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Weyerhaeuser begins bid for Willamette Weyerhaeuser Co. formally launched a hostile takeover attempt of Willamette Industries Inc. in November, announcing a tender offer of $48/share to Willamette shareholders. The tender offer values Willamette at approximately $5.4 billion, said Weyerhaeuser, based on 112.5 million shares outstanding on a fully diluted basis. Weyerhaeuser proposed the same deal to Willamette's board of directors in early November, but the board rejected the all-cash offer as not in the best interests of shareholders, and said its larger rival was trying to "steal Willamette on the cheap". In addition, Weyerhaeuser agreed to assume $1.7 billion of debt, making the total value of the transaction approximately $7.1 billion. Willamette urged shareholders to hold off on accepting the tender offer until the board makes a recommendation. Analysts said Willamette may negotiate for a higher price, with a final deal around $55/share, possibly a bit higher.Willamette's bylaws allow the owners of just 10% of the company's stock to call a special shareholders' meeting, but 80% of the shares are required to replace all the directors at once. Greif to double with Royal Packaging buy Greif Bros. Corp. stands to double in size with the planned purchase of Netherlands-based Royal Packaging Industries Van Leer N.V. for $620 million, including debt, from Huhtamaki Van Leer Oyj of Finland. The company plans to expand from a U.S.-based market player to a world leader in industrial shipping containers. Greif already maintains that it is the largest U.S. producer of industrial shipping containers, with 26 fibre drum plants, 11 steel drum plants, five plastic drum plants, and three plants capable of a combination of fibre, steel, and plastic drums-all in the U.S., Canada, and Mexico. The company also has one intermediate bulk container (IBC) plant, one reconditioning facility, and two pallet operations. Overall, it has industrial shipping container plants in 23 U.S. states, three Canadian provinces, and one state in Mexico. With the Van Leer assets, Greif will operate in 45 countries including in Asia and Latin America, and with the goal of being the No. 1 or No 2 supplier in each regions for industrial shipping containers. Greif has two multiwall packaging plants, 20 corrugated plants, and two containerboard mills in the U.S. Greif expects to pay for the Van Leer acquisition cost with a loan from a syndicate of lenders. The company's goal will be to pay down debt as quickly as possible and increase profit margins at a rate greater than what Greif has achieved. G-P begins new year as world tissue giant
Georgia-Pacific Corp. has become the world's tissue paper superpower with completion of a $7.3 billion acquisition of Fort James Corp. The deal won anti-trust clearance from the U.S. Justice Dept. after G-P agreed to divest its existing commercial/industrial tissue business-including approximately 368,000 tpy of production capacity and more than 637,000 tpy of converting capacity at nine U.S. locations. G-P said it expects to earn roughly $2 billion from divestitures including three market pulp mills, its chemical units, selected paper mills and sawmills, and the tissue plant. The new G-P will have total estimated tissue production capacity of about 2.95 million tpy in North America after the sale of G-P's away-from-home assets. Fort James has additional total tissue capacity of about 900,000 tpy in Europe.
Canada 3Q earnings up on strong demand Third-quarter earnings for Canadian pulp, paper, and forestry companies were up slightly based on strong demand and pricing for market pulp and newsprint, the country's two leading pulp and paper products. However, sharply lower prices for softwood lumber and other wood products dragged profits down for many Canadian producers. A short list of Canadian results for the third quarter shows profits up 7.6% to C$325.8 million from C$302.9 million a year ago. Net sales increased 6.6% to C$5.9 billion from C$5.5 billion in the third quarter of 1999. Abitibi-Consolidated Inc., the world's largest newsprint producer, reported stronger than expected third-quarter earnings of C$108 million, compared to pro forma profits of C$48 million a year ago, because of $95/tonne in newsprint price increases in April and September. The current results included a C$16 million pretax charge in connection with the merger of Donohue Inc. If the charge had not been included, Abitibi would have reported a profit of C$0.27/share, beating analysts' estimates. The company's third-quarter net sales rose by 15% to C$1.74 billion from C$1.51 billion a year ago. Net earnings for the nine months ended Sept. 30 improved 65% to C$220 million, compared to net earnings of C$133 million in the same period of 1999. The improvement in earnings resulted from higher selling prices for Abitibi's pulp and paper grades and lower manufacturing costs despite higher fiber and energy costs and lower lumber prices. Media and publishing giant Quebecor, which controlled newsprint producer Donohue before it merged with Abitibi, said it remains dissatisfied with Abitibi's management. Quebecor said the recent earnings improvement is largely due to the contribution of Dono-hue. Prior to the merger, Abitibi lost C$37 million in last year's third quarter, while Donohue had profits of C$47 million. Abitibi said in a press release that it is in "total disagreement" with Quebecor, saying that Quebecor is voicing "inappropriate, incomplete or inaccurate statements" about Abitibi's management, operations and results. Abitibi said it is also surprised at Quebecor's areas of concern and apparent appraisal of management performance that were never raised before, even at the board level, where Quebecor is represented.
Bowater to convert Catawba news PM Bowater Inc. plans a $182 million project for converting a 260,000 tpy machine at the Catawba, S.C., mill from newsprint to coated groundwood papers. The project also calls for Bowater to construct two additional Nuway plants that convert newsprint to coated groundwood grades. The company expects to complete both pieces of the project over the next two years and phase in the coated groundwood capacity as needed in the market. The projects are part of Bowater's strategy to reduce some of its North American newsprint capacity, and expand its presence in the coated groundwood papers market, according to company executives. After completion of all the projects, Bowater will have the capacity to produce about one million tons of coated papers, including an estimated 700,000 tons of coated groundwood at Catawba. With one million tons of coated groundwood capacity, Bowater would have an estimated 18% share of capacity of the 4.6 million tpy North American coated groundwood market. The planned conversion at Catawba and the Nuway projects are efforts at moving further into the coated papers market, according to the company. The two Nuway converting plants included in the Catawba project will cost $38 million each and be able to each produce 95,000 tpy of coated paper. With all three plants, the company's Nuway capacity would total 345,000 tpy. A start-date for the projects has not been specified, but company officials said they expect the Catawba conversion to be completed by mid-2002. PM No. 3 will continue producing newsprint until the conversion is completed, and then will make both coated and uncoated groundwood papers with complete conversion to lightweight coated paper production by mid-2004. Once completed, the converted machine will have the capacity to produce about 330,000 tons of lightweight coated groundwood papers. The company said about 40-55% of the furnish for the machine will come from kraft pulp.
Abitibi, Bowater announce price hike North American newsprint giants Abitibi-Consolidated Inc. and Bowater Inc. have informed customers they plan to implement an 8% increase on standard newsprint, effective Mar. 1. The $50/tonne increase, if successful, would bring the price for newsprint in North America to $660/tonne on both the East and West Coasts. If successful, this would be the fourth increase in 18 months. With the past three increases newsprint prices rose 25% to its current averaged level of $610/tonne.
Mead buys Moore carbonless plants Mead Corp. reached an agreement to acquire the carbonless coating operations of Moore North America. The deal includes Moore's Fremont, Ohio, coating facility, and coating equipment from Moore's Visalia, Calif., plant. Terms of the proposed deal were not disclosed. With the Moore assets, Mead would increase its carbonless copy paper capacity by 26%. In addition, Moore North America, a subsidiary of Toronto-based Moore Corp. Ltd., also announced its intention to enter in a multi-year supply agreement for Mead to be its exclusive supplier of carbonless copy paper for the U.S. and Canada. Under the deal, Mead would acquire Moore's 76-in. coating machines at the Fremont plant and its two 62-in. coating machines at the Visalia plant. Mead will increase its annual production capacity of carbonless copy paper to 290,000 tpy from 230,000 tpy. Plainwell shuts mill; files for Chapter 11 Plainwell Inc., which produces consumer tissue products and specialty packaging papers, has stopped production at its Plainwell Paper Co. mill in Plainwell, Mich. The mill produces release base papers for labels, coated and uncoated book and cover stock, and technical specialties on three small paper machines, plus two supercalenders and finishing equipment, and has the capacity to produce 280 tpd. The mill has 291 employees, including 230 union members. In addition, Plainwell announced it has filed a voluntary petition for reorganization with the U.S. Bankruptcy Court in Wilmington, Del. The Chapter 11 filing will allow the specialty paper and tissue manufacturer to continue to conduct ordinary business while it attempts to implement a financial reorganization plan. Along with its Chapter 11 filing, Plainwell immediately sought preliminary court approval for a new $55 million debtor-in-possession (DIP) financing facility to be provided by Congress Financial Corp. KPS Fund to acquire Crown Vantage assets KPS Special Situations Fund L.P. of New York has signed a letter of intent to acquire the specialty packaging and fine paper business of Crown Vantage Inc. for about $25 million. The business being acquired is a leading manufacturer of specialty packaging and text and cover papers, which are marketed under the name of Curtis Fine Papers. The business consists of three specialty paper mills located in Port Huron, Mich., Milford, N.J., and Adams, Mass., along with a coating facility in Richmond, Va. Two text and cover mills are located in St. Andrews and Penicuik, Scotland. Crown Vantage permanently closed its Parchment, Mich., specialty paper mill in August, 2000. The new business is expected to produce nearly 200,000 tpy of specialty, text and cover papers, and generate revenues in excess of $275 million a year, and will employ over 850 people in the U.S. and the U.K. KPS will form a new entity to purchase the operating assets from Crown Vantage, which is under bankruptcy court protection. KPS agreed to purchase the assets for approximately $25 million, including $17.5 million in cash, plus subordinated notes issued by the new company to the Crown Vantage estate with a face value of $7.5 million. KPS will make a $10 million equity investment to fund the transaction.
IP's Camden, Ark., mill not for sale International Paper Co. (IP) said its Camden, Ark., kraft paper mill is not for sale, despite a union effort to try to buy the mill. According to IP, the company is trying to take capacity out of the industry, and selling the mill to another company would defeat that purpose. The Camden mill produces 260,000 tpy of unbleached kraft bag and multiwall sack paper and employs approximately 580 people. Officials with the Paper, Allied-Industrial, Chemical & Energy Workers International (PACE) union, which represents 310 of the Camden mill workers, convened a meeting on Oct. 30 to rally support for what union officials called a "committed" buyer that wants to purchase the mill. Union officials said the buyer would keep the mill open and preserve most of the jobs. The officials would not reveal the name of the potential buyer, saying only that it is "an established paper company." L-P to sell Samoa, Calif., pulp mill Louisiana-Pacific Corp. (L-P) has reached a preliminary agreement with LaPointe Partners, Inc. to sell its 200,000 mtpy Samoa, Calif., kraft market pulp mill for $79 million including cash and preferred stock. Once the transaction closes L-P will have only one pulp mill left in its portfolio in Chetwynd, B.C. The Samoa deal, worth $46 million in cash and approximately $33 million in preferred stock, caps over two years of searching for a buyer. The Samoa operation, located in northwestern California, was the first bleached kraft mill in North America to eliminate the use of chlorine in the bleaching process. The mill is able to recycle wastewater from the bleaching stage and in doing so meets requirements set in a 1992 settlement involving L-P, the Surfrider Foundation, and the U.S. Environ-mental Protection Agency. Rayonier to focus on fiber, timberlands Jacksonville, Fla.-based Rayonier Inc. said it will focus on its two strongest businesses, performance fiber and timberland management as a platform for growth and stronger cash flow. The specialty cellulose maker is also looking at divesting non-core assets, including a New Zealand medium-density fiberboard (MDF) plant and a 25% interest in 41,000 acres of timberland in New Zealand to its partner. Rayonier's Performance Fibers group is the world's premier producer of specialty cellulose for use in high value acetate, ethers, and viscose markets. Earlier this month, the company said it is constructing a 12,000 tpy state-of-the-art production facility for its new NovaThin line of engineered absorbent products. Rayonier, which has 2.4 million acres of timber in the U.S. and New Zealand, plans to reduce debt incurred from its $710 million timberland purchase from Smurfit-Stone Container Corp. in the Southeast U.S. in October 1999.
American Tissue revives Memphis mill American Tissue Corp. is closer to fully restarting its newly acquired paper mill in Memphis, Tenn., by launching one machine and ratifying a 10-year contract with workers at the mill. The mill is producing bathroom tissue and towels on one machine, but expects to start-up the second unit by the end of this year. The mill has been listed with capacity of 110,000 mtpy. New converting equipment has been ordered and began arriving in November. The company expects all the equipment by the second quarter of next year. In addition, the 10-year contract with workers includes a wage increase, 401K enhancement, and extended training. The Memphis mill is represented by the Paper Allied-Industrial, Chemical and Energy Workers International Union (PACE).
Willamette moving on Okla. box plant Willamette Industries Inc. plans on constructing a new corrugated box plant in Oklahoma City as the company's box busi-years. The company said the box plant would be "small" and serve existing customers in the area as well as possibly new business. A company executive said the company's corrugated business grew about 19% the last two years-compared to the industry growth of 3.8%. Willamette brought on three new box plants in the last year: two acquired in Mexico and one recently opened near Phoenix. In 1999, Willamette shipped an estimated 24.3 billion ft2 of corrugated and was the seventh largest U.S. producer. The company board of directors approved the box plant project as well as relocating and modernizing the Kingsport, Tenn., cut sheet plant and modernizing the pulp facility at the Albany, Ore., mill. The Kingsport sheeter plant makes cut-size office paper and will be moved to a new site near the Kingsport mill equipped with a new 10-pocket sheeter. The pulp work at Albany will not increase capacity, but help the mill meet Cluster Rule requirements.
ForestExpress signs on equity partners E-commerce company ForestExpress announced partnerships with two more large U.S. paper and paperboard producers, Willamette Industries Inc. and Boise Cascade Corp. The two companies signed on as equity partners and each will have one representative on the ForestExpress board of directors. With Willamette and Boise Cascade, ForestExpress has equity partnerships with six the 11 largest U.S. paper and paperboard companies, including three of the largest four. The six combined manage 50% of total U.S. paper and paperboard capacity (102.5 million tons). ForestExpress plans to run an independent marketplace on the Internet for the forest products industry, linking buyers and sellers to do transactions online in what is proposed to be a more efficient and cost-saving process. Metsa-Serla buys IP stake in Zanders Metsa-Serla Oyj of Finland has finalized negotiations to purchase a 72% majority shareholding in Zanders Feinpapiere AG from International Paper Co. The purchase price is based on a total enterprise value of $316 million for Zanders. The Zanders takeover brings another 450,000 tonnes of capacity to Metsa-Serla's list of paper mill assets. Zanders produces coated fine paper aimed at the top end of the market at its two mills in the North Rhine-Westphalia region of Germany. Zanders' production capacity is also supported by a merchant network. Following conclusion of the Zanders transaction, Metsa-Serla estimates that it will control 23% of the European office paper market, 19% of the region's printing paper sales and a 16% of Europe's magazine paper market. Nippon, Daishowa close on merger Japan's Fair Trade Commission (FTC) has gave the green light in December to the proposed merger between Nippon Paper Industries and Daishowa Paper Manufacturing. The deal got the go-ahead on the condition that the two papermakers sell off assets equivalent to 8% of their total production and reduce their stakes in three major sales agents. FTC is reportedly concerned that the plan will give the merged company, Nippon Unipac Holding, a dominant market share of key grades in Japan. The merger is due to take place on April 1, and will give Nippon Unipac a total capacity of 5.9 million mtons/yr of paper and 2.2 million mtons/yr of board. As a result, Nippon Unipac will hold a 32% share of the domestic paper market, passing the current leader, Oji Paper, which has a 24% market share, according to FTC.
In the August 2000 issue of Pulp & Paper (p. 61) of the Supplier News section, you published an item on the results of the Dutch litigation between Nalco Chemical Company and Eka Chemicals. Although the material published was accurate, some significant details were left out. The omission of these details creates an incorrect impression suggesting the decision had a more far-reaching impact than it actually does. To clarify the situation, here is a complete description of the court's decision and what it means for the worldwide papermakers. On May 25, 2000, The Court of Appeals in The Hague ruled on Eka Chemical's challenge to Nalco's borosilicate microparticle technology. Of the eight claims made, four were completely denied. However, the Court granted Eka their request to prohibit Nalco from selling borosilicate, Nalco 8692, in The Netherlands.The initial filing requested that the Dutch Court grant a cross border injunction to prevent any further sale of Nalco 8692 outside of The Netherlands. The Court clearly denied this request on various grounds. The result of this action is to limit sale of Nalco 8692 only in The Netherlands. The decision does not prevent or limit sales activities with Nalco 8692 anywhere else in world. Furthermore, the specificity of patent laws from country to country does not permit extrapolation of court decisions across country borders. Nalco remains committed to this outstanding new technology, especially with the knowledge that several of the world's leading professors and colloid scientists have established clear and significant differences between colloidal silica and borosilicate, Nalco 8692. The differences, as identified by substantial laboratory measurements, established the unique character of Nalco 8692, and that it is not, as has been claimed by Eka Chemicals, a simple modification to colloidal silica. The new borosilicate microparticle technology, Nalco 8692, which is the microparticle component of the Nalco ULTRA POSITEK program, has proven with machine retention and drainage performance that it provides the papermaker with technology distinct from all other microparticles. Nalco remains committed to meeting the needs of the worldwide paper industry with innovative new technologies. This has been and will continue to be the focus of Nalco's research and development efforts. Nalco will continue to bring new technology to the worldwide marketplace and protect our customers' right to enjoy the benefits of its use.Gerard Rose, Marketing Manager
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| Pulp & Paper Magazine, January 2001 | CONTENTS | ||
| Columns | Departments | Focus/Features | News |
| From the Editors | News of people | Outlook 2001 | Month in Stats |
| Maintenance Management | Conference Calendar | Capital Spending | Grade Profile |
| Comment | Product Showcase | CEO of the Year Award | News Scan |
| Information Technology | Supplier News | Pulping & Bleaching | |
| Safety Management | |||
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