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| BELGIUM |
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Stora Enso invests in Belgian mill
Stora Enso Magazine Paper is investing an undisclosed sum on PMs 2 and 3 at its mill in Langerbrugge, Belgium. The company has chosen Voith Sulzer to rebuild standard newsprint PM 3. The machine's output is set to rise from 130,000 tons/yr to 150,000 tons/yr as a result of the investment.
Voith Sulzer's contract covers a rebuild of PM 3's approach flow system, as well as work on the wire, press and drying sections. The order also includes an upgrade of the PM's forming equipment.
The rebuild of Langerbrugge's PM 2 is aimed at improving the quality of the mill's supercalendered (SC) paper output. Stora Enso has penciled in PM 2's rebuild for April and Voith Sulzer is scheduled to work on PM 3 in May.
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| FINLAND |
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UPM-K boosts MWC paper
UPM-Kymmene is set to invest Euro 60 million ($59 million) on a rebuild of PM 1 at its Kaukas mill in Lappeenranta, Finland. Due to a bottleneck in the coating section, half of the machine's output has been limited to medium weight coated (MWC) papers, while the remaining 50% has focused on lightweight coated (LWC) paper production. Following the modernization, PM 1 will concentrate on producing double-coated medium weight papers. PM 1 has a capacity of 250,000-300,000 tons/yr, depending on which grade is produced. The capacity could rise by as much as 50,000 tons/yr following the rebuild.
Voith Sulzer is supplying a new pre-coating unit for the project. The investment is due to be carried out in January 2001.
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| FRANCE |
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Sofidel bounces back
Sofidel has restarted the tissue machine at its Delipapier mill in Frouard, France. The company started up the new Valmet PM at the beginning of December last year, but violent storms put a stop to production a few weeks later.
High winds caused a crane to fall on top of the new mill, destroying the dryer hood, yankee dryer and reels. Delipapier was able to restart the mill quickly by repairing the dryer hood and avoiding a long wait for a replacement.
The machine has the capacity to produce 210 tons/day of tissue, which is converted into toilet tissue and kitchen roll.
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| GERMANY |
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Lang invests backward on PM 5
Gebrüder Lang Papierfabrik has started to install a deinking plant (DIP) to feed the new PM 5 at its Ettringen mill in Germany. The German producer started production on the 280,000 ton/yr newsprint and supercalendered paper machine during the fourth quarter of 1999. But since startup, the machine has been using PM 3's raw material line.
Claus Palm, manager of the Ettringen site, explained that once the new DIP plant starts up in October, Lang will restart the mothballed PM 3. The main supplier for the DM 90 million ($46 million) project is Voith Sulzer. The company will provide flotation cells and fine screening equipment. Lamort will take care of the pre-screening equipment.
FMW is to deliver a turnkey Euro 5.4 million ($5.4 million) wastepaper storage feeding system and pulper feeding plant as part of the project. The feeding plant will supply three pulpers at the site.
Wepa adds more pulp
Wepa is set to more than double the output of deinked (DIP) market pulp at its Giershagen mill in Germany. Wepa is extending its stock preparation facilities at the site and the company expects to start up the new equipment this month.
The capacity increase is the second leg of a project which kicked off at the mill at the end of 1998. The first phase of the modernization focused on improving pulp quality and was completed at the end of the first quarter of 1999.
The second phase of the project aims to raise the mill's deinked market pulp capacity from 30,000 tons/yr to 70,000 tons/yr. Wepa mainly sells its pulp output to woodfree and fine paper producers. As part of the project, Voith Sulzer supplied a new pulper, screening systems, two additional pre-flotation cells, and a fifth post-flotation cell.
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| PORTUGAL |
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Joint bid wins Gescartão
A combined bid from Europac and Sonae has won the battle for control of Portugal's Gescartão ahead of South Africa's Mondi group. The former parent company of Gescartão, Portucel, put a 65% stake in the Portuguese packaging group up for auction last October. The move formed the first step in the privatization of Gescartão.
Europac and Sonae paid Pta 8,160 million ($48 million) for the majority stake in the Gescartão group, which recorded a turnover of $100 million in 1998.
The partnership will each hold half of the share capital in Gescartão. Portucel plans to make an initial public offering for the remaining 35%.
Board business: Europac has also bought Portuguese corrugated producer, Do Ave, for Pta 233 million ($1.4 million) including debt. Do Ave reported a turnover of Pta 1,206 million in 1999. Europac is aiming to increase output at its newest acquisition by 10 million m‰ to 37 million m‰ in 2000.
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| SWEDEN |
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MoDo to be known as Holmen
MoDo's board of directors has voted in favor of swapping the company's name to Holmen. The company made the change to distinguish itself from Modo Paper, the fine paper alliance it formed with SCA at the end of last year.
Holmen has also strongly denied reports that it is open to offers for its stake in Modo Paper. The company's public relations director, Christer Lewell, hit back at newswire reports that the company would consider an offer for the 35% share.
According to Lewell, Holmen still plans to offer the stake to its shareholders. The company is not interested in any other alternatives for the share capital, he claims. Holmen and SCA are cutting back their 50/50 share split in Modo Paper to just 15% each.
Modo lays out new strategy
Modo Paper has outlined a business strategy for its newly formed company. The group aims to focus on coated papers and A4 cut-size, as well as improving operating efficiency by increasing product specialization.
The biggest project announced by Modo Paper is a SEK 2 billion ($230 million) grade switch project and upgrade of PM 8 at the Husum mill. The modernization will boost the machine's capacity from 185,000 tons/yr of uncoated woodfree to 300,000 tons/yr of coated paper.
Installation work on PM 8 will begin at the end of this year and the company expects to see the machine start production in April 2001.
Silverdalen stays open: The company has denied reports that it plans to close down the Silverdalen mill in southern Sweden. But Modo Paper did not discount the possibility of a future sale. Until now, the Swedish producer has transported uncoated paper from its Husum site to Silverdalen to be coated. But the company’s plans to change output on Husum's PM 8 mean that it will no longer have to transfer production to Silverdalen.
Modo Paper plans to change the output at Silverdalen to high value-added specialty coated grades such as photograph and label paper.
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| SWITZERLAND |
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Zwingen boosts newsprint
Papierfabrik Zwingen is set to increase newsprint production by 15% following a major rebuild of PM 3 at the company's mill in Switzerland. Under the scheme, PM 3's capacity will rise from 35,000 tons/yr to just over 40,000 tons/yr of newsprint in a basis weight range of 40-52 g/m‰. The company aims to crank up the speed of the 3.26 m wide machine from 620 m/min to 900 m/min.
Papierfabrik Zwingen has chosen Pama, Ahlstom, Valmet and AS of Germany to supply the essential equipment for the wet to dry end overhaul. The upgrade is due for completion by May this year.
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| UK |
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Cartoinvest starts up PM 1
Cartoinvest has kicked off production on PM 1, the first of two new tissue machines to start up at the Oakenholt mill in the UK. Overmeccanica is the supplier for both of the crescent former machines.
PM 1 has an annual capacity of 25,000 tons/yr of tissue in a basis weight range of 15-25 g/m=. PM 2 is currently under construction at the Oakenholt site. The company is carrying out work
on the building which will house the machine.
PM 2's capacity will be 50,000 tons/yr. The machine is to produce tissue in a basis weight range of 15-30 g/m=. Startup is penciled in for March/April of 2001.
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| POLAND |
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Frantschach ploughs
Frantschach Swiecie has unveiled plans to invest $44 million on an upgrade of PM 5 at its mill in Poland. The project will raise PM 5's testliner and kraftliner output from 90,000 tons/yr to 130,000 tons/yr.
The upgrade is scheduled to take six weeks and will be carried out in the first quarter of 2001. PM 5 is due to restart in April next year.
Frantschach Swiecie said that it is already considering plans for a second capacity increase at the mill, but the company is keeping the details under wraps for the moment.
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| BRAIL |
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VCP firms up pulp plans
Votorantim Celulose e Papel (VCP) is pushing forward with plans for a new bleached eucalyptus pulp line at its Jacareí mill in Brazil.
The company's board is to make its final decision on the new pulp project before the end of the second quarter. The project has doubled in size from 200,000 tons/yr to 400,000 tons/yr since the company first announced the expansion plans.
If the investment program gets the green light from the board, VCP expects to start up the pulp line in mid-2002.
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| AUSTRALIA |
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Amcor plans to float paper
Amcor has decided to spin off its paper interests to create a new company called PaperlinX, which will be listed on the Australian stock exchange. The move is designed to leave Amcor as a focused global packaging company.
PaperlinX will comprise the paper manufacturing and distribution businesses of Amcor Printing Paper Group and the company's 42% investment in Spicers Paper. The new company will have total sales of more than A$1.5 billion ($944 million).
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| CANADA |
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Smurfit takes over St Laurent
Smurfit-Stone Container is to snap up St Laurent Paperboard for $1.4 billion. The transaction price includes $625 million in cash, Smurfit-Stone common stock and the assumption of St Laurent's debt. Under the industry's latest consolidation deal, the two packaging companies expect to generate annual savings of $50 million.
The St Laurent purchase will expand Smurfit-Stone's capabilities to produce specialty containerboard grades and corrugated packaging. St Laurent's operations include four containerboard mills with a total capacity of 1.5 million tons/yr and 16 packaging plants.
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| FINLAND |
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Stora Enso consolidates in USA
Stora Enso has announced it will take over the US company, Consolidated Papers. The news comes hot on the heels of another major transatlantic merger between UPM-Kymmene and Champion. The Nordic company will pay Euro 4.9 billion ($4.8 billion) including debt for Consolidated Papers. The deal gives Stora Enso a sizeable foothold in the North American market. But contrary to reports, Stora Enso will not rocket to the number one position in the papermaking world as a result of the merger.
In capacity terms, Stora Enso will be on a par with, or even slightly behind, International Paper (IP). The Consolidated Papers deal takes Stora Enso's total paper and board capacity to 15 million tons/yr. According to IP, it also has a global capacity of 15 million tons/yr, but this does not include the company's latest acquisition, Shorewood Packaging, or Carter Holt Harvey.
Nice fit: Casting aside capacity numbers, the deal is certainly attractive in terms of the companies' portfolios. Jukka Härmälä, chief executive officer of Stora Enso, said that the move is in line with the company's strategy of seeking inroads into the North American magazine paper market. Härmälä added that the company made an extensive study of the region's paper industry before deciding that Consolidated Papers was the best match for its needs.
Consolidated Papers is one of the biggest players in the North American publication papers market, which fits in nicely with Stora Enso's existing operations. The Nordic producer claims it will achieve synergy savings of $110 million within two years as a result of the deal.
Following the linkup, Stora Enso will gain control of 13% of the coated woodfree market and 18% of the coated mechanicals market in North America. Along with the output coming from the company's Port Hawkesbury mill, the deal also gives Stora Enso 25% of North America's uncoated mechanicals market.
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| FINLAND |
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Shaniv sets out plans
Shaniv Paper Industries plans to invest in a new tissue machine for its Ofakim mill in Israel. The PM will be the mill's third tissue machine. PM 3 is to have a capacity of approximately 25,000 tons/yr. The new machine will be slightly faster than the mill's existing Valmet PM, which has a design speed of 1,600 m/min. Trim width will be 2.7 m.
According to Izhar Shiff, the company's managing director, Shaniv plans to pick a supplier for the new PM by the end of the first quarter.
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| TURKEY |
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UPM-K champions US cause
UPM-Kymmene has shot up to third place in the global production stakes following its move to merge with the US company, Champion.
The deal catapults the Finnish and US companies closer to the top of the papermaking tree, just behind International Paper and Stora Enso. The merger news was hailed as the industry's first substantial transatlantic merger until Stora Enso jumped in with the announcement that it is buying Consolidated Papers.
The merging businesses estimate that they will have a joint production capacity of 12.1 million tons/yr and total revenues of Euro 13 billion. The new company, Champion International, will be valued at Euro 20.5 billion ($20.2 billion), including Euro 15.5 billion in equity and Euro 5 billion in net debt.
Under the terms of the merger agreement, UPM-Kymmene will exchange 1.99 of its ordinary shares for each outstanding share of Champion's common stock. The transaction values Champion's total equity at Euro 6.6 billion.
Merger issues: As part of the merger plan, UPM-Kymmene aims to list Champion International on the Helsinki stock exchange in Finland. The companies anticipate that they will achieve synergies of Euro 330 million/yr by 2002. The savings will most likely be made by combining processes to lower operating costs. Other reductions are penciled in for the logistics and purchasing departments and through the increased use of internal pulp.
Completion of the deal is dependent on the approval of both companies' shareholders, as well as regulatory conditions. The merger is due to be signed and sealed by the end of June 2000.
Following the deal, the new company, Champion International, will own production plants in 17 countries, as well as sales and distribution facilities on five continents. Champion International will be headquartered in Helskinki, Finland.
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| PORTUGAL |
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Portucel picks up Papéis Inapa
Portucel has finally snapped up Papéis Inapa in Portugal. Under the deal, Portucel Industrial is to acquire a 72.5% stake in Papéis Inapa from Inapa. The company paid Euro 90 million ($88 million) for 10,150,000 Papéis Inapa shares.
The merger allows the bleached eucalyptus kraft pulp (BKP) producer to achieve vertical integration into paper production. Jorge Armindo Teixeira, chairman and chief executive officer of Portucel Industrial commented that, "The acquisition of Papéis Inapa offers a logical opportunity to integrate downstream while providing a fundamental step in our drive to consolidate the industry."
Portucel Industrial and Papéis Inapa have neighboring mills in Setúbal outside Lisbon. The two units already share a pulp line that delivers slush pulp directly to Papéis Inapa's Setúbal site. The merged companies are confident that they can achieve synergy savings of Euro 7.5 million in 2001 and Euro 1 million in 2002.
The deal gives the new owner of Papéis Inapa exclusive use of the uncoated paper producer's brands and trademarks. Portucel Industrial previously paid royalties to Papéis Inapa to use the brands so the move will bring further savings of Euro 3 million/yr.
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| NORWAY |
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Ahlstrom buys up all of Ascoli
Ahlstrom Paper has increased its stake in Italy’s Ascoli Paper from 40% to 100%. The 85,000 ton/yr Ascoli mill will operate as part of Ahlstrom Paper’s label and packaging division under the name Ahlstrom Ascoli. The Italian mill produces mainly medium weight coated (MWC) publication paper that is used in the graphic paper industry. Ascoli operates one 3.8 m wide PM as well as an off-machine blade coater. Ahlstrom Paper bought the remaining shares in Ascoli from a consortium of three Italian commercial banks - Banca Commerciale Italiana, Interbanca and Mediocredito Lombardo.
Spending spree: Ahlstrom Paper is also investing Euro 16.5 million ($16.2 million) at the Ascoli mill. Honeywell-Measurex is to supply an automation system as part of the project. The rebuild is due to be carried out in September, ready for a restart at the beginning of October.
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| KOREA |
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Södra eyes up extra pulp
Södra is in talks to snap up Norske Skog's 480,000 ton/yr pulp assets. The deal would see the Norwegian manufacturer exit the pulp production business, while boosting Södra's pulp output to 2 million tons/yr.
If the deal goes ahead, Södra will buy up the Tofte and Folla mills in Norway. Norske Skog's board still has to consider the proposal though.
The Tofte mill is situated southwest of Oslo and has a capacity of 380,000 tons/yr of bleached sulfate pulp. The site's size and design is comparable with Södra's Mörrum pulp mill, according to the Swedish producer. Folla produces up to 100,000 tons/yr of chemi-thermomechanical pulp (CTMP) and is located to the north of Trondheim.
Norske Skog is in the middle of a project to upgrade the Tofte site. The Tofte 400 scheme is aimed at improving product quality and increasing the mill's capacity to 420,000 tons/yr. The investment is valued at NOK 600 million ($73 million). One company source said that the project has been cancelled in view of the discussions with Södra. But the mill is already capable of producing up to 400,000 tons/yr with the work that has been carried out to date, he explained.
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| UK |
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AWA to spin off merchanting arm
Arjo Wiggins Appleton (AWA) is to spin off its merchanting arm, Antalis. The Anglo-French producer sees the move as a natural progression from the group's restructuring into three separate divisions in January 1999.
The company has decided that divorcing the paper manufacturing and merchanting arms will maximize shareholder value. AWA said that synergies between the divisions had been dwindling over the years.
Ownership of Antalis will go to shareholders by demerger.
AWA plans to start the process as soon as the company's shareholders give their approval. The company expects to complete the process by the end of the third quarter of 2000.
AWA also announced that Antalis has acquired two promotional products suppliers, Mostra in Spain and Röder of Germany.
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| Brazil |
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Norske Skog seals Klabin deal
Norske Skog and Klabin have reached a deal on their proposed Brazilian newsprint joint venture, Norske Skog Klabin. Under the agreement, Norske Skog Klabin will lease Klabin's existing newsprint PM 6 at the Monte Alegre site in Paraná state. The transfer will take place on 1 April this year.
The company will run the 130,000 ton/yr PM until a decision is reached on plans to build a greenfield newsprint mill in Brazil. The 50:50 joint venture group is waiting on the findings of a pre-feasibility study commissioned from Jaakko Pöyry.
Norske Skog Klabin expects to make a decision on the project in a year's time. The Brazilian newsprint market could see the startup of the new mill in three years.
If the greenfield newsprint mill gets the go-ahead, Norske Skog Klabin will return PM 6 to Klabin. The Brazilian company plans to switch production on the machine from newsprint to board.
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| CANADA |
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Abitibi and Donohue form duo
Abitibi-Consolidated (A-C) is to merge its operations with Donohue in a C$ 7.1 billion ($4.9 billion) deal. The announcement put a stop to industry rumors that a European company was looking to take over the Canadian newsprint, specialty paper, market pulp and wood products producer.
Under the deal, A-C will scoop up all of Donohue's outstanding shares in a cash and share transaction. Donohue's main owner, Quebecor, has agreed to give up its 63.12% claim on the company's voting rights and 19.54% of Donohue's stock. A-C and Donohue estimate that they will see synergy savings of C$ 250 million within a two-year period as a result of the deal.
Following completion of the deal, A-C aims to implement cutbacks that will see 515,000 tons of newsprint removed from the market in the next 18 months.
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Stock Watch International
Source: Morgan Stanley Capital Investment
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