buyout group. Sale terms were not disclosed. The other two units for sale are the paper aftermarket and roll covers division, and the pulp and finishing division. Valmet Corp. had the best bid for the paper aftermarket/roll covers division, and Groupe Laperriere & Verrault Inc. of Montreal had the winning bid for the pulp and finishing division.
Weyerhaeuser plans Okla. improvements Weyerhaeuser Co. revealed plans to spend more than $100 million on rebuilding and upgrading the 240,000 tpy No. 2 corrugating medium machine and expanding the recycling system that feeds the machine at its massive Valliant, Okla., containerboard mill. Project work should begin this summer with the rebuild slated to start in first quarter 2001 and be completed in the second quarter. The project focuses on improving the quality of the medium and the sheet’s runability for converters. The plan keys on lowering the production cost for the machine by using more recovered paper and expanding the mill’s recovered paper pulping system. The 1.1 million ton Valliant mill is Weyerhaeuser’s largest containerboard mill and is the third-largest U.S. containerboard mill. Norampac Inc. plans to install a soft-nip calender and coater on its one machine at the Kingsey Falls, Que., mill to produce coated linerboard. Plans call for installing the calender this year and for installing the coater in 2001. The estimated cost for the soft-nip calender is C$2-$3 million, and the estimated cost for the coater is C$3-$5 million. The 72,000 mtpy machine now makes recycled linerboard, as well as white top and colored linerboard. About 30% of the machine’s output is white top. The coated linerboard is expected to run in quality between white top linerboard and SBS boxboard. Norampac also plans to spend C$5 million this year on improving the system for cooking chip sawdust at its two-machine kraft linerboard mill in Red Rock, Ont. The goal of the project for the 380,000 tpy mill is to reduce energy, fiber, and production costs with an improved system for processing sawdust. The mill already uses sawdust and chips for its furnish. Florida Coast paper mill to stay shut A judge in Delaware approved a reorganization effort for the bankrupt Florida Coast Paper Co. LLC that requires Smurfit-Stone Container Corp. subsidiary Stone Container Corp. to pay $123 million to creditors and for expenses. In addition, the bankruptcy settlement approved Jan. 6 allows Smurfit-Stone to become the full owner of Florida Coast’s 500,000 tpy kraft linerboard mill in Port St. Joe, Fla. Smurfit-Stone said it will not restart the mill which has been closed since August 1998. Stone Container and Four M Corp. originally owned the mill as part of a joint venture. Stone Container became part of Smurfit-Stone in November 1998.
Smurfit-Stone to sell Oregon City mill Smurfit-Stone Container Corp. has signed a letter of intent to transfer ownership of its Oregon City, Ore., newsprint mill to KPS Special Situations Fund L.S. of New York, a private equity fund that restructures underperforming companies, often in cooperation with employee groups. Other investors include employees and managers at the Oregon City mill. Last year, KPS acquired Champion International Corp.’s Canton, N.C., paperboard mill and liquid packaging operations. Terms of the deal, which is expected to close by the end of the first quarter, were not disclosed. The Oregon City mill produces mostly newsprint but also makes groundwood specialties and recycled-content bag papers on three paper machines. Total mill capacity is 220,000 mtpy. Smurfit-Stone Container Corp. is on track to exit the newsprint business. The $220 million sale of its Newberg, Ore., mill to SP Newsprint Co. was completed in November. The 140,000 mtpy Pomona, Calif., newsprint mill is owned by Jefferson Smurfit Group of Ireland and will operate as a stand-alone mill. A company spokesman said he believes a buyer is being sought for the mill. Proposed project selects N.Y. site Empire State Newsprint LLC has signed option agreements to buy an 84-acre parcel in Ulster, N.Y., where it plans to build a $680 million, 300,000 mtpy 100%-recycled newsprint mill. In the plans announced in February, Empire State said it was working on the project in a joint venture with Besicorp Development Inc. The project includes plans for building a cogeneration plant that would supply energy for the mill. The cogeneration plant would be a natural gas-powered facility and produce 475 MW, including all the steam requirements for the mill. Pre-application documents were filed with state permitting agencies on Jan. 28. The New York State Department of Public Service and the New York State Department of Environmental Conserv-ation will do an environmental review of the proposal. * New TMP line at Pine Falls mill At Pine Falls Paper Co., Pine Falls, Man., the board of directors has approved installation of a 525 mtpd single line that will replace stone groundwood and high-yield sulfite pulp. The project is contingent on approval by the board of parent Tembec Inc., which was expected in late January. The Pine Falls mill has capacity to produce 180,000 mtpy of newsprint on two machines. If approved, supplier Valmet Corp. said equipment will be delivered in September, with startup expected during second-quarter 2001. Estimated project cost was not available.
K-C, MESC make headway on pulp mill Kimberly-Clark Corp. (K-C) and Mobile Energy Services Co. (MESC) have reached a preliminary agreement to resolve issues related to the 1999 closure of K-C’s Mobile, Ala., pulp mill. Under the agreement, energy supplier MESC has an option to acquire a portion of the pulp mill assets—a goal it has been working toward for months. MESC hopes to restart the mill at half its 560,000 mtpy capacity. A purchase agreement is expected to be finalized by June 30, according to a K-C spokesman. In addition, the plan calls for MESC to build a 165 MW cogeneration facility at the site. An MESC spokesman said the cogen facility, combined with the startup of the pulp mill, would replace some of the revenue it lost when K-C shut the pulp mill. MESC said the lost revenue forced it to file for Chapter 11 bankruptcy protection. Finally, the agreement calls for K-C to make a cash payment to MESC.
IP to eliminate 2,000 jobs this year International Paper Co. said it plans a cost-reduction program that includes the elimination of 2,000 jobs, representing about 2% of the company’s worldwide work force. The layoffs are in addition to the 1,600 job cuts announced in April after IP acquired Union Camp. IP plans to close unprofitable operations and plants that make products already in excess supply, including the closing of a masonite manufacturing plant in Pilot Rock, Ore., and a chemical plant in the U.K. * Consolidated cuts work force Consolidated Papers Inc. will cut 43 positions at its Niagara, Wis., coated groundwood pulp and paper mill during the first half of 2000 (about 9% of a staff of 480). Officials did not specify specific jobs being eliminated, but pointed out the reduction includes 40 union-affiliated employees and three vacant salaried positions which will not be refilled. A Consolidated spokesman said the job cuts have nothing to do with the $153 million in equipment upgrades made to the Niagara mill since its purchase in July 1995. He added that the company is considering the option of making more work force reductions, but would not elaborate as to where and how many people may be affected. * Weyerhaeuser files lawsuit versus union On Dec. 27, Weyerhaeuser filed a breach of contract lawsuit against the union that represents workers at its Valliant, Okla., mill. Filed in the Eastern District Court of Oklahoma, the lawsuit could be heard by a judge as early as April, the company said. Weyerhaeuser filed the lawsuit seeking monetary damages against the Paper Allied-Industrial Chemical and Energy Workers Union (PACE) Local 162 and the PACE International Union. The company contends that the union failed to meet its obligations agreed to in a 1995 labor contract. The company said PACE agreed to work with the company on designing and implementing an advanced work system, a new organization to improve the mill’s competitiveness by better engaging employee skills and teams. PACE Intl. President Boyd Young responded to the lawsuit by saying, “This lawsuit has the potential to disrupt the productive and mutually beneficial relationship our two organizations have enjoyed in recent years.”
New type of tobacco paper introduced Schweitzer-Mauduit International Inc and Philip Morris Companies Inc. jointly announced the development of a new type of tobacco paper that might reduce the likelihood of a cigarette igniting certain fabrics. The technology behind the “fire-safe” cigarette involves adding extra rings or layers of paper at certain points along the barrel of a cigarette. The extra rings of paper reduce the amount of oxygen entering the cigarette, slowing the rate at which it burns and the heat it generates. In one test conducted by the National Institute of Standards and Technology, cigarettes using the new paper ignited a thick cotton canvas four times in 96 trials. In contrast, a standard cigarette ignited the canvas material in 70 of 96 trials. Philip Morris plans to test market the new paper in Merit brand cigarettes. If it proves successful, the company said it could expand the paper’s use to Marlboro. Schweitzer-Mauduit is the largest producer of cigarette papers in the world and the sole supplier to Philip Morris U.S.A *
Abitibi continues with conversion Abitibi-Consolidated Inc. on Jan. 23 shut the No. 1 paper machine at its Beaupre, Que., mill as part of a C$50 million capital project to convert the machine’s production to a new type of groundwood paper, according to a mill official. The project was originally scheduled for completion in 1999, but was delayed due to a strike during 1998. The project includes the addition of a coating kitchen, a shoe press, a size press, and modifications to the dryer sections, the mill official said. The project will increase the speed of the No. 1 machine to 2,500 fpm from 2,250 fpm with a resulting capacity increase of 20,000 mtpy to 110,000 mtpy. The new groundwood grade, Equal Offset, will be lightly coated with a brightness of 83. The mill expects to restart the idled machine during the last week of February and begin producing the new grade in early April.
Gallaher Thorold sale nears completion A deal to transfer the assets of the Gallaher Thorold Paper Co. in Thorold, Ont., to the Butler Group was expected to be completed in January. The new ownership group is headed by Jeffrey Butler, a former senior executive with Domtar Inc. When the mill closed last May it employed approximately 310 people and was about C$70 million in debt. The Communications, Energy and Paperworkers Union of Canada (CEP) represents about 270 of the mill’s workers. The union has been negotiating with the new owners over jobs, wages, and rehiring practices. About one-third of the employees are expected to be rehired once the mill reopens. Plans are to phase in production, starting with the No. 1 paper machine with about 60,000 tpy of capacity for recycled printing and writing papers. At full capacity, the mill operated three paper machines with more than 100,000 tpy of capacity. The new owners plan to cut costs by focusing on a smaller number of paper grades.
Domtar plans cogen plant at Que. mill Domtar Papers Ltd. plans on building a C$23 million cogeneration plant at its 550,000 tpy Windsor, Que., uncoated free-sheet mill. The plant would help reduce energy costs in what a company spokesman calls a highly competitive market, and would produce 32 MW electricity or roughly one-third of the mill’s needs. Plans call for starting construction in June with completion expected in July 2001. Domtar signed a contract with Hitachi Canada Ltd., which will work with SNC-Lavalin Group Inc., on engineering and construction for the project. Domtar now buys 100% of the electricity from Hydro Quebec for powering the Windsor mill. A Domtar spokesman would not say how much the company expects to save by building the plant. No new jobs would be created at the mill because of the plant, the company spokesman said.
Blandin Paper Co., is not currently actively pursuing plans to install a new lightweight coated groundwood papers machine at its mill in Grand Rapids, Minn. The company was listed in a table of proposed new mills and paper machine installations announced for the U.S. on p. 65 in the January issue of Pulp & Paper.
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