A new RISI study, 2013 India’s Forest Products Industry Outlook, shows that India’s wood fiber deficit is set to more than double between 2011 and 2021, placing increased emphasis on imports, Pulp and Paper International reports. The wood fiber deficit is defined as the country’s imports of logs, and the roundwood equivalent of its imports of primary forest products (e.g., lumber, wood panels and pulp). It is forecast to increase from 11.9 million m³ 2011 to 27 million m³ in 2021.

Due to regulations in India, companies are not permitted to own land in any significant amount and therefore cannot develop their own plantations. With limited opportunity for growth in domestic timber production, India’s need for imported wood fiber is expected to be sustained for several decades.

RISI does not expect India’s growth trajectory to follow China’s explosive patterns. “A basic difference is due to the differences in government structures. For example, infrastructure was a limiting factor in China, and is currently restricting trade into India, But in China, when the government wanted to build a new port, or new roads and highways to distribute the imported wood products from the port across the country, the government just outlined the project, told the people in the way to move, rolled over anyone who objected and just did it”, study author Robert Flynn, Director of International Timber at RISI, explains.

In India, Flynn adds, any development requires miles of red tape and is always a much, much slower process due to its “messy democracy”. This means growth in their demand for wood and timber to help build the new housing, infrastructure projects, etc., will also move at much slower pace. Housing construction in China has been a major driver in wood demand and government policies have ensured massive housing projects to accommodate the huge shift in population from rural to urban areas. In India, the government has done little to promote housing construction, and the urbanization process has been much slower than in China.

Flynn states that demand for wood will develop over time in India, due to scarcity of domestic resources and expected long-term economic development, but it will grow more gradually and for a longer time period, than in China.

COMPANY NEWS

China’s Anhui Shanying Delays Two New Recycled Containerboard PMs to 2014

China’s Anhui Shanying Paper Industry is postponing the startup of two big recycled containerboard PMs to late 2014 at a new mill in Maanshan city, Anhui province. The two new machines, dubbed PMs 5 & 6, were scheduled to come online this year.

According to the firm, construction work, which was originally scheduled to start in 2011, was delayed because work on a power grid going through the new site took priority. The power grid is a public infrastructure project to improve power supply to the city, and is to be completed very soon, said Anhui Shanying.

Metso Paper has been signed up to supply the two PMs. PM 5 will have a wire width of 8.6 m and a production speed of 1,100 m/min. It will make kraft-top liner and testliner grades in the basis weight range of 90-175 g/m². Its capacity will be 1,380 tonnes/day, or 490,000 tonnes/yr.

PM 6 will have a capacity of 1,540 tonnes/day, or 550,000 tonnes/yr. With a wire width of 8.6 m and a production speed of 1,500 m/min, the machine will make recycled fluting and testliner in the basis weight range of 50-110 g/m².

Ahlstrom Signs Demerger Plan for Coated Specialties Business in Brazil

Part of process through which Ahlstrom's Label and Processing business and Munksjö AB will be combined

Ahlstrom Corporation's Board of Directors recently signed a new demerger plan related to Coated Specialties, Ahlstrom's Label and Processing business in Brazil, and cancelled the previous Coated Specialties demerger plan. Under the signed demerger plan, all the assets and liabilities contained in the Ahlstrom Group, that belong to the Coated Specialties business in Brazil, will be transferred to Munksjö Oyj through a partial demerger.

The demerger is part of the process through which Ahlstrom's Label and Processing business and Munksjö AB will be combined.

The signing of the new demerger plan and cancellation of the previous one were needed since Ahlstrom and Munksjö will not be able to receive all relevant regulatory approvals before May 27, 2013, when the demerger decision made by Ahlstrom's Extraordinary General Meeting of the Shareholders expires. As announced before, Ahlstrom expects to complete the demerger of the Label and Processing business in Brazil during the second half of 2013. Ahlstrom will later this month publish a separate invitation to a new Extraordinary Shareholders' Meeting, which is required to obtain approval for the new Coated Specialties demerger plan.

The new complete Coated Specialties demerger plan is attached to this Stock Exchange Release and it contains information on the demerger consideration to Ahlstrom's shareholders, the planned time for execution of the demerger, the division of the demerging company's assets and liabilities to the recipient company and the conditions for the execution of the demerger.

Munksjö Oyj, as the recipient company in the partial demergers, will publish a prospectus concerning the shares offered in the demerger approximately one week before Ahlstrom's Extraordinary General Meeting for Shareholders.

The demerger plan, signed on September 11, 2012 related to Ahlstrom's Label and Processing business in Europe, is pending, for example, an approval by the European Commission competition authorities. This decision is expected during the coming weeks. Consequently, the execution of this demerger is expected to take place on or before May 27, 2013.

The two demergers form a step in the execution of the transaction between Ahlstrom and EQT concerning the combination of Ahlstrom's Label and Processing business and Munksjö AB that was announced on August 28, 2012.

Stora Enso to Cut Back Forshaga Unit Capacity

Stora Enso plans to reduce production capacity at its coating and laminating plant in Forshaga, Sweden, in order to adapt to the current market situation. The Helsinki-based company said that demand and order situation had changed since late 2012 when one of its major customers installed its own coating unit and that it had not been able to find any customers for the newly available capacity so far.

At the Forshaga site, Stora Enso runs two laminators with an installed capacity of 140,000 tpy and employs 97 people. Currently, Forshaga is producing a total of 115,000 tpy of barrier coated and laminated board for liquid packaging and dry foodstuffs. After the market-related capacity adjustment, however, the facility would only produce 85,000 tpy, a company spokesman said. The measure, which is still being negotiated with employee representatives, would affect up to 22 employees.

The Forshaga plant is processing board from the nearby Skoghall mill as well as from other Stora Enso sites, such as Fors, Ingerois and Imatra. According to the company, the capacity reduction in Forshaga would not have an impact on production at the Skoghall, where Stora Enso operates two board machines with a capacity of 750,000 tpy of liquid packaging board (LPB) and coated kraft back board (CKB).

Announced Contracts

Andritz has received orders to supply a high-energy recovery boiler and further environmental technologies for Mondi pulp and paper mills in Slovakia, Sweden, and the Czech Republic. For Mondi SCP, Ružomberok, Slovakia, Andritz will deliver a high-energy recovery boiler. Startup is scheduled for the end of 2014. For Mondi Dynäs, Sweden, Andritz is to supply a lime kiln and for Mondi Štětí, Czech Republic, key components for PM 5 and PM 7.

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Pöyry has been awarded an assignment by CMPC Celulose Riograndense for the expansion of the company’s Guaiba pulp mill in Rio Grande do Sul state, Brazil. The assignment consists of Engineering, Procurement and Construction Management (EPCM) services for the Balance of Plant (BOP) and involves integrating the different processes of the mill.

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Tunisie Ouate (Tunisia) and GapCon have recently signed a contract for the supply of a turnkey tissue plant. The contract covers, but is not limited to, stock preparation equipment, a complete EconSOFTTM tissue machine and winder including all auxiliaries. The new machine will produce high quality toilet paper, facial, napkin and kitchen towel with the capacity of 70

tonnes/day, which will enable Tunisie Ouate to expand its production capacity to meet the market growth in Tunisia and abroad.

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Chilean Empresas CMPC has picked Siemens for the first equipment supply contract for the new 1.3-million tonne/yr bleached eucalyptus kraft (BEK) pulp line to be built in Guaíba city, Rio Grande do Sul state, Brazil. The company will supply two vapor turbo-generators, one with capacity of 100 MW and the other 92 MW.

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Finnish chemical maker Kemira has signed a deal to divest its 39% stake in the titanium dioxide (TiO2) joint venture Sachtleben to its partner in the JV, the US firm Rockwood Holdings. The deal is valued at Euro 97.5 million ($130 million). Kemira said the move was part of its announced strategy to focus on water-intensive industries.

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Appleton Papers changes name to Appvion, reflecting the company's heritage of innovation in applying chemistry to paper and microencapsulation as a means to create value for its customers.

Appvion creates product solutions through its development and use of coating formulations, coating applications and Encapsys® microencapsulation technology. The company produces thermal, carbonless and security papers and Encapsys products. Appvion, headquartered in Appleton, Wisconsin, has manufacturing operations in Wisconsin, Ohio and Pennsylvania, employs approximately 1,700 people and is 100 percent employee-owned.

EXPANSIONS/ UPGRADES/ MERGERS

Ahlstrom Completes Euro 7 Million Investment at Stenay Plant, France

Ahlstrom has completed the earlier announced Euro 7 million ($9.2 million) investments at its Stenay plant, France. With the investment, the plant successfully expanded its product portfolio of one-side coated papers for metalized labels and flexible packaging. The grades produced at Stenay’s paper machine 3 span now from 50 to 160 g/m². These coated papers can be used for metallized beer labels and flexible packaging applications such as biscuits, sweets, coffee bags, pharmacy, pet food bag outer liners, tea envelopes, tobacco pouches, as well as bundle wraps for yoghurt pots.

“By lowering the weight of a paper used for metalized labels, flexible packaging and other graphics and industrial applications, Ahlstrom responds to the need for lighter papers to reduce the weight of packaging and labels and consequently lower their environmental footprint,” says

Daniele Borlatto, EVP, Label and Processing.

Georgia-Pacific to Acquire Buckeye Technologies

Transaction valued at approximately $1.5 billion

Buckeye Technologies Inc. (NYSE:BKI) and Georgia-Pacific LLC announced that they have reached a definitive agreement for Georgia-Pacific to acquire all of the outstanding shares of Buckeye Technologies' common stock for $37.50 per share in cash. The transaction, subject to completion, is valued at approximately $1.5 billion, including debt.

Buckeye Technologies, based in Memphis, Tenn., is a leading manufacturer and marketer of specialty fibers and nonwoven materials made from wood and cotton. The company's manufacturing assets include a specialty pulp mill at Perry, Fla.; cotton cellulose mills at Memphis, Tenn., and Lumberton, N.C.; and mills producing nonwovens at Mt. Holly, N.C., and Steinfurt, Germany. Buckeye Technologies also has global sales offices in Beijing, the United Kingdom, France, Italy and Switzerland. The company has approximately 1,200 employees worldwide.

Barclays is serving as exclusive financial advisor and Dechert LLP is serving as legal advisor to Buckeye Technologies. UBS and Blackstone are serving as financial advisors to Georgia-Pacific.

Headquartered in Atlanta, Georgia-Pacific is one of the world's leading manufacturers and marketers of building products, tissue, packaging, paper, cellulose and related chemicals. The company employs nearly 35,000 people worldwide. For more information, visit www.gp.com.

Headquartered in Memphis, Tenn., Buckeye Technologies currently operates manufacturing facilities in the United States and Germany. Its products are sold worldwide to makers of consumer and industrial goods. www.bkitech.com

Domtar to Make $20 Million in Upgrades to Hawesville Mill in Kentucky

Domtar Paper Company LLC plans to upgrade and add equipment at its Hawesville, Kentucky facility, retaining 452 jobs and investing up to $20 million in capital improvements.

Domtar Paper operates 13 mills across the world, including the Hawesville Mill, a large pulp and paper facility. The Hancock County plant makes approximately 80,000 tons of market hardwood pulp, which is used for paper production, and about 600,000 tons of printing grade paper each year.

The company plans to upgrade existing equipment and invest up to $10 million to construct a new conveyor system, which will allow Domtar to transport its product directly between the plant and the nearby Ohio River. The system is expected to lower operating expenses, reduce greenhouse gases and help retain the existing 452 jobs at the facility.

To encourage the investment in Hancock County, the Kentucky Economic Development Finance Authority preliminarily approved Domtar for tax incentives up to $290,000 through the Kentucky Reinvestment Act (KRA). KRA is designed to assist companies that need to make significant capital investment in Kentucky facilities in order to remain competitive.

Nine Dragons Paper Announced Three-Year Expansion Scheme For China And Abroad

Nine Dragons Paper Limited (ND Paper), China, will have six production lines commence production in succession over the next three years, including five production lines in China as well as an additional packaging paperboard production line with annual production capacity of 350,000 tonnes following the construction of Phase II in Vietnam base. Along with active expansion of overseas markets, such move is estimated to add more than 2 million tonnes to its production capacity by then, as the company said in a press release received by Lesprom Network.

According to Chairlady Ms Cheung Yan, given the exuberant demand in the regions where ND

Paper’s bases are located as well as the increasing growth in downstream production capacity, the supply and demand for packaging paperboard products in the market will gradually increase.

In view of favorable prospects of the market after 2015, ND Paper is making effort to build the five production lines in China and one production line of Phase II in Vietnam base. This will further strengthen its regional scale, diversifying its product portfolio in order to exploit its economies of scale in the regions.

Specifically, the Company will have six production lines commence production at home and abroad in the next three years. Within 2013, two packaging paperboard production lines with a total annual production capacity of 650,000 tonnes in Fujian Quanzhou will commence production before June.

One packaging paperboard production line with a production capacity of 300,000 tonnes in Sichuan Leshan will commence production before December.

From 2014 to 2015, a production line with a capacity of 350,000 tonnes of Phase 1 in Liaoning Shenyang base will commence production before 28 February, 2014; in the meantime, the second packaging paperboard production line in Shenyang base which was postponed previously will commence production ahead of schedule by the end of 2015, with an annual production capacity of 350,000 tonnes and a total investment of approximately RMB1.2 billion ($200 million).

With regards to the plans for overseas market expansion, Ms Cheung Yan has stated that the Vietnam base has been well-equipped to launch the construction of Phase II after many years of development. The Company plans to build a new packaging paperboard production line with a capacity of 350,000 tonnes before the end of 2016 with a total investment of approximately $180 million.

Metso Expands Its Service Center in Tianjin, China

Metso has opened an extension to its Tianjin service center that manufactures forming, dryer and filter fabrics mainly for the Chinese and Asia-Pacific market.

The Tianjin service center, located in the city of Tianjin, China, started with 45 employees in 2008 and today it employs 200 service professionals.

A new heat setting machine for fabrics manufacture and an expansion of laboratory facilities were included in the extension. In addition, Metso has consolidated all fabrics production by moving its Shanghai filter fabrics operations to the Tianjin facility.

Sappi Invests $19 Million in Cloquet, MN Paper Mill Improvements

Although there’s been much written about Sappi Fine Paper’s ongoing $170 million conversion from producing paper pulp to chemical cellulose, there hasn’t been as much fanfare about the company’s investment on the paper side of things.

Recently, Sappi Fine Paper North America announced the completion of a $19 million investment in the coated papermaking operations at the Cloquet mill, Minnesota. The announcement of the paper project’s completion came just a few days before Boise Inc. announced it will close two of four paper machines at its paper mill in International Falls by October, which will result in a loss of one-third of the jobs there.

Rick Dwyer, managing director of Sappi’s Cloquet mill, said the investment will help Cloquet remain competitive in terms of cost, service and quality, adding that the Sappi company is a worldwide leader in the coated paper market.

All paper produced at Cloquet carries both a Forest Stewardship Council and Sustainable Forestry Initiative chain of custody certification. The Cloquet mill also continues to have one of the lowest carbon footprints in the industry with more than 85 percent renewable energy.

Dwyer said paper from the Cloquet mill has been used in magazines, corporate brochures, glossy flyers and even a Lady Gaga book.

According to a news release issued by Sappi Fine Paper North America, the upgrades to the coated papermaking operations in Cloquet allow the mill to manufacture all grades and weights of paper using dry fiber rather than the slush fiber previously used and produced by the Cloquet pulp mill.

Dwyer said the conversion project has gone very smoothly and is on time, pointing out that the company also has put a lot of time and energy into training the employees.

In the meantime, the Cloquet Sappi pulp mill is nearing the end stages of the conversion from producing pulp to producing chemical cellulose.

Dwyer said the conversion essentially is complete. As of May 6, employees started working with the new machinery but they were making pulp rather than chemical cellulose.

“We’ll start up making the product we’ve been making — kraft pulp for paper — for about three weeks, then convert to chemical cellulose,” Dwyer said. “Because we know how to do that, it gives us a chance to check out the new equipment on a product we know.”

The mill manager figures the Cloquet mill will begin producing chemical cellulose after Memorial Day weekend, if things continue to go as planned.

“When we shut down the paper mill in three weeks, (we will) begin making paper with completely dried fiber,” he said. “Before we were selling 1,000 tons of paper pulp into the market and using the rest (here). Now the paper mill will purchase paper pulp.”

The process of making chemical cellulose is similar to making kraft paper pulp, so the renovated machines in Cloquet actually are capable of making either. However, paper is a shrinking market while the chemical cellulose market is growing, so it made sense to make the switch, Dwyer said. Plus the price per ton of chemical cellulose is higher.

“(It’s) the same raw material, but you take a few more things out of it to get to pure chemical cellulose,” he said, noting that the mill will use the same fiber source from Minnesota to make the new product.

The mill already has buyers for its chemical cellulose. So far, all of them are in the Far East, Dwyer said, noting that the bales of product would be shipped there via rail and boat.

Sappi has three mills in North America: the one in Cloquet plus two in Maine. They chose to invest in converting the Cloquet mill because of the design and modernity of the pulp mill.

“We have batch digesters,” Dwyer said. “They convert very well to chemical cellulose.”

Sappi Global already is the world’s leading manufacturer of chemical cellulose, he added.

McIlvaine Company

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Tel: 847-784-0012 Fax: 847-784-0061

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