EU IMPORTS FLOW FREELY

The European Council has agreed to modify the European Union's (EU) import regime for bananas. The decision signals the end of the long-standing banana dispute and finalizes the lifting of US sanctions on EU imports, including cartonboard and boxes for luxury goods. European folding cartons, boxes and cases of non-corrugated paper or board, as well as rolls and sheets of uncoated felt paper and board, were among the products hit by the inflated customs duties.

The US imposed increased duties on imports of certain European products worth $191.4 million on April 19, 1999, after the World Trade Organization ruled that EU tariffs on imported bananas were illegal. The US then imposed customs duties of 100% on the equivalent amount of trade from EU member states.

Other legal battles are still ongoing, though. Britain's Beamglow and Germany's CartonDruck are suing the European Parliament, the Council of European ministers and the European Commission, as they claim the bodies had the power to end the dispute much earlier. Beamglow is asking for damages in excess of £2 million ($2.8 million), while CartonDruck is demanding Euro 1 million ($0.9 million). Both companies are waiting for a court date.

BURGO BOOSTS OUTPUT

Cartiera Burgo wrapped up an overhaul of its Cellardennes pulp mill in Virton,
Belgium at the end of 2001. The company started up a new recovery boiler,
lime kiln and superconcentrator from Kvaerner as part of a project to raise elemental chlorine-free hardwood pulp capacity at the plant from 260,000 tonnes/yr to
360,000 tonnes/yr.

METSÄ-BOTNIA SPINS OFF KEMIART LINERS

Metsä-Botnia, M-real, UPM-Kymmene and Metsäliitto have signed a letter of intent to spin off Metsä-Botnia's Kemiart Liners business into an independent company. The move aims to clarify Metsä-Botnia's role as the pulp supplier for its main shareholders, M-real and UPM-Kymmene.

The firm will have the same shareholder structure as Metsä-Botnia, with UPM-Kymmene and M-real each owning 47%, and Metsäliitto holding the balance. A final agreement is due to be wrapped up early this year.

UPM-Kymmene and M-real aim to implement any decisions on Kemiart Liners' future by the end of 2004. If no other solution for the business is reached, M-real will have an option to purchase the other two companies' shares in the outfit.

UPM-KYMMENE CARRIES OUT PROJECTS

UPM-Kymmene has rebuilt one of two pulp dryers at its Pietarsaari mill in Finland. The upgrade increased the mill's pulp drying capacity from 950 tonnes/day to 1,150 tonnes/day. The company is also looking at revamping the plant's recovery boiler, which would boost capacity by 200,000 tonnes/yr.

On top of that, the mill produces 165,000 tonnes/yr of kraft paper. The Finnish giant is installing a new Metso Paper roll handling system on the plant's PM 1, which is due to come on line in April 2002.

UPM-Kymmene has also placed the first order for its TMP 3 pulp expansion project at the Rauma mill in Finland. Metso Paper will supply a new refining and reject system for the existing thermomechanical (TMP) pulp lines, TMP 1 and TMP 4. The equipment will be delivered in August 2002 and work is due to be wrapped up later this year.

The pulp project will eventually boost the mill's capacity from 1,500 tonnes/day to 1,700 tonnes/day. The TMP 3 project also paves the way for an upcoming rebuild of PM 1. UPM-Kymmene plans to boost the machine's capacity from 250,000 tonnes/yr to 300,000 tonnes/yr in 2003.

TARTAS GOES UP IN SMOKE

Tembec's pulp mill in Tartas, France, has reopened following a fire, which destroyed the mill's conveyor belt and brought production to a halt for six days. Tembec lost 3,000 tonnes of output following the accident.

The company believes the fire, which started in the digester room, may have been caused by a spark igniting sawdust. No employees were injured in the blaze. The cost of the repairs totals FF 2.5 million ($0.3 million).

GOLZERN AIMS FOR MOCHENWANGEN

Papierfabrik Golzern Holding, headed by Stephan Schröder, has signed a letter of intent to buy Myllykoski's Mochenwangen mill in Baden-Württemberg, Germany. Schröder expects to make a final decision on the acquisition at the end of the first quarter, once due diligence is completed.

The move follows Myllykoski's decision in June last year to switch the location of its new 280,000 tonne/yr newsprint PM from the Mochenwangen site to a greenfield mill in Hürth, near Cologne. Myllykoski said that the construction of the new plant is progressing on schedule and the company expects to hit its planned startup date of July this year.

The Finnish producer switched output on two of Mochenwangen's three PMs from directory and web offset paper to newsprint at the beginning of 2001. The third unit manufactures book paper. Schröder plans to revert to producing uncoated woodcontaining printing/writing grades, such as web offset paper, if the company goes ahead with its plans to acquire the mill.

PIRNA BCTMP MILL HITS STUMBLING BLOCK

Faserwerk Pirna has delayed the start of civil works for its bleached chemi-thermomechanical pulp (BCTMP) plant in Germany once again. The civil works were due to begin in the first quarter of this year, but are now penciled in to kick off in September. The brownfield mill in Pirna, Saxony, will initially have a BCTMP capacity of 425,000 tonnes/yr, which will be boosted to 630,000 tonnes/yr at a later date.

The company is still in talks with banks over funds for the project. Several firms have already been chosen to provide equipment for the mill, but Pirna plans to wrap up the remaining supply contracts once financing has been secured.

LEIPA LEAPS FORWARD WITH PM PROJECT

LEIPA Georg Leinfelder has brought Jaakko Pöyry Deutschland on board to carry out preliminary planning for a new 300,000 tonne/yr coated mechanical paper machine, PM 4, at its Schwedt mill in Germany. The consultants will also apply for approval from the Brandenburg authorities for the project, as well as for funds from the German government.

The privately-owned German firm expects to choose suppliers for the project toward the end of this year.

Construction of the new machine house is due to kick off in February or March next year. Startup is still slated for November or December 2004. The project cost will total Euro 330 million ($285 million). The scheme is eligible for government funds as the unit will be located in one of the former East German states.

KORSNÄS BUYS NIEDERMAYR PLANT

The German monopolies commission has approved Korsnäs Packaging's acquisition of Niedermayr's sole sack plant in Rosenheim, Germany. The Swedish company will buy the entire production line and inventory for an undisclosed sum. The acquisition is subject to approval by Niedermayr shareholders, but the deal was due for completion on March 1, 2002.

KÜBLER & NIETHAMMER UPGRADES PM

Papierfabrik Kübler & Niethammer has ordered a Voith Paper SpeedCoater for the sole PM at its Kriebstein mill in Germany. The aim of the Euro 3 million ($2.6 million) investment is to improve the quality of paper produced on PM 1. The unit's office paper output will be surface-treated by the new coater.

The SpeedCoater will be delivered at the end of May and is due to come on stream at the end of June. PM 1's 70,000 tonne/yr capacity will remain unchanged.

CATALAN PREPARES FOR REBUILD

Union Industrial Papelera has signed up Voith Paper to overhaul the stock preparation line at its mill in La Pobla de Claramunt, near Barcelona, in Spain's Catalonia region. The move is the first phase of a Euro 24 million ($21 million) scheme to raise output on the site's sole 170,000 tonne/yr waste-based linerboard and fluting PM.

Voith is penciled in to install new pulping and screening equipment on the line during a two-week shutdown in May 2002. The work will boost output on the stock preparation unit from 550 tonnes/day to 750 tonnes/day.

Union Industrial Papelera has tentative plans to match the increase with a hike in its PM's output from 170,000 tonnes/yr to 230,000 tonnes/yr. The Catalan firm expects to give the final green light on phase two of the expansion project in 10 months' time.

CRANE LANDS IN SWEDEN

Crane Paper has crossed the Atlantic to snap up the Tumba Bruk mill in Sweden for $15 million. The US company acquired 100% of the security paper mill, located 30 km south of Stockholm, from the Swedish government at the end of last year.

Tumba Bruk's two paper machines produce a total of 5,000 tonnes/yr of security paper that is converted into Swedish krona banknotes, the new euro notes and other products at the site's printing unit. The plant also houses the Swedish Mint, which was sold to its Nordic neighbor, the Mint of Finland, at the end of 2001.

CURTIS OWNERSHIP COMES FULL CIRCLE

A management buyout (MBO) team has pulled off an innovative takeover of Curtis Fine Papers from KPS Special Situations Fund, which acquired the papermaker from the bankrupt estate of its US parent, Crown Vantage, in March 2001. Three members of the Scotland-based producer's management provided capital as founding shareholders. The move returns the company to UK ownership for the first time since 1984.

A spokesman for the team's advisor, Ernst and Young Mergers & Acquisitions, believes the Curtis deal is the first Scottish MBO where the debt element has been funded by trade finance.

TOLARAM REMAINS TIGHT-LIPPED ON HORIZON

The Singapore-based Tolaram group may be set to sell off its stake in the Horizon pulp and paper mill in Kehra, Estonia. The group was due to reach a decision on the sale of its 82.5% stake in Horizon after January 31.

Tolaram carried out an expansion project at the facility last year, which boosted both the mill's sack kraft and integrated pulp capacity from 50,000 tonnes/yr to 62,000 tonnes/yr. The group was nursing plans to invest in the site's PM 3 this year and mulling over the possibility of installing a tissue PM at the mill in the future. But the fate of the projects will depend on Tolaram's decision.

GRIGISKES EXPANDS LOCAL EMPIRE

Grigiskes has bought a controlling stake in Lithuania's only other tissue manufacturer, Naujieji Vekiai. Grigiskes paid Litas 4 million ($1 million) for 49.9% of the 8,000 tonne/yr tissue company's shares and intends to run it as an independent subsidiary.

Grigiskes is exploring new investment opportunities in Naujieji Vekiaib, but has shelved plans to build a new 18,000 tonne/yr tissue paper machine at its mill near Vilnius until at least 2003.

BOZO TOMIC TO PRIVATIZE MILL

The Serbian government plans to privatize 70% of the Bozo Tomic pulp and paper mill in Cacak. The plant is being prepared for privatization under the government of Serbia and Agency for Privatization program. A tender for the shares is due to be issued shortly. The remaining 30% will be equally divided between the state and the plant's employees.

The 30,000 tonne/yr mill has three paper machines. PM 1 manufactures wrapping paper, while PM 3 produces printing/writing paper in a basis weight range of 50-150 g/m². Bozo Tomic plans to rebuild PM 2 to increase its tissue capacity from 12 tonnes/day to 15 tonnes/day.

SCP FOCUSES ON CORE BUSINESS

Severoslovenské celulózky a papierne Ruzomberok (SCP) has completed a long term restructuring program by turning its Solo plant into a 100% owned daughter company. The facility, which has been renamed Obaly Solo, began independent operations at the start of this year and will continue to produce one-side glazed wrapping paper and paper sacks, as well as extruded and pressed paper.

The move was the final part of a restructuring plan, which has seen 10 subsidiaries created from five SCP production plants in the past few years. SCP will retain two divisions it views as core businesses - Supragraf, which focuses on woodfree paper and Celpap, which produces bleached and unbleached kraft pulp.

PANASIA MULLS OVER CHINA EXPANSION PROJECT

PanAsia Paper is evaluating plans to install two new 200,000 tonne/yr newsprint machines at its mills in China after recently gaining approval for the scheme from the Chinese government. A final decision on the projects' fate is expected within the next four months. The company is having second thoughts on the investments due to overcapacity concerns following a rash of newsprint expansions in China. The drastic reduction of newsprint import tariffs following China's entry into the World Trade Organization (WTO) in December last year is also a concern for PanAsia.

The projects under the microscope both involve working with joint venture partners. One of the proposed new machines would be installed at Shanghai PanAsia Potential Paper's Baoshan mill in Shanghai. The other PM under consideration would be installed at the Hebei PanAsia Longteng Paper plant in Zhaoxian, Hebei province.

HINDUSTAN NEWSPRINT COMES UP FOR SALE

The Indian state-owned company, Hindustan Paper, is due to sell off a majority stake in its wholly owned subsidiary, Hindustan Newsprint, located in the Kottayam district of Kerala. The merchant banking company, SBI Capital Markets, has been retained as an adviser to Hindustan Paper for the proposed divestment and has invited expressions of interest from potential buyers.

According to SBI Capital Markets, Hindustan Paper intends to divest either 74% or 100% of the 100,000 tonne/yr Hindustan Newsprint plant to a strategic investor. Potential buyers must have a net worth of some $31 million and either three years' experience in manufacturing pulp, paper or board, or five years' manufacturing experience in another sector. Interested parties were due to submit expressions of interest by February 28, 2002.

OJI PAPER CLOSES PMS

Oji Paper has shut down two cartonboard machines at its Fuji mill as part of its scrap and build program. But the company decided to keep the 120 tonne/day white board PM 3 running at its Shin Fuji Paper plant although the unit is not operating at full capacity.

The Japanese giant pulled the plug on the 130 tonne/day PM 5 at its Fuji mill in mid-January, while the site's 320 tonne/day PM 7 was shut down in October 2001. The company put the two machines out to pasture following the startup of a new 650 tonne/day board machine at the Fuji facility near Tokyo last October.

Oji had planned to mothball Fuji Paper's PM 3, but the company has kept it running to fulfill orders received after several small white board producers in Fuji city went out of business.

KLABIN RIOCELL EMBARKS ON FINAL LEG OF PROJECT

Klabin Riocell was due to wrap up the commissioning of new machinery at the Guaíba mill in early March. The equipment is part of the company's two-pronged plan to raise the plant's capacity and convert all of its output to elemental chlorine-free (ECF) pulp.

The Brazilian producer has splashed out $136 million to expand total production from 300,000 tonnes/yr of bleached and unbleached eucalyptus pulp to 370,000 tonnes/yr of bleached pulp at the plant in the Brazilian state of Rio Grande do Sul. On top of the capacity hike, the project aims to switch the Guaíba mill's current output of 250,000 tonnes/yr of bleached pulp and 50,000 tonnes/yr of unbleached pulp to 100% ECF pulp.

ARACRUZ RUNS AHEAD OF SCHEDULE

Aracruz expects to start up the huge new 700,000 tonne/yr eucalyptus pulp line at its Espírito Santo mill ahead of schedule in April. The Brazilian outfit had penciled in July for the startup of Fiberline C. But with more than two-thirds of the plant's construction schedule under its belt by the end of 2001, Aracruz has pulled the date forward by three months.

Kvaerner Pulping and Andritz-Ahlstrom were brought on board to work on all three of the Espírito Santo plant's recovery boilers to boost capacity in line with the pulp expansion. Aracruz has marked March 12 to April 17 in its agenda to complete the remaining overhaul of recovery boiler B. The remaining parts of equipment are due to go live next month.

MERCER FAILS TO SNAP UP SKEENA MILL IN CANADA

The Canadian market pulp producer, Skeena Cellulose, has rejected a deal with Switzerland's Mercer International and plans to pursue a sales agreement with Northwest BC Timber and Pulp. Skeena was due to reach a definitive deal by February 15.

The British Columbia (BC) minister of competition, science and enterprise, Rick Thorpe, said that the forestry and environmental concessions requested by Mercer were unacceptable as they could have fettered government forest policy. It has not been revealed what these concessions were.