Pulp and Paper Canada

Industry News (February 01, 2006)

February 1, 2006  By Pulp & Paper Canada





PHILADELPHIA, PA — Results of a new study indicate that more than 80% of consumers are willing to shell out extra dollars for books printed on recycled paper. This comes as good news to publishers who have had to absorb extra costs when making the switch to recycled paper.

The study indicated that 80% of consumers who had purchased a book or a magazine in the past six months, or who currently have a magazine subscription, said they would be willing to pay more for those items if they were printed on recycled paper. According to the study, 42% would pay $1 or more per book, 4% would voluntarily fork over 75 cents more per book, 14% said they would pay 50 cents or more per book, whereas 19% confirmed they would pay 25 cents or more per book.

“While price premiums don’t always exist, higher prices for recycled and Forest Stewardship Council-certified paper is the most common hurdle that prevents publishers from producing books more ethically,” said Tyler Miller, executive director of the Green Press Initiative. “Hopefully, the results of this survey will help publishers see that moving in the right direction doesn’t have to cost them more.”



POWELL RIVER, BC — Catalyst Paper has made a hefty New Year’s Resolution. The company pledged to reduce its carbon dioxide emissions by 70% below its 1990 levels, by the year 2010, The Powell River Peak reported.

Catalyst signed a memorandum of understanding at the United Nations Conference on Climate Change, joining the World Wildlife Fund’s (WWF) Climate Savers Program. By the year 2010, WWF Climate Savers companies will conjointly reduce carbon pollution by roughly nine million tons per year, according to The Powell River Peak. This translates to the amount of pollution expelled by two million cars, or 800,000 houses every year.

Over the past two years, Catalyst cut its fossil fuel use by 36%, and has pledged to further reduce emissions by cutting back on energy consumption, by switching from fossil fuels to biomass, by making better use of its equipment and through tracking its CO2 emissions every month.



NACKAWIC, NB — The holidays came a little bit late to the town of Nackawic.

Nearly 15 months after the St. Anne-Nackawic pulp mill unexpectedly shut its doors after declaring bankruptcy, and tossing 400 people out of work, the facility reopened its doors on January 16, 2006.

Close to 275 workers returned to their jobs during the third week of the New Year. Contractors who were hired to help prepare the facility for production were added to the AV Nackawic payroll.

In November, the mill was sold and renamed AV Nackawic. It now stands as a partnership between the Aditya-Birla Group and Tembec. The province of New Brunswick kicked in $67.5 million worth of loans and guarantees for the project.



THUNDER BAY, ON — Abitibi-Consolidated has sold its privately owned timberlands near Thunder Bay, ON. North Star Forestry, a subsidiary of Wagner Forest Management, now owns the approximate 196,000 hectares of land, which it bought for $55 million. Abitibi plans to use this money to pay off some of its debt and for other ‘general corporate purposes.’

The decision to sell off the lands has provoked a condemnation from the Communications, Energy and Paperworkers’ Union, who has launched a national campaign to halt mill closures. Saying the sale should raise serious ‘alarm bells’, the union is calling on the government, Abitibi and Wagner to ensure the fibre coming from the sold lands remains within Canadian borders. “These lands may be privately held but they are still a natural resource vital to the economic well-being of the region, and, more specifically, to the continued operation of the Abitibi mill in Thunder Bay where 200 workers are employed,” said Cecil Makowski, the union’s Ontario region vice president.

“At the very least, Natural Resources Minister David Ramsay and the Federal Government should demand a commitment from Abitibi and the new owners…that this fibre will stay in Canada and create employment here,” he added.

Despite Abitibi’s effort to sell its Fort William mill along with the timberlands, U.S.-based Wagner bought only the land. The future of the facility is uncertain and the company has said it ‘remains subject to the ongoing in-depth operational review.’ However, the company has also confirmed the objective is to ‘improve the mill’s performance and cost structure, so as to ensure a long-term cost competitive operation.’



NATCHEZ, MS — Out of crisis came an opportunity for the Natchez, MS area, when Georgia-Pacific reopened its Roxie sawmill and its plywood facility at Gloster. After being closed for three years, Hurricane Katrina, and the damaged timber it left in its wake, prompted the facilities to reopen their doors.

Roughly 500 people are now working at the two locations, the Natchez Democrat has reported, as Georgia-Pacific scrambled to start harvesting some of the $1.3 billion worth of timber.

Both facilities are currently operating at full capacity, and will remain so in the New Year.

The Natchez Democrat further reported that maintenance done on the mills during the time they were idle, made quick start-ups much easier.



DUNCAN, BC — Squamish, BC, has been added to the list of areas stricken by pulp and paper mill closures and shutdowns.

From January 23rd, Western Forest Products began a gradual ceasing of operations at its pulp mill in the northern town. On March 9th, the facility will shut down completely, at which point 323 people will lose their jobs.

Reynold Hert, president and CEO of WFP, said that pulp prices have been ‘unacceptable’ for many years and have made continued operation a financial impossibility.

“We met with employees and assured them that people would be treated fairly and according to the terms of the collective agreement and statutory requirements.”

According to preliminary estimates, the mill’s closure will result in a pre-tax restructuring charge of roughly $80 million in the fourth quarter, including a non-cash charge of approximately $46 million relating to the write-down of fixed assets and supplies inventories.

The mill has an annual capacity of 275,000 tonnes of NBSK pulp.



MEADOW LAKE, SK — The Meadow Lake pulp mill in Saskatchewan has filed for bankruptcy.

Jointly owned by Millar Western Industries and the provincial government, the facility has secured creditor protection, and a window of opportunity to get its affairs in order before being forced to repay its debts.

The mill will remain in operation in the interim, however, the bankruptcy declaration doesn’t bode well. Pressures imposed by high energy prices and sinking pulp prices, compounded by a strong Canadian dollar, have made it difficult for the mill to keep its head above water. The month of November witnessed the provincial government writing down its investment in the Meadow Lake facility by $125 million. The CBC recently reported that despite a considerable $320 million investment the provincial government made in the mill over the years, that venture is now valued at zero.

This creditor protection comes as yet another blow to the Saskatchewan forestry industry. In October, Weyerhaeuser announced closures at its pulp and paper mills in Prince Albert, threatening roughly 700 jobs.



Radio frequency identification t
ags are too expensive, bar coding leaves metal staples, or plastic tags behind. Difficulties associated with current log-tracking methods have prompted researcher Glen Murphy to investigate a simpler approach.

Since 2000 Murphy has been evaluating the effectiveness of aroma tagging. The Corvallis Gazette-Times reported that Murphy is interested in establishing a ‘wood hound’, or an electronic version of the bloodhound. “Ideally, we want to track from standing tree to piece of wood on a desk,” the Gazette-Times reported him as saying. “That’s where we want to go. A smell is like a fingerprint.”

Although there remains much work to be done, Murphy has enjoyed a relative amount of success with an instrument called the Cyranose 320, a handheld device that is capable of identifying three common chemicals on wood samples from cedar, ponderosa pine and hemlock trees. The technology was able to detect single scents, but the breaking down of multifarious aromas remains a challenge.

Within the next five years, this is a challenge Murphy hopes to have overcome. “With 25 aromas in various combinations, timber trackers could uniquely tag more than 33 million logs,” he told the Gazette-Times.Source: The Corvallis Gazette-Times



reader response

OTTAWA, ON — Despite a pervasive negativity that plagued the forestry industry in 2005, those who managed to hold onto their jobs are being paid more to do them.

A report released by Statistics Canada confirmed that the forestry, logging and support industry was among the top industries that witnessed the strongest year-to-date annual increase. While the information and culture industry locked in at 5.4% with the highest increase, the forestry, logging and support industry wasn’t far behind, with a jump of 3.9%.

Reaction to this news brief, which was posted on our website, was unprecedented and the information on wages obviously touched a raw nerve. Due to considerable reader response, we decided to include some of the material from the replies we received.

One of the most emotional was from a mill where the staff salaries have been frozen, fiscal 2005 short-term incentives (15% of salary that is held back by the company and the employee has an opportunity to regain back by achieving objectives) held ransom at 50% until July 2006. Plus, next years’ short-term incentive plan will be reduced again by 50%, hence reducing wages going forward for at least the next five years.

As if this were not frustrating enough, the CEO was given a $600,000 bonus for doing such a good job in 2005, on top of his $950,000 base salary?????????? (sic).

Another questioned the source of the information about wage increases, since they believed that half that would be more realistic.

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