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SC paper growth to boost filler pigments
Both technology developments and forces impacting the market for paper and paperboard grades drive growth in the use of papermaking chemicals. In the case of filler pigments (and, in turn, retention systems and other wet end chemicals), one of the brightest areas in the next couple of years will be supercalendered (SC) papers. At play are both technology changes, like modifications in raw material use caused by process changes or switches from one pigment to another, and market growth, such as SC paper capacity and demand.
AN EXCEPTION TO LOW GROWTH.
Growth in the North American market over the next few years is expected to be modest for many grades, including heavy users of pigments, binders, and retention aids such as printing and writing papers. Demand for coated papers will expand, but only modestly, as advertising growth slows, possibly dramatically. Demand for uncoated free-sheet in 2000 actually declined despite solid economic growth. Some pundits and analysts attribute this notable and worrisome development to displacement caused by electronic media, e-business, etc. A key factor suppressing growth in North American output in general has been rising imports, aided by a strong U.S. dollar.
However, there is a bright side and that's the outlook for higher quality uncoated groundwood printing papers. Demand for SC grades‹which include SC-C, SC-B, SC-A and soft-nip calendered grades‹is expected to post solid growth.
SC paper demand in North America grew at the average annual rate of 14% through much of the 1990s, and is expected to continue to grow by another 10% annually, through 2001, according to industry consultant Kline & Co. Uncoated groundwood paper as a whole will continue to grow by only about 3% annually, and the overall printing and writing paper market is projected to grow at only around 1% through 2001.
MAJOR CAPACITY GROWTH.
U.S. demand for SC grades is currently about 2.5 million tons. Three major SC expansions will potentially add more than 500,000 tons of capacity by year-end 2001. Alliance's new SC-A paper machine is on line in Canada, and two major SC projects will come on line this year: a major rebuild by Great Northern Paper at Millinocket, Maine (September), and Abitibi-Consolidated in Lufkin, Texas (postponed to mid-year). Some of this tonnage will likely, particularly initially, be high-brightness lower-gloss grades, not SC papers. However, these big machines have advanced‹and expensive‹calendering systems designed to produce high-quality top-end grades, not upgraded newsprint.
KAOLIN VS. CARBONATE.
Exactly which pigment‹and wet end chemical system‹will be used in all of these is of interest. Alliance‹and most others‹use kaolin for SC-B and SC-A grades. SC-A-plus grades are predominantly made using kaolin as well. Using calcium carbonate, Madison Paper is an exception. Great Northern is also building a new precipitated calcium carbonate (PCC) plant and it's assumed the mill's new SC grades will be carbonate based. The Lufkin machine, however, is reported to be starting up on kaolin.
Will this sector move to widespread use of calcium carbonate, as did the huge uncoated free-sheet market in the late 1980s and 1990s? It's a big question, and with kaolin accounting for about 80% of the market, according to one estimate, any shift is big business. There also have been several trails run to assess other fillers at SC mills.
It appears that papermakers, ever conservative, are currently moving slowly to embrace this technology. A variety of factors are involved. These include long-held concerns over fiber darkening in alkaline systems‹issues relating to printing and mill considerations. Carbonate-filled sheets print differently than kaolin-loaded sheets due to porosity differences and, while not insurmountable, cause some concern. And, at multi-grade mills, common whitewater systems are a problem when one machine is running acid and another alkaline. Another factor that varies widely by mill and specific site conditions is cost. Many SC mills are modest in size, making it more difficult to justify an onsite plant.
A final issue is the frenzy of mergers that has produced companies with often large and diverse grade lines. This has actually slowed interest in developing sheets with new and improved properties based on new chemistry. Why? Early on, traditional producers of SC pushed hard to displace lightweight-coated grades in key markets. To do this, they wanted brightness and gloss as high as possible. However, some of these same companies are now competing against their own product lines. This has slowed development efforts considerably while producers contemplate grade and market positioning and grade differentiation.
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