PULP MILLS UPDATE
August 2010
McIlvaine Company
TABLE OF CONTENTS
Canada Pledges $100 Million to Forest Industry Technological Innovation
Mackenzie B.C. Pulp Mill Open for Business
Canfor Announces Sale Agreement for Howe Sound Pulp and Paper
Appleton Moves Regional Distribution to Monroe, Ohio
Western Forest Products Sells Certain Properties
Georgia-Pacific Completes Acquisition of Alabama Mills
International Paper Earns Grant to Help With Upgrade
Arauco and Stora Enso Seek New Pulp Mill in Uruguay
Metso to Supply Pulp Mill to Oji Paper's Nantong Mill in China
Fibria Moving Ahead With Tres Lagoas Pulp Project
Voith Paper to Upgrade PM 1 at SCA Munksund Mill in Sweden
The Government of Canada has launched a $100-million Investments in Forest Industry Transformation (IFIT) program to help expand opportunities for Canada's forestry sector through the development of innovative projects and technologies. Stockwell Day, president of the Treasury Board, Minister for the Pacific Gateway and Minister Responsible for British Columbia, launched the program in Vancouver and made a call for proposals that could receive IFIT funding.
The purpose of the IFIT program, which was first introduced in Canada's Jobs and Growth Budget 2010, is to demonstrate and deploy new and advanced technologies in the forest sector through investments in innovative processes. Forest sector companies that have existing facilities in Canada, including those that have been recently affected by the global economic downturn, could be eligible for IFIT support.
This program is consistent with Canada's international trade obligations, including the Softwood Lumber Agreement. Any costs associated with the production or export of softwood lumber products are not eligible under the IFIT program.
Paper Excellence B.V. celebrated the official re-opening of the Mackenzie Pulp Mill in Mackenzie, B.C. on Aug. 17. More than 220 workers have been brought back to work to support the re-opening of the mill and an estimated 500 spin-off jobs will be created.
Located in the Northern Interior Rocky Mountain Trench and strategically centered in the "fibre basket" of the B.C. interior, the Mackenzie Mill operates at a total capacity of over 235,000 tonnes per year.
The Mackenzie mill was built in 1972 and was significantly modernized in 1996 with the addition of short fiber softwood digesting production capabilities. It had been shut down for two years prior to being purchased by Paper Excellence earlier this year.
Canfor Corporation, based in Vancouver, British Columbia, announced recently that Howe Sound Pulp and Paper Limited Partnership (“HSPP”) has entered into a purchase and sale agreement for the sale of all its assets to Paper Excellence B.V.
HSPP operates a pulp and paper facility at Port Mellon, BC, capable of producing 400,000 tonnes of NBSK pulp and 230,000 tonnes of mechanical paper and employs approximately 500 people. HSPP is owned by Canfor and Oji Paper Co., Ltd. of Japan.
The transaction is subject to customary closing conditions and closing is expected during the third quarter of 2010.
Appleton has announced plans to establish a 220,000 square-foot regional distribution center for its carbonless, thermal, and security products in Monroe, Ohio. Appleton will lease the facility located at 1001 Logistics Way from Industrial Developments International Inc.
Appleton expects to have the Monroe facility operational by November. The company will then close a distribution center it operates in Hebron, Kentucky, by the end of the year. The company will transfer the 10 employees who work at the Kentucky distribution center to staff the Monroe facility.
The Monroe distribution center, located approximately 20 miles south of Appleton’s paper mill in West Carrollton, Ohio, will enable the company to expand its distribution capabilities in the region. Appleton invested USD 125 million to expand the company’s thermal paper production capacity at the mill in 2008. The company’s West Carrollton mill also produces carbonless paper.
Appleton creates product solutions through its development and use of coating formulations, coating applications and encapsulation technology. The company produces carbonless papers, thermal papers, and security products. Appleton, headquartered in Appleton, Wisconsin, has manufacturing operations in Wisconsin, Ohio, and Pennsylvania; employs approximately 2000 people; and is 100% employee-owned.
Western Forest Products Inc. has completed the sale of certain non-core properties to the Capital Regional District of Victoria, British Columbia, at the purchase price of CAD 18.8 million.
The sale, which was previously announced on 17 March 2010, includes properties in the southern portion of Vancouver Island, encompassing approximately 2350 hectares within the company's Jordan River, Sooke Potholes, and Weeks Lake holdings.
The payment schedule requires CAD 9.4 million due on 12 August 2010, CAD 3.3 million on 12 August 2011, and CAD 6.1 million on 12 August 2012. The net proceeds from the sale will be used to pay down the company's debt in accordance with its lending agreements. As a condition of sale on two parcels valued at CAD 4.5 million, the company must secure a certificate of compliance on an environmental remediation project under way. The company has until 12 August 2012 to secure that certificate.
Western is an integrated Canadian forest products company and the largest coastal British Columbia woodland operator and lumber producer. The company has an annual available harvest of approximately 7.4 million cubic meters of timber, of which approximately 7.1 million cubic meters is from Crown lands, and lumber capacity in excess of 1.5 billion board feet from eight sawmills and four remanufacturing plants. Principal activities conducted by the company include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, and value-added remanufacturing. Substantially all of Western's operations, employees and corporate facilities are located in the coastal region of British Columbia; its products are sold in more than 25 countries worldwide.
Georgia-Pacific recently announced that it has completed the acquisition of the Alabama River and Alabama Pine pulp mills in Perdue Hill, Alabama, from Parsons & Whittemore. The purchase also includes Alabama River Woodlands, the tall oil plant, the biodiesel plant, the chip mills at Elba and Jackson's Gap, Alabama, and a pulpwood yard at Demopolis, Alabama. Terms of the deal were not disclosed.
GP Cellulose will operate the pulp facilities as a single Alabama River cellulose mill, continuing to run both production lines manufacturing hardwood and softwood pulps. As announced earlier, a fluff conversion project currently under way will continue.
GP Cellulose is a non-integrated supplier of market and fluff pulp to global markets, with state-of-the-art pulp mills in Brunswick, Georgia, and New Augusta (Leaf River), Mississippi. Business offices are located in Atlanta, Georgia, USA; Zug, Switzerland; Montevideo, Uruguay; and Hong Kong and Shanghai, China. GP Cellulose's Brunswick and Leaf River mills produce an array of pulp grades, which are delivered to every region of the world for a wide variety of end uses and converting technologies.
International Paper Co. mill in Henderson, KY will receive $400,000 in federal stimulus funding for an energy efficiency upgrade.
IP secured the grant through a competitive process adminstered by the Kentucky Cabinet for Economic Development. The funding will pay for 40 to 60 percent of the total cost of such projects.
A company official told the city commission that the projects would sharply reduce the amount of water used by the corrugated paper recycling mill and result in overall savings of some $900,000 per year.
Chilean wood pulp producer Celulosa Arauco y Constitucion SA seeks to continue its regional expansion as it develops plans for a new pulp mill in Uruguay, Arauco's corporate director, Franco Bozzalla, said recently.
Arauco, through a joint-venture company with European pulp producer Stora Enso Oyj, is moving forward in its plan to build a pulp plant in Uruguay, Bozzalla told reporters on the sidelines of a forestry sector seminar.
Arauco, a subsidiary of fuel and forestry conglomerate Empresas Copec SA (COPEC.SN), would have access to 50% of the plant's production, while Stora Enso would have access to the rest.
“We are doing all the technical studies, working with the government, working on getting permissions, and we are going to be ready before the end of the year to present the project to the board of directors,” Bozzalla said.
The investment of around 500 million US dollars would be a major step in increasing Arauco's role as a global pulp producer. The plant would have a capacity of 1.3 million metric tons per year, and its port's location would allow immediate transportation of products to Arauco's markets in Europe and elsewhere, the executive said.
“It's a plant that is not only large, but modern, and equipped with the best technology,” Bozzalla added.
Initially, the mill's production would be largely destined for Europe, a major source of pulp demand, but export destinations could expand, given the capacity of the potential plant, he noted.
Metso will supply a greenfield kraft pulp mill to the Japanese Oji Paper Co. Ltd., to be built in Nantong City, Jiangsu Province, in the southern part of China. Start-up of the pulp mill is scheduled at the end of 2012. The value of the order will not be disclosed. A typical value of this type of a pulp mill ranges from Euro 100 to 150 million depending on the scope of the delivery, company said in a statement received by Lesprom Network.
Metso’s scope of supply covers all main process equipment for the new mill, including chip screens and storage systems, a continuous cooking system, a fiberline including TwinRoll Evolution wash presses, ozone bleaching, a wet lap machine, a recovery boiler, an evaporation system, a white liquor plant and a DNCG gas handling system. The state-of-the-art technology delivered by Metso will ensure environmentally friendly and efficient production.
The new pulp mill will produce 700,000 tonnes of bleached hardwood pulp annually and will be integrated with an existing paper machine at the Nantong mill.
Oji Paper Co. Ltd., one of the world’s largest paper producers, manufactures paper, pulp, and processed paper goods, including newsprint, carbonless paper, wrapping and packaging paper, and paperboard.
Metso is a global supplier of sustainable technology and services for mining, construction, power generation, automation, recycling and the pulp and paper industries.
Fibria has resumed studies on the procurement of forestlands that will be used to supply the raw material for company's planned new pulp production line to be constructed next to its Tres Lagoas mill (Tres Lagoas I) in Mato Grosso do Sul State, Brazil, PaperAge reported.
Fibria expects start up of the new pulp line (Tres Lagoas II) in the timeframe of 2014 - 2016, depending on market conditions.
The new pulp line is designed to have a nominal capacity of 1.5 million tons per year, with the possibility of increasing the capacity to 1.75 million tpy.
The project calls for a total investment of approximately R$5.8 billion, Fibria said. Social environmental licensing process has already begun, the company added.
A total of 150,000 hectares of planted forests will be needed, made up by 50% of own forest and the remaining 50% from third parties through leasing and partnership, Fibria said.
The total planned investment in the forest base is R$1.8 billion.
The company has a 30,000-hectare surplus of planted land from the Tres Lagoas I operation and is concluding the lease of 45,000 hectares in 2010. The remaining 75,000 hectares will be guaranteed through the purchase and lease of lands in the next years, Fibria said.
Fibria's Tres Lagoas mill, which began operation in March 2009, has a pulp production capacity of 1.3 million tpy.
The SCA Munksund Mill, Piteå, Sweden, will improve its processes and decided to upgrade the existing Pope reel and to purchase a new winder and a new roll transport system, choosing Voith Paper as supplier.
Munksund intends to optimize and automate the entire process from the Pope reel, thus improving both their customer offer and paper production capability. The 7.1 m wide PM 1 produces kraftliner and white top kraftliner in a basis weight range of 125 to 440 g/m².
Voith Paper will rebuild the old Pope reel to achieve larger roll diameters and will deliver new reel spools. Parent roll handling and parent roll/reel spool transport systems will be renewed as well.
The biggest single unit will be the VariFlex winder with flying splice for parent roll changing and a new type of start-and-end gluing. A pulper and an automatic core cutter are also included in the scope of supply. A transport system will be installed to transport the finished rolls to the existing wrapping equipment.
The VariFlex winder at the Munksund mill will have a maximum operating speed of 2,700 m/min. The SCA Group has already had a lot of positive experience with Voith winders in various mills and again decided on a Voith winder after having placed its latest order for Aschaffenburg, Germany, with Voith.
The upgrade of the PM 1 in Munksund will be completed in several stages, beginning in fall 2010. The winder will come on stream in spring 2011, and finally, in fall 2011, the existing Pope reel will be rebuilt.
McIlvaine Company
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