Mega Mills

By Lars-Åke Lindström, Vice president, Strategic Research, Chemical Pulping, Metso Paper

BRUSSELS, Oct. 31, 2008 (Viewpoint) - The intense debate on green house gas emissions from burning fossil fuels and their impact on global warming are now rapidly influencing the business environment of the pulp and paper industry and have put it in a tight squeeze.

In the short term perspective, the industry is faced with drastically increased costs for chemicals, energy and wood raw material. The quest for sources alternative to oil and coal for energy and transportation fuel is one key reason for these changes. Old and half modern mills in North America and Western Europe have been forced to shut down as they cannot compensate for increased costs by increasing pulp prices. New mills are being built where wood costs are low, relatively speaking, and where consumption growth is the highest, i.e. South America and Asia.

The competitive advantage of building a hardwood mill in Brazil for example, in comparison with Nordic countries, is compelling when looking at the land area required to provide wood for its operation, figure 1.

Figure 1 - Relative size of land areas required to provide wood for a 1 Million ton per year pulp mill in the Nordic countries and for mills in Brazil with capacities ranging from 0.5 – 2 Million tons per year of bleached hardwood pulp

In a longer perspective the pulp and paper industry will benefit from being based on a sustainable raw material source. Technology development will make the pulp and paper industry widen its product scope, to also include products today made from oil and coal, while at the same time significantly decrease its production costs of commodity pulp products.

In an effort to cope with growing production costs bigger and bigger mills are being built. The rationale behind this is a lower investment cost per tonne of installed capacity, exemplified in figure 2.

Figure 2 - Estimate of the impact of fiberline size on investment and total production costs

The green house gas emission debate has raised the general awareness about sustainability on a worldwide basis and there is an increased awareness the environmental impact from industrial operations. The pulp and paper industry, which has had environmental concern on its agenda for a long time, is facing a new wave of efforts to further decrease environmental impact from its mills. This will eventually lead to lower consumption of specific energy and fresh water, decreasing emissions of air pollutants and dissolved organics, including chloro-organic material, discharged to receiving waters.

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