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| Worldwide NEWS |
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Stora Enso revises plan
Stora Enso's board has approved a Euro 500 million ($428 million) investment program at the Langerbrugge mill in Ghent, Belgium. The scheme includes a previously announced new paper machine, a new biofuel power plant and a rebuild of the site's PM 3.
Stora Enso said earlier that the new unit would be a 400,000 tonne/yr newsprint and supercalendered (SC) paper swing machine. But the company has now revealed that the new unit will produce only newsprint, while the plant's PM 3 will be rebuilt to produce 165,000 tonnes/yr of SC paper.
The capacity of the new machine will be disclosed when a supplier is chosen over the next few months. The PM is due to come on line in the first half of 2003.
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Analysts doubt merger talk
Analysts believe a merger between industry giants Stora Enso and International Paper (IP) is unlikely despite media reports linking the pair. Although analysts did not completely write off the possibility of a deal, the sheer size of the companies led a number of observers to question the potential deal's chances of a green light from the competition authorities.
But if a merger takes place, the new entity would have combined sales of around $32 billion and a paper and board output of some 27 million tonnes/yr, based on PPI's Top 150 survey published in September 2001.
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M-real brings new pulp line on stream in Finland
M-real has started up its new bleached chemi-thermomechanical pulp (BCTMP) mill at Joutseno in Finland. The plant has a capacity of 210,000 tonnes/yr. Output will be used to manufacture high-quality printing paper and packaging board at M-real's mills.
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Kanzan raises capacity
Kanzan has revealed details of the final phase of a DM 60 million ($28 million) spending spree at its mill in Düren. The specialty grade producer has signed up Metso Paper to overhaul the mill's sole PM 6 in the first quarter of 2002. Once the whole project is wrapped up, PM 6's output will increase from 40,000 tonnes/yr to 60,000 tonnes/yr.
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Reno revamps cartonboard PM
Reno de Medici has kicked off a rebuild of the sole machine, PM 1, at its Villa Santa Lucia mill in Cassino, Italy. The work is aimed at switching output on the waste-based cartonboard unit from heavyweight board to a lighter grammage range of 160-290 g/m2. The machine's capacity is also set to rise from 140,000 tonnes/yr to 208,000 tonnes/yr under the scheme. The $50 million renovation is due for completion in mid-October.
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Jefferson Smurfit to shed assets
The Jefferson Smurfit group has unveiled plans to divest assets that are no longer considered to be part of its future business focus. The move aims to reduce the group's operating cost and maximize the profit potential of its existing asset base.
Dermot Smurfit, the group's joint deputy chairman and vice president of sales and marketing worldwide, said that Jefferson Smurfit will "cull endemic loss-makers" this year in a bid to achieve its targets. He declined to name the loss-makers, but admitted there are a number of them within the group.
In addition, Jefferson Smurfit is on the lookout for acquisitions. Smurfit confirmed that Asia and Latin America remain high on the group's hit list of acquisition markets. In particular, Jefferson Smurfit is keen to move into Brazil, but only if the conditions are right. Smurfit explained that assets sold recently in Brazil went for prices the group would not pay.
Jefferson Smurfit already has a foothold in Asia through the recent acquisition of a 25% stake in the Hong Kong-listed company, Leefung-Asco. The group believes that timing is key when it comes to expanding in Asia, though. Smurfit said the group would not go into China or any other eastern country "just for the sake of being there".
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Stora Enso boosts TMP
Stora Enso is forging ahead with a rebuild of one of the 10 thermomechanical pulp (TMP) lines at the Kvarnsveden mill in Sweden. Refiner line #4's capacity is set to rise from 165 air dried tonnes/day (adt/day) to 330 adt/day once the SEK 70 million ($7.0 million) revamp is wrapped up. The move will take the mill's total TMP capacity from 1,950 adt/day to 2,100 adt/day. The refiner is scheduled to start up by the end of this month at the latest.
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M-M to shut down plant
Mayr-Melnhof (M-M) of Austria has revealed plans to close the recently acquired Emil Christ cartonboard mill in Thal, eastern Switzerland. The Austrian packaging producer bought the Swiss unit in June.
Production will be stopped gradually to enable the group to transfer customer orders to other M-M mills, in particular to its Swiss facility, Karton Deisswil.
The Thal mill produces 38,000 tonnes/yr of white-lined chipboard on one PM.
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Kondopoga installs new PM
Kondopoga has finally begun construction of a new 180,000 tonne/yr newsprint machine at its mill in Kondopoga, in the Russian region of Karelia. A spokesperson for the Russian company's Germany-based trading firm, Kondopoga International Trading, said that PM 10 is due to come on stream in the middle of 2002. The unit was originally slated to begin production in 1994. The project was stalled while the company sourced funds for the scheme.
PM 10 will boost the Kondopoga mill's newsprint output to 730,000 tonnes/yr.
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Arkhangelsk renovates PM 1
Arkhangelsk Pulp and Paper plans to raise output by 40% on PM 1 at its plant in Novodvinsk, 700 km northeast of St Petersburg. PM 1 is one of two containerboard machines at the site, which produce a total of 373,000 tonnes/yr of kraftliner and fluting.
The Russian producer has signed up Voith Paper to overhaul the unit which is due to come back on stream in December.
On the fiber side, the Russian producer signed up Lenzing to raise the mill's pulp output from 690,000 tonnes/yr to 720,000 tonnes/yr by April 2002.
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Egyptian mill remains unsold
The Egyptian government has been forced to reassess its options on the privatization of the General Company for Paper Manufacturing. The government offered its 81.3% stake by tender process at the end of the first quarter of 2001. But the offer attracted just one bid that was unacceptably low. The government is now considering its options for the sale.
The spokesman said that Cairo Financial Management has taken a proactive approach and is soliciting interest in the mill from international pulp and paper companies.
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Authorities probe deaths
Investigations have been launched to determine the cause of two fatal accidents in South African pulp and paper plants.
One person was killed and two others injured in the early hours of July 31 in an accident at Sappi's Saiccor mill in Umkomaas. A digester containing hot cooking liquor and wood chips ruptured, killing the digester charge-hand.
The Sappi accident occurred just four days after a triple fatality at the Mondi Kraft pulp and linerboard mill in Northern KwaZulu Natal. A storage tank containing hot black liquor ruptured at the Mondi site and the resulting flow of high temperature liquid caused the death of the foreman, the machine operator and the fitter.
The department of labor launched investigations into the cause of the accidents.
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Usutu must cut costs
Sappi has announced that its Usutu business in Swaziland faces liquidation if the unit does not cut costs by an estimated SZL 70 million ($8.3 million) within the next three months.
The South African company said it had to lend the 200,000 tonne/yr unbleached kraft pulp plant additional financial support when the site's costs rose to a point above a normal industry level. Sappi has decided the financial aid cannot continue indefinitely and has informed Usutu stakeholders that the business needs to generate its own cash flow.
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Changde picks supplier
Hong Kong-based Changde Hengan has ordered a RMB 200 million ($24 million) crescent former tissue machine and stock preparation equipment from Andritz for its Changde mill in China's Hunan province. Startup is scheduled for late 2002.
The 32,000 tonne/yr PM 2 will have an operating speed of up to 1,800 m/min. The new 3.5 m wide machine will use virgin fiber as furnish.
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Oji prepares for growth
The Japanese giant, Oji Paper, has unveiled a Yen 150 billion ($1.2 billion) plan to add almost 1.0 million tonnes/yr of paper and board capacity in Asia, except Japan, by March 2006. The group aims to carry out the ambitious expansion scheme by building greenfield mills or through mergers and acquisitions.
The group has already raised its stake in Japan Brazil Paper and Pulp Resources Development company (JBP) to become its largest shareholder. The JBP consortium acquired the remaining 51.48% stake in Brazil's 820,000 tonne/yr bleached eucalyptus pulp producer, Celulose Nipo-Brasileira (CENIBRA) in July, taking its share in the company to 100%.
Oji has set up a special unit, Asian Research Center, to promote the expansion scheme. The project team reports directly to Oji's new president, Shoichiro Suzuki. The former engineer said in July that Oji aims to be an Asian group led from Japan and that markets in Thailand and China are top priorities. He added that Oji's investment targets also include Indonesia and Vietnam.
Oji's 1.0 million tonne/yr expansion goal includes a 500,000 tonne/yr uncoated and coated woodfree PM. The remainder of the 1.0 million tonne/yr capacity target will include 200,000 tonnes/yr of newsprint or lightweight coated paper, 150,000 tonnes/yr of board and 150,000 tonnes/yr of specialty grades used for communication papers.
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Hokuetsu invests in Japan
Hokuetsu Paper has unveiled further details of a Yen 19.2 billion ($159 million) investment program at three of its Japanese mills. The program started in April this year and is scheduled for completion by June 2002. The next stage kicks off in December and involves the upgrade of a pulp line and coated woodfree machine at the company's flagship mill in Niigata.
The Yen 1.3 billion investment aims to boost the PM's coated woodfree capacity from 240,000 tonnes/yr to 280,000-300,000 tonnes/yr. The Niigata plant's Kvaerner pulp line will also be treated to a Yen 650 million revamp during the shutdown. The investment aims to boost the line's bleached kraft pulp (BKP) capacity from 400,000 tonnes/yr to 460,000 tonnes/yr, taking the mill's total BKP capacity to 660,000 tonnes/yr.
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Shinho sells liner mill
Shinho Paper Manufacturing has sold its Chongup mill to the fellow Korean papermaker, Dongwon Paper, for Won 13 billion ($10 million). The Chongup mill's two waste-based containerboard machines have a combined capacity of 160,000 tonnes/yr. The plant is located in Korea's southern city of Chongup.
Shinho plans to use the proceeds from the sale to help repay its outstanding debts of Won 944 billion, which the company owes to Korea's First Bank and the Industrial Bank.
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Pakistan tightens security
Pakistan's Security Paper has ordered a new machine for the production of security and banknote papers. Voith Paper will supply the unit, which will be the company's second machine. The new PM will produce mainly banknote paper, while the older machine will manufacture security grades such as passport paper. The new line is scheduled to start up at the end of 2002. Security Paper is 75% owned by the state.
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Productos installs PM
Productos Familia del Ecuador is erecting a third tissue machine at its mill in Lasso, central Ecuador. The producer bought the 30 tonne/day PM from a mill in Europe. The Italian supplier, Recard, converted the fourdrinier unit to a crescent former before the machine was dispatched to Ecuador.
The second-hand PM 3 is penciled in to start up in January or February 2002. The 2.45 m wide machine will boost the Ecuadorian plant's total output to 80 tonnes/day.
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Americans merge operations
The US producers, Mead and Westvaco, have unveiled plans to merge, creating an entity with a combined value in excess of $10 billion. Mead and Westvaco produce packaging, coated and specialty papers, consumer and office products and specialty chemicals. The new company, to be called MeadWestvaco, will produce some 7.0 million tonnes/yr of paper and board. The deal is expected to close in the fourth quarter of this year.
The firms hope to achieve operating synergies of more than $325 million/yr after two years. A review of operations will take place within 12 months.
Under the terms of the transaction, Mead shareholders will receive one share of MeadWestvaco stock for each share of Mead stock, and Westvaco shareholders will receive 0.97 shares of the new stock for each Westvaco share. Mead shareholders will also receive a special payment of $1.20/share at closing.
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NSCL completes merger
Norske Skog Canada (NSCL) and Pacifica Papers wrapped up their merger at the end of August following months of court battles. Although Norske Skog holds the same number of shares in NSCL as before, its stake in the combined entity has reduced from a 50.8% majority to just 36%. The new company will operate as NorskeCanada. The new outfit could capture synergies of at least $60 million/yr.
NorskeCanada will be North America's third largest groundwood paper and pulp company with a capacity of 2.5 million tonnes/yr.
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Note: MSCI has changed its industry classification system. Numbers have been recalculated accordingly.
Source: Morgan Stanley Capital Investment |
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