Fraser Papers Inc. will seek court approval of the transaction to sell its paper mill in Gorham, New Hampshire, USA. Approval will be sought from the Ontario Superior Court of Justice at a hearing scheduled for July 7, 2010 and from the United States Bankruptcy Court for the District of Delaware at a hearing scheduled for July 14, 2010, the company said in a statement received by Lesprom Network.

Fraser Papers and the purchaser have agreed to extend the closing date to August 31, 2010 as they continue to make positive progress toward finalizing terms of the transaction.

The paper mill in Gorham, New Hampshire currently operates three paper machines and produced 80,000 tons of uncoated freesheet papers and 37,000 tons of towel products in 2009.

Rocktenn to Open New Chip Mill in Alabama

RockTenn announced recently a $25-million investment in a new, state-of-the-art chip mill to furnish its Demopolis, Alabama solid bleached sulfate (SBS) and southern bleached softwood kraft pulp mill with wood chips and bark.

The new Saltwell Chip Mill, located adjacent to the Demopolis Airport Industrial Park, will produce 1.3 million tons per year of chips and 150,000 tons per year of bark for fuel.

Road and site preparation work has already begun, and the Saltwell mill is scheduled to open in March 2011, creating approximately 16 new jobs. The project is expected to reduce wood costs for the paperboard and pulp manufacturing facility.

Combined with the company’s nearby existing Rooster Bridge Chip Mill facility, RockTenn will become the area’s largest chip producer. With more than two million tons of total annual chipping capacity, the Saltwell and Rooster Bridge complexes will produce excess chips and bark allowing for future sales to third parties.

RockTenn has worked with leadership from the City of Demopolis, the Marengo and Demopolis Industrial Development Boards and the Marengo County Commission to develop the project and secure government incentives of approximately $2.6 million to improve highway and rail access to the Saltwell site.

The Saltwell Chip Mill, Rooster Bridge Chip Mill and Demopolis Mill are part of RockTenn’s Consumer Packaging segment, an integrated system of five coated recycled paperboard mills, an SBS mill and 22 folding carton operations.

RockTenn is one of North America’s leading manufacturers of paperboard, containerboard and consumer and corrugated packaging, with annual net sales of approximately $3 billion. The company operates locations in the United States, Canada, Mexico, Chile and Argentina.

Million-Dollar Forest Research Program Launched by Northern Pulp Nova Scotia

Northern Pulp Nova Scotia is creating a new Forest Research Program in the province. Northern Pulp's initiative and $1 million investment over five years will drive research to study the impacts of current forest management practices and help shape and improve forest management strategies in the future.

"As one of Nova Scotia's largest forest products companies, the health and sustainability of the forest ecosystem is extremely important," said Michael McLarty, timberlands manager at Northern Pulp Nova Scotia. "We believe the best way to maintain a healthy forest and ecosystem, while producing forest products to meet society's needs in a safe and economical manner, is to continually gain more knowledge and understanding of the impacts of applied forest management strategies."

The Forest Research Program will be chaired by Dr. Peter Duinker, director and professor, School for Resource and Environmental Studies and associate dean research with Dalhousie University's Faculty of Management.

Over the next several months, Dr. Duinker, along with Northern Pulp, will invite members of industry, academia and other stakeholder areas, including government, to join the Forest Research Program Advisory Committee. The next step will be a needs assessment to ensure the research conducted delivers relevant, meaningful and defensible results while maximizing resources.

Abitibibowater Completes Sale of Four Mills, in B.C., Que., N.B.

AbitibiBowater has completed the sale of three idle paper mills located in eastern Canada to a wholly owned affiliate of American Iron & Metal Company Inc. for $8.7 million and the sale of a paper mill and other assets located in British Columbia to an affiliate of Conifex Inc. for $33.9 million.

The three paper mills sold to American Iron & Metal, together with certain related assets and the property on which these paper mills are located, are located in Beaupré, Que., Donnacona, Que., and Dalhousie, N.B. As part of the sale, AIM has also agreed to acquire a fourth idle paper mill (Fort William), located in Thunder Bay, Ont. In addition, AbitibiBowater will be paid 40% of the net proceeds from any subsequent sale of paper machines from these mills.

The assets sold to Conifex, all located in Mackenzie, B.C., include a paper mill, two sawmills, including planer mills, as well as timberland operations with a forestry license providing an annual allowable cut of approximately 932,500 cubic meters.

AbitibiBowater has streamlined its asset portfolio to focus on top-performing facilities by closing or idling 3.4 million tonnes of paper capacity, moving from an overall production capacity of 10.4 million tonnes to 7 million tons since 2007. During this period, the company has also sold aggregate assets and land for total proceeds of over $980 million.

AbitibiBowater is currently under creditor protection in Canada and the U.S.

Subsidizing Sustainable Power in New Brunswick

A $22 million cash infusion for Lake Utopia Paper Mill in New Brunswick will go a long way towards helping the facility boost its production of clean energy. The funding comes as part of the Federal Green Transformation Program and will allow the mill to install a new biomass boiler that will be fuelled by wood waste from the company’s own forestry operations in the province.

The boiler is expected to churn out enough steam to meet the facility’s energy needs, thus reducing its reliance on fossil fuels for power. The installation will also scale back the mill’s greenhouse gas emissions by more than 66,000 tonnes per year and will displace the equivalent of 180,000 barrels of fossil fuel.

The $22 million investment represents a substantial chunk of the $32.9 million total the project will cost. The outstanding project costs will be covered by a $10.8 million repayable loan from the Government of New Brunswick, in addition to a half a million dollar grant from Efficiency NB.

Cascades Plans $10-million Pulping Line for OCC at East Angus

Cascades broke ground June 1 for a $10 million investment at the Cascades East Angus mill in Quebec's Eastern Townships region to build a recycled pulp unit that will enable the production of kraft-type recycled pulp.

A new building will be added to the premises to house a pulper, loading platforms and a warehouse for waste paper. This unit will be able to convert more than 200 tonnes per day of old corrugated cardboard (OCC) into recycled pulp. This integration will also enable Cascades to increase the recycled content of its kraft papers from 43% to 70%.

Despite a difficult market, Cascades continues to invest in the production of environmentally sound paper products. "The East Angus plant initiated a shift a few years ago towards products that were more respectful of the environment," explains Mario Plourde, president and chief operating officer of Cascades Specialty Products Group. The East Angus mill integrated recycled content and obtained FSC certification, as well as reduced its water and energy consumption.

The old corrugated cardboard for the new pulping line will come from the company's sorting centers. "This investment integrates perfectly with our desire to include maximum recycled fibre content in our products," states Alain Lemaire, president and CEO of Cascades. "It is an effective way of reusing local materials that would have probably ended up in a landfill site, while ensuring the longevity of the plant."

Cascades kraft papers can be used for the production of envelopes, bags, packaging or construction products.

Chile Wood Pulp Industry Shakes Off Earthquake's Devastation

Chile's wood pulp industry is on a rebound just four months after a massive 8.8-magnitude earthquake struck at the industry's center, severely damaging production facilities and halting production for nearly a month, the DowJones Newswires reported.

The majority of the country's pulp mills are located in south-central Chile, the epicenter of the massive Feb. 27 earthquake that devastated the region. That and the subsequent tsunami paralyzed the industry, shutting down all plants, damaging employees' homes and cutting electrical power.

As a result, Empresas CMPC SA, one of Chile's two main pulp producers, reported first-quarter net losses of $50 million, along with a production loss of 260,000 tons of pulp. The other main producer, Celulosa Arauco y Constitucion SA, a subsidiary of fuel and forestry conglomerate Empresas Copec SA (COPEC.SN), has yet to report the cost of damages, but a production unit responsible for 18% of its output, or 500,000 tons, still remains offline and is expected to operate again later this year.

Yet the pulp industry in Chile, one of the biggest producers of wood pulp in the world, now is nearly back to full capacity.

CMPC and Arauco have nearly all production lines back online--with the exception of one of Arauco's units--leaving CMPC operating at 100% and Arauco at 84% as of mid-June.

"It was a faster recovery than expected for sure," said Susanne Linhardt, research analyst with local investment bank Banchile Inversiones. "We assumed three months of very, very low production."

She attributed the rapid recovery to higher international pulp prices and continued demand, despite Europe's financial crisis. "The [companies] didn't experience any slowdown from demand in Europe or Asia," Linhardt said.

The Chilean pulp industry was quick to resume its role as producer of 8% of the global market's pulp, with the first plants opening less than a month after the quake.

Despite the severe damages caused by the quake, CMPC and Arauco posted higher sales in the first quarter of 2010 than in the comparative 2009 period as a result of historically high pulp prices.

Arauco saw consolidated sales of $784.9 million in the first quarter of 2010, an 18.9% increase from 2009 first-quarter sales, the company said in its quarterly report. Arauco has yet to release the cost of damages to its assets and operating sales.

CMPC, Chile's second-largest wood pulp producer, estimated a loss of $50 million from quake damage to fixed assets and inventories and a production loss of 260,000 tons of pulp. But the company saw $938 million in consolidated sales for the first quarter of 2010, a 34% increase from the 2009 first quarter. Pulp sales, compared to the fourth quarter of 2009, rose 22%.

Industry outlooks for the remainder of the year are positive. Pulp prices should remain high through 2013, with a possible slight drop later in the second half of 2010, according to Banchile's note.

EUROPE

Andritz to Rebuild the Drying Section of PM 2 at Smurfit Kappa’s Hoya Mill, Germany

The Pulp & Paper business area of international technology Group Andritz has received an order for rebuild and installation of the drying section of PM 2 at Smurfit Kappa’s Hoya mill, Germany. Start-up is scheduled for February 2011, the company said in a statement received by Lesprom Network.

The testliner and fluting machine in Hoya has a working width of 7.6 m at reel and a production speed of 1,100 m/min. Following the complete rebuild of the drying section, the drying wire tension will increase to 4.5 N/mm and the grouping will be changed. Four drying cylinders will be relocated from the after-drying section to the pre-drying section.

The first single-tier drying section’s PrimeDry ST web run will be enhanced with PrimeRun web stabilizing systems. The web run of the PrimeDry DT’s double-tier drying group will be optimized with specially positioned guiding rolls. In the second drying group, high-vacuum boxes will be installed to improve web transfer from the cylinder. Additionally, a new drying hood will be supplied.

Stora Enso Finalises Divestment of its Kotka Mills to OpenGate Capital

Stora Enso has finalised the divestment of its integrated mills at Kotka in Finland and its laminating paper operations in Malaysia to private equity firm OpenGate Capital. The total consideration including earn-out is up to Euro 24 million, the company said in a statement received by Lesprom Network.

The divestment is part of the plan to focus Stora Enso's business portfolio announced on 19 August 2009. As part of the transaction, Stora Enso is divesting its laminating paper, special coated magazine paper and sawmill businesses at Kotka.

The transaction also includes the fully-owned laminating paper subsidiary in Malaysia, and the business operations of the Tainionkoski paper machine 7, which remains in Stora Enso's ownership, but is leased to the new owner. The Kotka mill site and its buildings are included in the divestment.

Based on 2009 annual figures, the divestment is expected to reduce Stora Enso's annual sales by Euro 203 million, improve its annual operating profit by Euro 11 million and reduce its working capital by Euro 24 million. This operating profit improvement of Euro 11 million is included in the estimate of Euro 140 million to Euro 160 million profit improvement arising from the proposed closures, divestments and product swaps announced on 19 August 2009.

The divestment reduces Stora Enso's annual production capacity by 180 000 tonnes of machine-finished coated paper (MFC), 200 000 tonnes of laminating paper, 40 000 tonnes of Imprex products and 230 000 cubic metres of sawnwood.

The 570 employees affected, including 480 working at Kotka, 50 at Tainionkoski and 40 in Malaysia, are transferring to the service of the new owner. Stora Enso and OpenGate Capital made an agreement about wood supply as part of the divestment.

OpenGate Capital is an opportunistic private equity firm that acquires controlling interests in businesses with solid fundamentals that exhibit opportunities for operational improvements and growth.

Stora Enso is a global paper, packaging and wood products company producing newsprint and book paper, magazine paper, fine paper, consumer board, industrial packaging and wood products.

Ilim Group Invests $270 Million in Koryazhma Mill, Russia

The Board of Directors of OJSC Ilim Group approved an investment project involving installation of a paper machine in Koryazhma, Russia. The estimate project cost exceeds $270 million, the company said in a statement received by Lesprom Network.

The paper machine will produce cut-size papers, UFS offset and base papers for coated free sheet. An off-machine coater will also be installed.

The new paper machine will produce more than 150 thousand tons of cut size and 50 thousand tons of offset papers per year an base paper for 70,000 tons of coated freesheet papers.

Project implementation will start this year. The new paper machine is scheduled to start-up in 2012.

Ilim Group’s CEO Paul Herbert says that the key project objective is to continuously integrate pulp in manufacturing of value-added products. «The strategic decision of the Board of Directors to approve the paper mill for Koryazhma along with approval of the Bratsk investments will secure Ilim’s long-term development prospects and strengthen our positions on our key markets.

ASIA

SCA completes sale of Asian packaging business to International Paper

SCA announced that it has finalised the sale of its Asian packaging business to International Paper. In an all cash deal, International Paper paid $200 million for the Asian unit, which is primarily in China and consists of 13 corrugated box plants and two specialty packaging facilities.

International Paper has 12 corrugated box plants in Asia, mostly in China. The SCA unit has 4,500 employees that will join International Paper. IP currently has about 56,000 employees worldwide.

Vietnam's Timber Exports up Nearly 35%

Since the beginning of this year, timber exports from Vietnam have earned more than $1.5 billion, up nearly 35% over the same period last year. Current, contracts that businesses have signed are worth more than $3 billion, a year-on-year increase of $320 million, as the local source reported.

According to the Vietnam Timber and Forestry Products Association (Viforest), despite a slight increase in the cost of imported timber most businesses had stockpiled adequate supplies of raw materials at the beginning of the year so are not seriously affected.

After facing a number of difficulties over the last two years, many businesses are now entering a golden period similar to 7-8 years ago.

Viforest Vice General Secretary, Hoang Canh said that they can fulfill their yearly targets as exports to the US are expected to increase by nearly 10% compared to last year. In the meantime exports to other markets, such as Japan and the EU have also shown signs of picking up in both volume and value. The revenues of some businesses in the first half of this year are already equal to or even higher than for the whole of last year.

Sumitomo Forestry's Unit to Build $100 million Plant in Vietnam

Vina Eco Board Co., a unit of Japan's Sumitomo Forestry Ltd., will invest $100 million in building a laminated plank factory in southern Vietnam, as Dow Jones informed Lesprom Network.

The company has signed a contract to lease 20 hectares of land in the Phu An Thanh Industrial Park in Long An province to build the plant.

Construction on the plant is scheduled to start in June and it will become operational from November 2011. The factory will annually produce 250,000 cubic meters of laminated plank.

AUSTRALIA

Australia's Wood Chip Exports Fell 32% in 2009

Total wood chip exports from Australia fell 32% in 2009 to their lowest levels in 10 years. Softwood chip shipments were down by almost 26% from 2008, reaching a low of 790,000 tons last year, as reported in the Wood Resource Quarterly.

Exports of hardwood chip exports were down by 41%, to four million tons. This year, export volumes have picked up and shipping schedules for the coming months would indicate that the shipments in the 1H 2010 will be substantially higher than last year and could very well be back to almost the same levels as the average for the past five years.

During the first four months this year, conifer chip exports were up 38% as compared to 2009, with Japan and China being the only two destinations. Eucalyptus exports were 12% higher than last year with increased shipments to Japan and Taiwan, while exports to China were down substantially.

After having increased almost 300% from 2008 to 2009 when they reached an all-time-high of 670,000 tons, shipments to China have plunged 86 percent to date reaching only 23,000 tons for the period January through April 2010.

Australia hardwood chip prices delivered to Japan are now up 35% from a year ago in US dollar terms. According to data from Japan Pulp and Paper Association, Australian Eucalyptus chips are currently the costliest imported hardwood fiber to Japan, as compared just a year ago, when they were among the least costly, as reported in the Wood Resource Quarterly.

A new development in Australia is the interest in the exportation of wood pellets. One company has been taking steps to ship wood pellets to the fast expanding biomass energy market in Europe. The first shipments departed in late 2009 for an energy company in the Netherlands, and 20,000 tons has been shipped to Europe so far this year. The three-year contract, totals an estimated 300,000 tons of pellets. There are plans for continued investments in pellet production capacity in Australia, but because of high transportation costs to Europe, a source for a long-term reliable supply of low-cost fiber to manufacture pellets must be found.

McIlvaine Company

Northfield, IL 60093-2743

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

E-mail: editor@mcilvainecompany.com

Web site: www.mcilvainecompany.com