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| ASIA |
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New newsprint giant strides forward with globalization
Norway's Norske Skog, Canada's Abitibi-Consolidated and Korea's Hansol Paper have taken global consolidation a step further with the formation of a newsprint joint venture in Asia.
The three companies have signed a letter of intent and expect to close the transaction by the fourth quarter of 1998. The deal will create the largest newsprint operation in Asia, excluding Japan.
Financial markets welcomed the move, with one analyst describing the deal as a "strategic scoop" for Abitibi-Consolidated and Norske Skog. Some say that the ongoing financial problems in Asia could mean cheaper pickings for those prepared to wait a little longer. But others argue that if companies wait too long they will miss the best opportunities.
Each party will have a one third stake in the joint venture, which will act as a holding company for the following assets:
• Hansol's Chonju mill in Korea which
has a newsprint capacity of 1.04 million tons/yr
• Hansol's 53% stake in a 130,000 ton/yr
• newsprint mill in Shanghai, China
• Shinho's newsprint mills in Korea and
Thailand which Norske Skog is in the process of acquiring. The two mills have a combined capacity of 300,000 tons/yr and the sale should be completed by the fourth quarter 1998.
The joint venture will purchase Hansol's Korean and Chinese newsprint businesses for $1,000 million. Hansol will use the net proceeds to repay some of its existing debt. The Korean company already has a restructuring plan in place to deal with the impact on the company of the currency crisis. The latest move will help Hansol meet the tighter debt repayment schedule.
The joint venture also plans to buy Norske Skog's newsprint interests in Korea and Thailand, but the amount has not yet been disclosed.
The joint venture means Hansol will gain a realistic price for its assets and put the company on a more sound financial footing, according to Jinho Lee, Hansol's finance and investor relations manager. The move also puts the company in a strong position to exploit the fast growing newsprint markets in Thailand and China.
Analysts also expect other companies to benefit as the deal should reduce the threat of dumping newsprint in Europe or
North America, following the currency devaluations.
Analysts are keeping an eager eye on UPM-Kymmene, following a capital gain of FIM 2,100 million ($380 million) from the sale of its shares in the Finnish telecoms company, Nokia.
There was some speculation that UPM-Kymmene would use the money to finance an acquisition in the USA or Asia. But the Finnish group dismissed the news as "rumor", saying the money will be used to repay debt.
UPM-Kymmene made its mark in Asia with the APRIL deal, which involves mills in Indonesia and China. The Finnish company is also active in the USA, having paid $650 million last year for lightweight coated (LWC) producer, Blandin Paper.
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| FINLAND |
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UPM-Kymmene raises LWC capacity at Voikkaa
UPM-Kymmene is to rebuild PM 18 at its Voikkaa mill in Finland. The PM's coating section will be modernized, raising the machine's capacity by 60,000 tons/yr to 255,000 tons/yr. The paper quality will also be improved. Startup is penciled in for the end of March 1999.
The PM will produce lightweight coated (LWC) paper in a basis weight range of 60-80 g/m after the rebuild. The current set-up runs with a 54-80 g/m range.
Valmet is the main supplier and the project cost is estimated at FIM 280 million ($52 million).
The mill has four machines with a total capacity of 500,000 tons/yr. PM 11 produces 140,000 tons/yr of machine finished coated (MFC) paper. PMs 16 and 17 have a combined capacity of 160,000 tons/yr of machine finished specialty paper.
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| GERMANY |
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Mercer eye s up corrugating PM
Mercer International plans to install a 280,000 ton/yr corrugating materials PM at its Trebsen mill in Saxony, Germany. The company is in the engineering projection phase, which should be completed by the end of the year.
The project is likely to be part of a joint venture in which Mercer will hold a minority stake, while retaining full management of the unit.
Talks have also begun to arrange financing. The project is eligible for subsidies of up to 35% of the total investment cost from the local state authorities.
The Trebsen mill already has a 70,000 ton/yr PM which produces testliner and corrugating medium.
Mercer has sold its other testliner mill, a 50,000 ton/yr unit in Greiz. The buyer is a joint venture between the German papermakers August Koehler and W. Euler, which plans to invest DM 15-20 million ($8-11 million) to upgrade the mill and switch to cartonboard production. Transaction details have not been disclosed, although the sale price is higher than originally expected.
The mill was the weakest performer among Mercer's paper operations in 1997. Mercer expects the mill's long-term potential to improve considerably under the new owners.
Haindl sets LWC site
Haindl has chosen Augsburg as the site for its huge new lightweight coated (LWC) paper machine.
The new machine, PM 3, will produce 370,000 tons/yr of offset LWC paper in a basis weight range of 39-70 g/m. But the main production grammages will be 48-60 g/m. PM 3 will trim at 9.6 m and have a design speed of 2,000 m/min, but will run at 1,800 m/min.
Construction will begin in January 1999 and the machine will come on line in June 2000.
A mix of raw materials will be used - 25% each of wastepaper, mechanical pulp, chemical pulp and pigment. Up to now the company's wastepaper content in LWC has been 5%.
As part of the DM 800 million ($440 million) project, mechanical pulp production will be expanded and a wastepaper processing unit will be constructed with a capacity of some 600 tons/day. Haindl will also extend the mill's existing chemical pulp and filler processing facilities, as well as the coating color kitchen.
The new PM 3 will bring the company's total LWC production to more than 800,000 tons/yr. After the PM comes on stream, the 105,000 ton/yr PM 1 will be idled.
Augsburg has two machines. PM 1 produces film coated (FC) woodcontaining, wastepaper-based rotogravure and web offset paper. PM 2 produces 120,000 tons/yr of supercalendered, woodcontaining, wastepaper-based paper.
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| GREECE |
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MEL-Macedonian privatizes
Mel-Macedonian Paper Mills has been privatized. MEL was formerly owned by the Industrial Reconstruction Organization and the National Bank of Greece. The company has been acquired by a group of Greek firms at a cost of $7.3 million. The new owners are Etep (40%), Diamantidis (10%), Ma Bi X-G Diamantidis (5%), George Diamantidis (5%), K Economou (20%) and Eurochartiki (20%).
The company plans to invest some $10 million over the next three years to improve the quality of board production and increase output at its mill in Thessaloniki.
MEL is the largest producer of coated white lined chipboard in Greece, with a capacity of 40,000 tons/yr. A company spokesman said MEL is geographically well-placed to serve markets in the Balkans and Middle East.
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| SWEDEN |
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Stora Enso modernizes
Stora Enso is investing SEK 600-700 million ($75-88 million) in a new soda recovery boiler at the Gruvön mill. The modernization will boost market pulp capacity by 15,000 tons/yr and should be completed by early 2000.
The new boiler will replace two older boilers which would have needed extensive repairs. Investment in a new boiler will create cost savings and enable the mill to reach a higher utilization rate on its existing softwood kraft pulp capacity.
Sweden's environmental protection authorities have approved the new boiler without imposing any specific limitations.
The Gruvön mill has a total capacity of 300,000 tons/yr of softwood pulp, 75,000-80,000 tons/yr of hardwood pulp and 220,000 tons/yr of neutral sulfite pulp. Some of the pulp is integrated as the mill also produces 250,000 tons/yr of semi-chemical fluting and 280,000 tons/yr of white top liner and kraft paper.
Stora deal done and dusted
Stora has finalized a deal to buy a majority stake in the Chinese fine paper company, Suzhou Papyrus Paper.
The final purchase price will be decided in 2001, but a base price has already been established. This will alter in line with the financial performance of Suzhou Papyrus over the next three years. Stora called for the safety measure in light of Asia's financial crisis.
Before the deal, a group called Purple Charta owned 80% of Suzhou Papyrus. To gain control of Suzhou Papyrus, Stora bought a 75% stake in Purple Charta from the group's parent company, China Renaissance Industries.
Suzhou Papyrus has 120,000 tons/yr of woodfree paper capacity at its mill in Suzhou, about 90 km west of Shanghai. The mill sells the bulk of its output domestically.
The Suzhou mill started up in April 1997 and can already reach production levels of around 90,000 tons/yr. But the machine is not running at this level due to a difficult market. Sales have been hit particularly hard since April this year when the impact of the financial troubles kicked in.
One of Stora's first targets at the mill is to get the PM running at a reasonable utilization rate and make sure it can sell all of the output. A longer-term objective is to increase capacity at the mill, but there is no fixed timetable to embark on an expansion project. Before this happens, the mill will have to reach a production level of 120,000 tons/yr and secondly, Stora will need to familiarize itself fully with the Chinese working environment.
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| UK |
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Barlow Paper closes mill
Barlow Paper's Oakenholt mill in the UK has been forced to close. The company is trying to find a buyer that is prepared to restart production, but nothing is yet finalized.
The decision to close the mill "reflects the extremely adverse UK trading conditions due primarily to the current strength of sterling", according to Jeremy Bazley, Barlow Paper's managing director. Insufficient returns over several years as well as a lack of strategic fit within Barlow Paper also contributed to the "unfortunate, but necessary decision".
Oakenholt has one paper machine with a capacity of 16,000 tons/yr. It produced a range of products, including wallpaper backings, till roll papers and a variety of printing and packaging grades.
Barlow Paper will continue to operate its other two specialty paper mills, Devon Valley Industries and Henry Cooke. The company has invested 11 million ($18 million) in a new PM at the Devon Valley site and 3 million in a new flowbox and soft nip calender at the Henry Cooke mill.
Bibby changed its name to Barlow Paper toward the end of last year.
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| SPAIN |
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Trans papel seeks partner
Transpapel Eusakdi's newsprint project in Spain is back on track following three years of setbacks and obstacles.
The group is one step closer to starting construction of a proposed 300,000 ton/yr greenfield newsprint mill in Lantaron, Avala. Earlier plans to build the mill in the Navarra area had to be shelved following political changes in the region.
Transpapel had hoped to start building in the first half of 1998, but the end of 1998 now looks more likely. If all goes to plan, the company expects the new mill to come on stream in mid-2000.
Transpapel has already raised Pta 2,000 million ($13 million) in capital. Some 87% has been provided by the Liechtenstein-based financial group, Polytechnic, while the remainder has been financed by local companies. The Basque government has also granted a 20% subsidy for the overall investment costs and approved the purchase of the land needed for the mill.
The total project cost is estimated at Pta 71,000 million ($463.6 million). Negotiations are underway with a number of top European paper producers to find a strategic partner for the project. The mill's future hinges on finding an investor, but Transpapel is confident that negotiations will be finished by the end of 1998.
The group has already fulfilled all the pre-construction requirements. The Finnish company, CTS Engineering, has completed a feasibility study and all the basic engineering is finished. Transpapel has secured contracts for gas supply and the cogeneration plant. The company also holds the necessary fresh water, effluent and environmental permits.
Transpapel is in talks with both Valmet and Voith as possible suppliers of the 10 m-wide newsprint PM.
Saica seizes Sapso-Giepac
Spain's main testliner producer, Saica, has launched the first stage of its acquisition strategy with the purchase of the French packaging group, Sapso-Giepac. No purchase price was disclosed.
The Spanish group described the move as "the starting point for future operations in other countries". The choice of France has the advantage of geographical proximity, but Saica remains open to acquisition opportunities in other markets.
Saica is already in the middle of a major expansion program.
The acquisition of Sapso-Giepac will secure an outlet for some of the company's new testliner and fluting production. Saica rebuilt two PMs in 1997. The next stage of the investment plan is a new waste-based corrugating materials machine, PM 9. The new PM will have a design capacity of 350,000 tons/yr, but will initially run at 250,000 tons/yr. Startup is scheduled for September 2000.
Saica has a total capacity of 770,000 tons/yr of testliner and fluting, which will exceed one million tons/yr after the startup of PM 9.
Sapso-Giepac is a French holding company which owns a 60,000 ton/yr waste-based corrugating materials mill, six integrated corrugating plants, 16 boxboard sheet plants, one moulded cellulose plant and one polystyrene plant.
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| THAILAND |
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Enso advances into Thailand
Enso is to buy a 19.9% stake in Thai company Advance Agro at a cost of FIM 440 million ($80 million). The move gives Enso a firm footing in a region known for its high growth potential and low-cost production.
The two companies signed a memorandum of understanding, which has also been approved by Stora Enso management. Enso intends to acquire its minority holding by subscribing to 100.6 million new shares in Advance Agro.
The final agreement is subject to a deal between Enso and several Thai banks, as well as board approval from both companies.
The Finnish group will supply Advance Agro with long fiber pulp and the two companies will cooperate in research and development. Enso will also be the exclusive sales and marketing agent for Advance Agro pulp and paper worldwide, excluding Thailand.
Advance Agro's main production unit is an integrated mill in ThaToom in Prachinburi province, 120 km northeast of Bangkok. The mill has two pulp lines, two paper machines, an off-machine coater and a sheeting plant. The mill's total capacity is 450,000 tons/yr of pulp and 470,000 tons/yr of fine paper. The mill's second pulp line started up in April 1998.
Advance Agro's plans for a joint venture with the Chinese government to build a 900,000 ton/yr pulp mill in China will not change in light of Enso's acquisition.
Advance Agro was established in 1989 and is a part of the Soon Hua Seng Group of Thailand. The company was listed on the Bangkok stock exchange in 1995. Market capitalization on 26 June 1998 was approximately FIM 1,700 million and Advance Agro's estimated net sales for 1997 were FIM 1,300 million.
Enso has not ruled out making further inroads into Asia. The Finnish company said it was still in discussions with other Asian companies and was keeping its options open.
Enso is already active in Asia; it has made proposals for a 500,000 ton/yr pulp mill in West Kalimantan, Indonesia. The company is creating plantations and a decision on the pulp mill is expected in two to three years.
Stora also has interests in Asia and recently finalized a deal to buy a majority stake in the Chinese fine paper company, Suzhou Papyrus Paper.
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| IRELAND |
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Smur fit disposes CDI
The Jefferson Smurfit Group has sold its French wastepaper interest, CDI, to the Interseroh wastepaper group of Germany. The price agreed is I25 million ($36 million), to be paid in cash.
CDI is mainly involved in the collection and sale of high quality wastepaper in the French market, in particular white paper pulp substitutes. Smurfit's main wastepaper requirements are old corrugated containers (OCC) and mixed waste.
The disposal is part of Jefferson Smurfit's strategy of focusing on its core businesses of paper and paper-based packaging.
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| BELGIUM |
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Stora boosts DIP for SC
Stora is to invest SEK 82 million ($10.5 million) at its Langerbrugge mill in Belgium. The investment will raise deinking capacity from 340 tons/day to 420 tons/day as well as improving pulp quality. The work is due for completion during 1999.
The extra output will enable the mill to increase the volume of deinked pulp used in the production of supercalendered (SC) paper.
The Langerbrugge mill has two machines, a 110,000 ton/yr SC paper machine and a 116,000 ton/yr newsprint machine.
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| BOSNIA-HERZEGOVINA |
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Cel pak courts investors
Celpak, Prijedor is up for privatization - the latest in a spate of pulp and paper privatizations in eastern Europe.
Several companies had shown interest in the mill even before the government of Bosnia-Herzegovina gave the go ahead for its privatization. Celpak hopes that the program will launch into action immediately so it can attract additional investors.
Celpak has been running well below its full capacity since the end of the war in Bosnia. In the last two years the company has produced just 3,000 tons of paper and 1,500 tons of pulp due to problems with transportation, raw materials and machine parts.
The mill's capacity stands at 40,000 tons/yr of bleached sulfite pulp and 65,000 tons/yr of mainly woodfree and machine glazed paper on four PMs. There are also converting facilities for tissue products.
Celpak was due to restart production earlier this year, but the company postponed the move until September due to financing difficulties. The company hopes to inject capital into the mill when a new investor is found. The mill plans to produce 15,000 tons of pulp and 16,500 tons of paper by the end of the year.
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| CZECH REPUBLIC |
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Czechs in take over talks
The Czech pulp producer, Biocel, is gearing up for a takeover of the Czech paper producer, Jihoceske Papirny (JIP).
The Czech competition authorities have approved the takeover, clearing the way for Biocel and JIP to vote on the matter.
The takeover fits in with Biocel's strategy of targeting the tissue sector, according to the firm's chief executive officer, Ivo Klimsa. The deal will also enable the two companies to lower production costs and improve profitability, Klimsa added.
Biocel produces more than 200,000 tons/yr of bleached sulfite pulp. JIP makes 35,000 tons/yr of unbleached sulfite pulp and 100,000 tons/yr of paper, including tissue, supercalendered, packaging and specialty paper grades.
If the merger goes ahead, the new company plans to close down JIP's old pulp line and install a new medium-sized tissue PM and converting facilities.
Biocel already has a 49% stake in JIP.
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| POLAND |
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Metsä sells specialties
Metsä Tissue is to sell the specialty paper operations of Warszawskie Zaklady Papiernicze (WZP) to Konstans. The move is part of a restructuring program at WZP through which Metsä Tissue aims to become the leading tissue producer in Poland.
The sale will take place in December and is subject to approval by the appropriate authorities.
Metsä Tissue acquired WZP last year and began to focus on tissue operations this year. The mill has a 20,000 ton/yr capacity of converted tissue products.
Konstans is a subsidiary of school stationary wholesaler, Top 2000.
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| TURKEY |
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Turks triple test liner capacity
Modern Karton is injecting $89.3 million into a project for a new 200,000 ton/yr testliner machine. The Voith PM will be installed at the Corlu mill, with startup scheduled for December 1999.
The company has also ordered a stock preparation line from Andritz to feed the new machine. The system comprises a 750 ton/day old corrugated container (OCC) line and a 400 ton/day deinking line.
Some $30 million of financing for the project came from the International Finance Corporation (IFC) and $35 million from the Bank of Austria, while the remainder is equity financing.
The Corlu mill already has two testliner PMs with a total capacity of 90,000 tons/yr.
Modern Karton buys recovered paper in Turkey, but is looking for additional sources amid fears that domestic wastepaper prices could increase considerably. Romania and the Ukraine are two possible sources for the wastepaper.
Seka look s at privatization
Seka has put several investment plans on hold as there are problems with financing and the Turkish government may even decide to privatize the company.
Seka planned to raise newsprint capacity at its Balikesir mill from 100,000 tons/yr to 134,000 tons/yr and install a 45,000 ton/yr deinking plant. The total cost of the modernization was forecast as $120 million.
The company intended to raise kraftliner output at its Akdeniz mill in Mersin from 155,000 tons/yr to 200,000 tons/yr. Seka was also due to increase kraft pulp production from 140,000 tons/yr to 170,000 tons/yr and build a new 30,000 ton/yr old corrugated container (OCC) plant. The project was costed at $62 million, but the Turkish government allocated financing of just $2 million to the mill for 1998.
Seka has completed a process water treatment plant and a rebuild of the pulp screening system at its Caycuma mill in Zonguldak. In the future, the company hopes to raise kraft pulp and sack paper capacity from 75,000 tons/yr to 90,000 tons/yr. The modernization would cost $32 million. The mill has been allocated $5 million for 1998 by the government.
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| PAKISTAN |
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Pakistan's pulp plans set back on track
Faruki Pulp Mill is back on track with the pulp project at its mill in Gujrat, Pakistan.
The company is to start trial runs on the 200 ton/day totally chlorine-free eucalyptus market pulp line in mid-August. Commercial production is expected to start in October or November.
Faruki has been forced to delay the pulp mill startup several times. The company has suffered financing troubles since late 1996 due to political and economic problems in the region. But the mill has acquired machinery and funds to complete the project.
The company is also seeking a joint venture partner as its financial worries are not yet over. Faruki's chief marketing and development manager, Kashif Faruki, said that the company's position as Pakistan's first and only wood pulp mill would be very attractive to North American and Asian groups looking to increase their market share and profits.
The mill's output is to be sold mainly on the domestic market. Several companies are also interested in distributing Faruki Pulp Mill's output on the US, Japanese, Singaporean and Indian markets.
The company also planned to install a paper machine at the mill. But the project has been postponed until the mill is out of troubled waters.
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| CHINA |
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Dongguan Nine Dragons launches liner in China
Dongguan Nine Dragons Paper Industries has launched production at its greenfield linerboard mill in the Guangdong province of China. The new 200,000 ton/yr linerboard PM is running smoothly, according to the mill's main shareholder, America Chung Nam (ACN).
ACN has revealed further expansion plans to raise the total capacity of the Nine Dragons mill to 800,000 tons/yr.
The company is speeding ahead with the second phase of the investment project which involves installing a new 300,000 ton/yr PM. Construction is due to begin in the fourth quarter of 1998. A third phase will add a further PM and increase capacity by 300,000 tons/yr. Work will begin in the middle of 2000.
Overmeccanica supplied the first 200,000 ton/yr PM. The stock preparation system was provided by Black Clawson. The system includes a 500 ton/day old corrugated container (OCC) processing plant and a 150 ton/day virgin fiber kraft slushing line. ACN will handle all the raw material sourcing and marketing.
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| JAPAN |
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Hokuetsu starts up PM
The mill installed a new 400,000 ton/yr fiber line in April this year. Hokuetsu Paper started up a new continuous digester in November last year with a capacity of 400,000 tons/yr of bleached hardwood kraft pulp. The net capacity rise was only 260,000 tons/yr, though, as the old digester was closed down.
Investment totaled $375 million for the paper machine and $130 million for the fiber line.
Hokuetsu Paper already has five paper machines with a total capacity of 537,000 tons/yr. The company had one board machine with a total capacity of 49,000 tons/yr and two pulp lines with a combined capacity of 400,000 tons/yr.
Hokuetsu sells most of its output in Japan and a small amount in southeast Asia. New production will also stay mainly in the domestic market.
Marusumi invests in coated capacity at Kawanoe
coated mechanical papers is set to rise to 220 tons/day following a rebuild of the machine's wet end. The modernization is scheduled to take place this month and the PM should restart by October.
The company planned to idle the machine when its new bitokoshi PM came on stream at the Ohe mill. But Marusumi now intends to just shut down PM 2 at the Kawanoe mill in July. The PM has a capacity of 150 tons/day of coated mechanical papers.
The Ohe mill's new 150,000 ton/yr PM is in full production and the output is said to be selling well on the Japanese market. The company denied that it had held back the PM's startup due to poor market conditions. The machine started test runs in February and was ready for commercial production in May.
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| AUSTRALIA |
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Visy revives liner project
Visy Industries has revived plans to build an integrated pulp and kraftliner mill in New South Wales, Australia.
The proposed capacity is 300,000 tons/yr, a change from the original figure of 150,000 tons/yr. No startup date has been fixed, but 2001 would be the earliest possible.
The company will need to inject A$450 million ($267 million) into the project. Visy Industries will make a final decision on whether it will go ahead with the proposals by September this year.
Initially, raw materials will be a combination of tree thinnings and sawmill waste. A new 30,000 ha timber plantation will also be required.
A small amount of the pulp may be sold on the market, but the majority will be used for kraftliner production. The output will be sold in domestic and export markets, mainly in Asia.
Visy Industries has a testliner and corrugating medium capacity of 700,000 tons/yr in Australia and 600,000 tons/yr in the USA.
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| MEXICO |
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Copamex starts DIP plants
Copamex has started up a new deinking plant at Planta Uruapan in Mexico following several setbacks to the original scheme.
The 150 ton/day deinking line came on stream earlier this month. Startup was originally targeted for March, but was held back for administrative reasons.
Copamex also restarted its rebuilt 150 ton/day deinking system at the Planta Monterrey mill. The modernization work had also been delayed a number of times but the line eventually came on stream at the beginning of May.
Both plants are said to be operating very successfully, according to the supplier Voith. The combined cost of the projects was $7 million.
Estrella expands linerboard
Cartonajes Estrella is to install a new linerboard machine at a new plant in Tizayuka, Mexico.
The PM is designed to produce 700 tons/day of linerboard, tripling the company's existing capacity of 400 tons/day.
Startup is slated for February 1999. Beloit is the main supplier for the project.
The company already runs two other plants, with a total of three PMs which produce a variety of packaging grades.
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| CHILE |
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Arauco completes pulp line
Arauco has completed the rebuild of pulp line number one at its mill in Chile. The mill has switched production from softwood kraft pulp to eucalyptus pulp and is already exporting the new output to European and Asian markets.
The upgrade was originally due for completion at the end of this year. But the project was brought forward and carried out in record time.
Pulp line one's eucalyptus capacity stands at 270,000 tons/yr. But the company only intends to produce this grade until October 1998, due to a temporary shortage of eucalyptus wood supplies. In November and December, the line's output will be focused on bleached softwood kraft pulp made from pine. But Arauco intends to switch line one's output to 100% eucalyptus pulp over the next few years.
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| USA |
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Tariff initiative fails
Asia-Pacific Economic Cooperation (APEC) trade ministers have failed to reach agreement on eliminating tariffs on forest products.
The American Forest & Paper Association (AF&PA) said that Japan's refusal to cut tariffs on wood imports made the agreement impossible. It also noted that Japanese protectionism is still the greatest obstacle to liberalizing Asian markets.
APEC trade ministers are due to meet again in September and heads of state in November this year.
AF&PA officials and industry leaders recently urged US president, Bill Clinton, to hold China and Japan to a commitment made last November to eliminate tariffs in various sectors.
L-P bids farewell to Samoa soft wood kraft mill
Louisiana-Pacific (L-P) is to sell its 195,000 ton/yr, mainly softwood kraft pulp mill as a stand alone operation. The Samoa mill will continue to operate until a successful bidder is found.
L-P has already sold its Californian assets as part of its plan to focus on the building products market. L-P announced in May that it had agreed to sell the assets for a total of $615 million.
The sale excluded the Samoa pulp mill, which was originally included in the package, as the final bidders were only interested in the timberlands and sawmills.
L-P has sold two sawmills and around 75,000 acres of redwood timberlands to Simpson Investment Company. L-P has also sold three sawmills, two distribution companies and some 230,000 acres of redwood timberlands to Sansome Forest Partners.
L-P also has a 170,000 ton/yr bleached chemi-thermomechanical pulp mill in Chetwynd, British Columbia, Canada. This is also likely to be divested as the company's long-term strategy is to exit the pulp business. But L-P has no current plans to sell.
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| CANADA |
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Workers walk out at Abitibi
Some 5,000 Abitibi-Consolidated (A-C) workers have gone on strike at 11 paper mills in eastern Canada.
A-C and the Communications, Energy and Paperworkers Union of Canada (CEP) failed to resolve their differences on talks to determine the negotiating process.
CEP wants to negotiate for the 11 mills as a group, but the company insists on settling new contracts on a mill-by-mill basis.
Other issues such as wage increases, contract terms, benefits and pensions will not be addressed until the differences over the negotiating process have been resolved.
A-C has charged CEP with unfair labor practices as the company alleges it is illegal to strike over group bargaining in Ontario.
The case will be heard shortly in Toronto.
A union spokesman said strike votes would have to be taken again in Ontario if it loses the case, but this will not affect the closure of the four mills in that region.
The mills affected by the strike are Fort Frances, Fort William, Iroquois Falls and Kenora in Ontario, Beaupré, Belgo, Gaspesia, Laurentide and Wayagamack in Quebec as well as Grand Falls and Stephenville in Newfoundland. The walkout closes some 1.6 million tons of newsprint capacity indefinitely.
A-C said newsprint production would be at least 60% of normal output in spite of the strike. Seven of the company's other mills in Canada, the USA and UK are still in operation.
Alliance Forest adds new PM
Alliance Forest Products is investing C$275 million ($188 million) in a new 152,000 ton/yr paper machine at its Donnacona mill in Quebec, Canada. The PM will produce soft-nip calendered uncoated mechanical papers.
The new PM investment forms part of the company's plan to switch its output to more value-added products.
The company will idle two of the older PMs at the mill when the new machine comes on stream in 2000. PMs 1 and 2 have a combined capacity of 90,000 tons/yr. The company will also modernize PM 3 at the mill, which has a capacity of 80,000 tons/yr of printing papers. As part of the project, the mill will also upgrade its pulp facilities.
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| SOUTH AFRICA |
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Mondibuys box business
South Africa's Mondi has purchased the corrugated carton and Interpak packaging businesses of Consol. The transaction price was not disclosed.
Consol's paper packaging businesses have annual sales of around Rand 550 million ($86 million). Mondi said they will complement the company's cartonboard
and kraft divisions in South Africa.
A Mondi spokesman said that although the South African packaging industry is seeing lower demand, packaging grades are expected to continue their long-term growth trend when the economy recovers.
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| RUSSIA |
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Svetogorsk sold to IP and SCA
International Paper (IP) is to buy Tetra Laval's 90% stake in the Svetogorsk pulp and paper mill in Russia. The terms of the deal were not disclosed.
Svetogorsk's tissue operations have been spun off separately to SCA of Sweden for SEK 200 million ($25 million). All debts were cleared before the deal was struck.
SCA will have contracts with IP for electricity supply, water, waste treatment and other services.
Approval from cartel authorities is still needed, but both transactions should be completed by September.
IP and SCA acknowledged the difficulties of doing business in Russia. But both companies expect their existing knowledge of eastern Europe to help considerably.
IP already operates the Kwidzyn mill in Poland and has a sales office in Russia, while SCA imports fluff products such as diapers and feminine hygiene products into Russia.
The Svetogorsk mill is also one of the most efficient in Russia, benefiting from a recent investment program by Tetra Laval.
IP plans to make additional investments at the mill, including broadening the range of products. SCA expects to boost capacity from the existing 30,000 tons/yr of tissue to 40,000 tons/yr within two years. The Swedish group also plans to improve product quality.
The Svetogorsk mill has a capacity of 160,000 tons/yr of fine paper, 80,000 tons/yr of liquid packaging board, 30,000 tons/yr of tissue paper and 20,000 tons/yr of kraft paper. It also has a pulp capacity of 340,000 tons/yr (150,000 tons/yr of bleached hardwood kraft, 140,000 tons/yr of unbleached softwood kraft and 50,000 tons/yr of bleached softwood kraft).
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