The coordination committee on strategic investment projects headed by Latvian Prime Minister Valdis Dombrovskis is going to evaluate the market situation and resources available in order to decide on building a pulp mill in Latvia, BNS reported. It is planned to attract foreign investments.

Several years ago the country has already planned to build a pulp mill, but the project was stopped: on January 15, 2008, the Latvian government cancelled Baltic Pulp company which was handling this project. In the autumn of 2006, the largest co-owner of Baltic Pulp, Мetsaliitto’s Metsa Botnia, has already told the government that Baltic Pulp should be cancelled, since the developed concept of the mill was not competitive. Baltic Pulp was then owned by Metsa Botnia (67%) and the state of Latvia (33%).

This project started in 2000, when Latvia concluded an agreement with Finland’s Metsaliitto and Sweden’s Sodra which later sold its share in Baltic Pulp to the Finnish company. In 2005, the site for the mill was almost chosen but environmental issues appeared.

At the time the project was cancelled, Metsaliitto was going to invest Eur 900 m in the project. This would have become the largest investment project in this country. It was planned to produce 600,000 tons of pulp employing 350 workers.

Coillte, Ireland Wood Exports Up 40 Fold

Coillte, Ireland’s largest forestry and forest products company, has reported that the domestic wood processing sector in Ireland is experiencing a boom in exports, with an almost 40 fold increase since early 2009, as a result of a strong international demand for Irish construction sawn wood products. Coillte says that construction sawn-wood exports from Irish saw mills have risen from approx 5,000 cubic metres at the start of 2009, to an annualised 200,000 cubic metres plus for 2010.

Despite the domestic downturn in the Irish construction industry, certified wood-based construction material is in high demand internationally with exports to the UK rising substantially over the past two-year period, partly as other suppliers withdrew from that market.

In Ireland, the forestry sector as a whole is responsible for the employment of about 16,000 people and it is hoped that a renewed focus on international business and exports will help to increase this number. The international demand for wood products is especially strong for Forestry Stewardship Council (FSC) certified construction material, which is what Coillte supplies from its forests.

In addition to the exports of timber by Irish saw mills, Coillte’s Panel Products division, which manufactures SmartPly Oriented Strand Board (OSB) in Waterford and Medite Medium Density Fibreboard (MDF) in Clonmel, has also seen a strong export performance in its products in 2010.

Coillte Panel Products exports approximately 90% of the Medite and SmartPly it produces in Ireland and has seen an improvement in the UK and European markets during 2010. Coillte Panel Products is seeing increased sales for their range of products and has also continued to export niche high value products to the US, Singapore and as far as Australia, to meet the specific needs of architects and specifiers for innovative panel products.

Coillte Panel Products has been expanding its range of products in 2010 and the company recently exported the first shipment of its newest product, Medite Ultralite, a wood product developed at the Medite plant in Clonmel.

Clearwater Paper completed acquisition of Cellu Tissue Holdings, Inc.

Clearwater Paper Corporation has completed its acquisition of Cellu Tissue Holdings, Inc., an Alpharetta, Georgia-based manufacturer of tissue products. Clearwater Paper now has 14 manufacturing locations in the U.S. and Canada, with a fifteenth under construction at Shelby, N.C, as the company said in a press release received by Lesprom Network.

Clearwater Paper paid $12 per share in cash for Cellu Tissue's outstanding common stock and funded the acquisition using a combination of existing cash on hand and $375 million of debt financing. The purchase price was approximately $530 million, including equity value of approximately $247 million, retired debt of approximately $267 million and assumed debt of approximately $16 million. The retired debt amount included approximately $32.5 million from Cellu Tissue’s credit facility.

Clearwater Paper manufactures quality consumer tissue, away-from-home tissue, hard roll tissue, machine glazed tissue, bleached paperboard, pulp and wood products. The company is a premier supplier of private label tissue to major retailers and wholesale distributors.

Norske Skog Signed Long-Term Contract with Statkraft

Norske Skog has signed a long-term contract with Statkraft for supply of power for the paper mill at Skogn in Mid-Norway. The contract secures the continued operations at the mill, which needed a new long term power supply contract by the beginning of 2011, as the company said in a press release.

The new contract with Statkraft secures yearly supply of 0.8 TWh of electricity per year until December 31, 2022. The agreement takes effect on January 1, 2011. In addition to Norske Skog, the agreement is negotiated in cooperation with Finnfjord AS, which will secure power supply for its smelter at Finnsnes in Northern Norway.

Norske Skog Skogn is one of the most environmentally friendly and efficient paper mills in Europe. A strong Norwegian currency and demanding market conditions throughout the industry means the mill needs access to stable and secure power supply at acceptable prices to maintain operations.

Norske Skog Skogn employs 500 people. Production started in 1966. The mill produces newsprint, with UK as the biggest single market.

European Demand for Newsprint Rose 4.1% in November

In November, European demand for newsprint rose 4.1% (34,000 tonnes) against the same period last year. Total European shipments to Europe were up 6.0% (47,000 tonnes), but exports dropped 13.6% (19,000 tonnes) year-on-year. As a result, the month of November closed with total European shipments up 3.0% (28,000 tonnes), as CEPIPRINT said in a statement.

In the SC-Magazine paper sector, European demand was 5.8% (18,000 tonnes) higher in November compared to the year earlier period. Total European shipments of the grade were up 11.1% (42,000 tonnes). The increase in total tonnage was split between domestic shipments, which were up 5.8% (18,000 tonnes) and exports, which were up 42.4% (23,000 tonnes).

Coated mechanical reels recorded a 9.3% (55,000 tonnes) increase in European demand last month. Exports were up 23.1% (23,000 tonnes) and shipments to Europe climbed 9.3% (55,000 tonnes) against November last year.

In the uncoated mechanical paper sector, European demand rose 9.9% (17,000 tonnes) in November. Total European shipments were up 6.9% (15,000 tonnes), based on the hike in domestic shipments plus a 6.6% (2,000 tonnes) drop in exports of the grade.

The Association of European Publication Paper Producers, CEPIPRINT asbl, is a legally and financially independent association based in Brussels, Belgium. It is a non-profit making organisation funded by its members, who are manufacturers of newsprint and magazine paper grades in Europe.

Tembec Tartas Installs New Turbine

Tembec Tartas will make an investment in a green energy project at its specialty dissolving pulp mill located in Tartas, France. The project, which includes a new 18 megawatt steam turbine and improvements to the existing boiler system, will cost approximately €16€. It is expected to be in operation during the second calendar quarter of 2012. Once the turbine is in full operation, the mill’s annual EBITDA is to improve by €6m. Tembec said that the Tartas turbine investment is to reposition that mill as a first quartile cost producer of specialty dissolving pulp generally, and particularly in its key grades of Cellulose Ethers and Nitrocellulose.

Södra to Invest in Textile Pulp Production

Södra’s board of directors has approved an investment to produce dissolving pulp at its Södra Cell Mörrum pulp mill. This will involve converting pulp line 1, which is currently used to produce paper pulp.

At full capacity, Södra Cell Mörrum will produce 170,000 tonnes of dissolving pulp based on hardwood. The production of dissolving pulp will gradually increase to compensate lost paper pulp volumes as a result of the development of digital media.

Södra strongly believes in the potential of the dissolving pulp market, and especially in the textile fibres segment.

“The demand for renewable, wood-based textile fibre will increase as it replaces cotton fibre and oil-based synthetic fibre,” said Gunilla Saltin, CEO of Södra Cell.

The investment at Mörrum will give Södra competitive dissolving pulp production based on hardwood. However, Södra will also continue to produce paper pulp based on birch at its mill in Mönsterås.

Work on the conversion will begin immediately with production expected to start by the end of 2011. Existing production will not be affected during the construction period.

Sodra and Angara Paper Plan New Pulp Mill in Russia

Södra Cell has been invited to participate in a feasibility study regarding a pulp mill project in Russia. Södra, the Russian bank VEB and Angara Paper have signed a Letter of Intent. Södra᾿s role in the project will be industrial partner and responsible for sales and marketing of future pulp production, as the company said in a press release.

The feasibility study concerns constructing a pulp mill with a capacity of 1.1 million ton softwood pulp per year. The project has cutting rights of 6 million cubic meter softwood per year in the Krasnojarsk area.

Sodra is the world's third largest supplier of market pulp. The company operates five pulp mills - three in Sweden and two in Norway.

Arjowiggins to Sell its Arches and Dettingen Operations to Munksjö

Arjowiggins said it planned to sell the Decor, Abrasives, Thin Papers and Fine Arts businesses of its mills located in Arches (France) and Dettingen (Germany) to the Munksjö group. The project, which remains subject to the approval of the European Competition authorities, would be finalised in the first quarter of 2011. The enterprise value of the Arches and Dettingen businesses was placed at €95m.

AMERICAS

Gap Diminishes Between East and West Coast Fibre Costs

In the fourth quarter of 2010, the wood chip cost discrepancy between pulp mills in Western and Eastern Canada was the lowest it has been in 10 years, reports the North American Wood Fiber Review.

Over the past 20 years, pulp mills in Eastern Canada have consistently had higher wood fiber costs than the mills in the Western provinces with the exception of a short period in 1995, the Review notes. In the 4Q/10, softwood chip prices had fallen in Quebec and Ontario and increased in British Columbia and Alberta, resulting in the smallest cost gap between the two regions in 10 years.

The North American Wood Fiber Review is published quarterly by Wood Resources International (WRI), a forest resource consulting firm.

For most of the past 20 years, pulpmills in Western Canada have had lower wood fiber costs than pulpmills in the Eastern provinces. One year ago, pulp manufacturers in British Columbia paid almost C$60/odmt less for softwood chips than did pulp mills in Ontario and Quebec, and five years ago the difference was almost C$100/odmt, according to WRI.

Because wood costs account for almost 50% of the production costs for Canadian pulp mills, companies in Eastern Canada have been at a competitive disadvantage to many other mills, not only in other regions of Canada, but throughout North America.

Prices have fallen lately; softwood chip prices have declined ten percent over the past 12 months and they were 25% lower in the fourth quarter of 2010 than five years ago. Prices are currently the lowest they have been in this region in more than ten years. In US dollar terms, wood costs in Eastern Canada are now lower than most countries in Europe, as reported in the Wood Resource Quarterly, also published by WRI.

The North American Wood Fibre Review explains that in the 3Q, wood chip prices in Western Canada increased again due to their formulaic tie to market pulp prices. The latest uptick resulted in prices at levels not seen since 2001. Pulp mills in the region currently have some of the highest chip prices in North America. With NBSK pulp prices now beginning their descent; softwood chip prices will follow downward in the coming quarters.

Despite a price decline in Eastern Canada and an increase of almost 40% in one year in the West, pulp mills in British Columbia continue to have lower wood fibre costs than mills in the eastern provinces of the country.

Biomass and wood chip market updates are included in the 32-page North American Wood Fiber Review. The report, established in 1982, tracks wood fiber prices in 15 key markets of the U.S. and Canada.

Government Loan of $8.8 Million Secures St. Marys Paper Restart in December

With the assistance of a loan from the provincial government and promises of an appropriate wood supply, St. Marys Paper Corp. in Sault Ste. Marie, Ont., is gearing up to restart by early December. The groundwood mill has been closed since March.

Using its forest bio-fibre supply, access and experience as the base for transition, St. Marys is planning long term bio-economy projects, including a 35 MW biomass co-generation plant and a wood pellet plant. The company also will engage in nano-technology product development partnerships and studies with the University of Toronto, and other bio-economy projects with private sector partners and the Sault Ste Marie Innovation Center.

The company will be calling back employees as soon as possible and will start up forestry operations to supply the mill immediately. Raw material supply and contracts will be finalized in November to have all necessary products and equipment in place. A meeting is being scheduled to share plans with all employees.

St. Marys Paper has traditionally marketed its product to magazine publishers and advertisers who produce inserts, flyers and catalogues. When full operations are possible, the company employs approximately 300 employees, and is directly and indirectly responsible for more than 2,000 jobs in Sault Ste. Marie and surrounding areas.

Fraser Completes the Sale of Its New Hampshire Paper Mill

Fraser Papers Inc. (together with its subsidiaries, "Fraser Papers" or the "Company") announced today that it completed the sale of its paper mill in Gorham, New Hampshire on December 16, 2010, to a subsidiary of Counsel RB Capital, LLC.

Fraser Papers remains under creditor protection pursuant to the provisions of the Companies' Creditors Arrangement Act ("CCAA"), with its stay of proceedings having been extended by the court to February 28, 2011.

Sappi Fine Paper NA Completes Capital Projects Totaling $49M at Somerset Mill

Sappi Fine Paper North America announced today that it has successfully completed capital projects totaling $49 million at its Somerset Mill in Skowhegan, Maine. The investment was comprised of a major capital project that upgraded recovery cycle equipment at the Somerset pulp mill, as well as 17 other related projects that improved manufacturing processes, all of which were completed on time with no interruptions to the mill's paper production.

Through the capital project, upgrades were made to the Somerset pulp mill's recovery boiler and evaporator system which enable the facility to process more black liquor, a renewable carbon neutral fuel that is generated as a byproduct of the pulping process. As a result, the Somerset Mill benefits from increased pulp production while improving energy efficiency and further reducing its carbon footprint. This recent investment ensures that the Somerset Mill continues to be globally competitive, reliable and environmentally sound.

The project also reflects Sappi's commitment to the sustainability of the Somerset Mill and the 800 plus jobs it provides in the community.

The Somerset Mill makes coated fine paper-Opus and Somerset web, and Flo web and sheets, which is used for premium magazines and other high-end print communications, as well as Lusterprint, which is used for packaging.

Uruguay Government Grants Montes del Plata Environmental Permit

The Finnish-Chilean joint venture between Stora Enso and Arauco, Montes del Plata, has obtained the necessary environmental permit for the installation of a new pulp mill in Punta Pereira, Uruguay. According to the Uruguayan government, the permit is valid for 48 months if construction is started within twelve months its issuance. Montes del Plata plans to invest $2bn in Punta Pereira to build a pulp mill, a biomass power plant and a port for the company’s pulp exports.

Abitibibowater Emerges From Creditor Protection

AbitibiBowater has completed its reorganization and has emerged from creditor protection on 9 December. The company has restructured itself financially and operationally in order to lower its breakeven point. New annual pulp and paper production capacities are 3.3 million t of newsprint, 2.5 million t of commercial printing papers and 1.1 million t of pulp. AbitibiBowater had been under creditor protection according to the Canadian Companies’ Creditors Arrangement Act and according to chapter 11 of the US bankruptcy code since April 2009.

Abitibibowater's Augusta Unit Buys Out Partner

AbitibiBowater Inc's (ABH.TO) Augusta Newsprint Co unit has purchased full ownership of its Georgia paper mill, buying out joint venture partner Woodbridge International Holding's 47.5 percent stake.

The transaction will see Augusta Newsprint pay Woodbridge a $90 million promissory note, plus the lesser of $15 million in cash or Augusta's pro-rata portion of the partnership's cash on the day before the transaction was announced.

Augusta Newsprint, which is a wholly owned unit of AbitibiBowater, and Woodbridge agreed to the purchase on Dec 23. The deal was disclosed in a filing to to the U.S. Securities and Exchange Commission on Thursday.

The two-machine Augusta, Georgia, mill has an annual production capacity of 419,000 tonnes of newsprint.

AbitibiBowater, which is North America's largest newsprint maker, emerged from bankruptcy protection this month following a reorganization that both reduced its debt and simplified its corporate structure.

BASF to Increase Prices for Wet End Paper Chemicals Sold in North America

Effective January 15, 2011 BASF will increase its prices of sizing chemicals, colorants, and polymers for strength, fixation, and water management, for wet end paper chemicals sold into the North American paper market. The price increases range from 5 to 15%, depending upon the product. This action is necessary to offset raw material cost increases, as the company said in a press release.

BASF’s Paper Chemicals division offers process chemicals to optimize costs and increase machine efficiency, functional chemicals to lend specific properties to paper, and finishing chemicals to improve the appearance and performance characteristics of printed paper and board.

Western Forest Products Announces Sale of Interest in Joint Venture

Western Forest Products Inc. has completed the exercise of an option to sell its interest in the joint venture established in 2009 between the company and Brookfield Properties Ltd., as the company said in a press release .

As previously announced by the company in October 2009, under the joint venture arrangements, Western Forest Products held less than 5% of the equity of the entity that holds the joint venture and had a right to sell its interest in the entity to Brookfield for its fair market value at any time on or after January 1, 2011. Brookfield is the manager of the joint venture entity, which holds certain undeveloped property acquired from the company in 2009 and also holds Carma Developers LP, a limited partnership that carries on a land development business across Western Canada. The company received $2.359 million for the sale of its interest.

Western Forest Products is an integrated Canadian forest products company and the largest coastal British Columbia woodland operator and lumber producer with an annual available harvest of approximately 7.4 million cubic metres of timber of which approximately 7.1 million cubic metres is from Crown lands and lumber capacity in excess of 1.5 billion board feet from eight sawmills and four remanufacturing plants.

ASIA

China Imports of Pulp Declined in First Ten Months of 2010

From January to October 2010, China totally imported 9,155,000 tons of paper pulp, down 21.8% year-on-year, according to statistics released by China Customs.

The total value of the imported pulp reached USD 7.09 billion, up 25.2% year-on-year.

The average import price per ton of pulp was USD774, up 60.2% year-on-year.

Source: China Customs

Phaunos Timber Fund Completed Two Timberland Acquisitions in Jiangxi, China

The Board of Phaunos Timber Fund Limited announced that the company's indirect subsidiary, Green China (Jiangxi) Forestry Co. Ltd has completed two additional timberland acquisitions in Jiangxi, China. The total consideration for both transactions is approximately $13.2million. The assets consist of pine, fir, and other species, which are grown for the sawn timber market.

Qinhai Xia, Director of Investments and Acquisitions at FourWinds Capital Management, the Company's investment manager, commented on the announcement, "We are very pleased to complete the acquisition of these two assets. With sustained strong GDP growth in China, we continue to believe thatthe fibre shortage in China will take time to reach equilibrium while timber prices continue the favourable trend."

Nine Dragons Paper to Invest $1.5 billion in Shenyang Base

Nine Dragons Paper Holdings Ltd. inked an agreement with the Shenyang government to spend $1.5 billion to build a production base in Shenyang, the capital of Liaoning Province, as China Knowledge reported.

The paper production base, which will be located in Xinmin county, will have a designed annual output capacity of 3 million tons, of which 600,000-ton capacity is expected to be achieved upon the completion of first phase project in 2013.

Nine Dragons Paper Holdings will have a group's combined output capacity of 16 million tons after the completion of whole project.

PLANT PROJECTS

Mondi Akrosil to Renovate Former Permacel Plant in Pleasant Prairie, WI

SIC Code: Pulp Mills

Estimated Value: $1~5 million

Details: Plans call for renovation and upgrade work at an existing facility for use as a new plant for Mondi Akrosil. Mondi Akrosil is a manufacturer of silicone-coated release liners for pressure-sensitive products. As of 11/24/10, company officials recently closed on the purchase of property for this project.

Contact Information: Mondi Group, Bob Pointer, Purchasing Executive

206 Garfield Avenue, Menasha, WI 54952

PH: 920-722-6404, http://www.mondigroup.com

Walter G. Anderson Plant, Newton IA

SIC Code: Setup Paperboard Boxes

Estimated Value: $14.6 million

Details: Plans call for construction and renovation work at a former Maytag plant for conversion into a new carton manufacturing plant for Walter G. Anderson. The new facility will be between 125,000 and 175,000 square feet. As of 11/19/10, this project was recently announced by company officials, who have received tax credits to help it move forward.

Contact Information: Walter G. Anderson, Inc., Mike Holmes, Purchasing Executive

4535 Willow Drive, Hamel, MN 55340

PH: 763-478-2133, Fax: 763-478-6572

http://www.wgacarton.com

McIlvaine Company

Northfield, IL 60093-2743

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

E-mail: editor@mcilvainecompany.com

Web site: www.mcilvainecompany.com