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August 1, 2013
By Pulp & Paper Canada

Molded pulp plant planning upgrades, switch to natural gasA $16.5-million upgrade is in the works for CKF Inc., an East Coast manufacturer of molded pulp and foam products. The project will include a conversion to use compressed natural gas,…

Molded pulp plant planning upgrades, switch to natural gas
A $16.5-million upgrade is in the works for CKF Inc., an East Coast manufacturer of molded pulp and foam products. The project will include a conversion to use compressed natural gas, which is expected to save the company up to $1.8 million per year.
The government of Nova Scotia is supporting CKF Inc.’s plan to purchase new machinery and upgrade equipment. The province will lend CKF up to $8.7 million for the company’s $16.5-million expansion, and provide $2.6 million in incentives, if the company completes the capital upgrades.
“New equipment and the use of compressed natural gas will allow us to be more competitive, and a cleaner, greener operation,” said Michael Green, vice-president of finance at CKF.
Green told the local newspaper, The Hants Journal, that the company plans to add a fourth moulding machine to the plant, upgrade sorting equipment and tap into the high demand healthcare sector — all while operating in an increasingly environmentally-friendly manner.
CKF Inc. is a family-owned company that manufactures Royal Chinet and other molded pulp and foam products for retail, food service, and packaging industries in the Canadian and U.S. markets.

Brookfield sells off its stake in Twin Rivers
Two New York-based private investment firms have acquired a controlling interest in Twin Rivers Paper Company, Inc. from Brookfield Asset Management Inc. Terms of the agreement with Blue Wolf Capital Partners and Atlas Holdings were not disclosed.
“We are turning our attention to building a growing, profitable business,” said Tim Lowe, newly appointed chief executive officer of Twin Rivers Paper. “We are focused on bringing new resources, operational expertise and a commitment to the future of the business.”
Twin Rivers produces specialty papers and lumber at facilities in Edmundston and Plaster Rock, New Brunswick, and Madawaska, Maine.
As part of an agreement with the new owners, the New Brunswick government may provide a repayable loan of up to $35 million with a matching loan from the majority ownership group. The New Brunswick government will convert preferred shares in Twin Rivers to common shares, representing 5% of equity of ownership in the company as well as a restructuring of an existing letter of credit.

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Digital archiving, cellulosic biofuels among disruptive technologies
A forecast of disruptive technologies in the pulp and paper supply chain has been released by Smithers Pira. The new study identifies and profiles the top 25 disruptive technologies most likely to impact the global pulp and paper supply chain over the next 10 years.
With transition tables highlighting each technology’s likely impact on the global pulp and paper supply chain, this report details how current and emerging trends will shape the industries.
Some of the top 25 disruptive technologies identified by Smithers Pira are: Internet shopping and e-commerce; news on the Internet; electronic books; innovative packaging; digital archiving; on-demand printing; tablet computing and texting; advances in computer power; green marketing and laws; cellulosic biofuels; and exporting of recovered fibres.
Ten-Year Forecast of Disruptive Technologies in the Pulp and Paper Supply Chain to 2023 is available as a hard copy, an electronic version, and a global intranet license. Smithers Pira is a global testing, consulting and information services business with expertise in the packaging, paper and print industry supply chains.

Catalyst brings new coated grade to market
Catalyst Paper has expanded its mechanical printing paper range with the addition of Ascent, a coated #3 paper. Made at the Port Alberni, B.C., mill on the only coated mechanical paper machine in Western North America, Ascent went from idea to market in the space of a few short months.
“Our product development team brought tremendous cross-disciplinary expertise to the initiative, along with the understanding that a new product had to be hands down excellent to meet the quality expectations of customers when there is so much choice in the marketplace,” said Tom Crowley, senior vice-president, sales and marketing.
Ascent is said to offer offers brightness, superior opacity and excellent printability making it suitable for magazines, catalogues, brochures and commercial and direct mail applications.

Demo plant for cellulosic ethanol receives operating funds
Woodland Biofuels Inc. is receiving a contribution of up to $800,000 from the federal government to operate a plant that will produce low-cost biofuel from waste.
“We expect to the plant to show that we can produce ethanol from waste for about half of what it costs to produce gasoline at today’s oil prices,” said Greg Nuttall, president and CEO of Woodland Biofuels.
FedDev Ontario funding for Woodland Biofuels has enabled the company to attract up to an additional $2 million in venture capital financing through the MaRS Cleantech Fund.
The process used by Woodland Biofuels involves gasification of the biomass, followed by catalyzed pressure reduction to convert the syngas to ethanol.
Woodlands’ vice-president of engineering, Doug Gray, told KPMG’s In Business magazine (Feb. 2013) that the system requires no outside chemicals or extra hydrogen to produce the ethanol.

Metso pulp, paper and power units return to Valmet roots
Metso will resurrect the Valmet name as it splits off its pulp, paper and power businesses from its mining, construction and automation units. Metso’s directors have  approved a demerger plan to divide the operations into two companies: Metso Corporation and Valmet Corporation.
The company says a demerger offers the best potential for its businesses to utilize their respective strengths in their customer industries faster and more efficiently.
Pasi Laine will be president and CEO of the new company.
Metso Corp. was created in 1999 as the result of a merger between Valmet and Rauma.

Domtar continues to expand personal care division
Domtar has acquired the largest manufacturer and supplier of store brand infant diapers in the United States, Associated Hygienic Products (AHP), for $272 million.
“The acquisition of AHP will provide meaningful market expansion opportunities and innovative product development capabilities with our existing Personal Care business, as well as synergies to the bottom line,” said John D. Williams, president and CEO of Domtar.
This is Domtar’s fourth transaction in the personal care sector in two years. Williams expects the company’s personal care division will reach more than $200 million in annualized EBITDA by 2017.

Commissioning underway for biomass co-gen at Port Hawkesbury
The biomass-fueled Nova Scotia Power co-generation plant at the Port Hawkesbury Paper mill has already produced some power and was expected to be in full production by the end of June, according to the Cape Breton Post.
Roger Burton, the utility’s senior director of projects, told the newspaper that testing is underway on the different components at the $200-million facility located at the Port Hawkesbury Paper site in Point Tupper, N.S.
The facility will burn biomass to produce steam and electricity.

Resolute turns on turbine and green power output at Thunder Bay
Resolute Forest Products Inc. officially inaugurated on May 14 a major power island producing green energy at its pulp and paper operation in Thunder Bay, Ont. The power island includes a refurbished and upgraded wood-waste boiler and a new 65-megawatt condensing turbine. Approved by Resolute in early 2011, the $65-million project took just over 21
months to complete.
“The power island is a strategic addition to Resolute’s Thunder Bay facility,” stated Richard Garneau, president and CEO. “It will reduce the mill’s energy costs as well as maximize our local woodlands, sawmill, pulp and paper, and energy operations by fully utilizing forest-based biomass to produce green electricity.”
The green power produced will be sold to the Ontario grid under a power purchase agreement between Resolute and the Ontario Power Authority.

Catalyst sells Elk Falls mill site
Catalyst Paper has sold its Elk Falls industrial site and related assets to Quicksilver Resources Canada Inc., a Calgary-based corporation with extensive natural gas holdings.
The $8.6 million sale includes a fully serviced, 400-acre industrial site and adjacent property near Campbell River. The site formerly housed the Elk Falls pulp and paper mill which began operation in 1952, was indefinitely curtailed in 2009 and closed permanently in 2010.  

FPAC and members still committed to boreal agreement
Despite animosity between some of the participants, the companies who signed the Canadian Boreal Forest Agreement (CBFA) are still committed to its principles, says David Lindsay, president and CEO of the Forest Products Association of Canada (FPAC).
In mid-May, environmental groups involved with the CBFA declared they would no longer negotiate with Resolute Forest Products regarding areas in northwest Ontario and Quebec.

Supreme Court opposes random alcohol testing in Irving case
A court case involving random alcohol testing by Irving Pulp and Paper Ltd. has been decided by the Supreme Court. The court ruled that the policy imposed by Irving at the company’s Saint John, N.B., kraft mill in 2006 was unreasonable and was properly rejected by a labour arbitration board.
Dave Coles, president of the Communications, Energy and Paperworkers Union of Canada, says the decision is a victory in the battle to protect workers’ privacy rights.
According to CEP, in 2006, Irving Pulp and Paper unilaterally adopted a policy of mandatory random alcohol testing for employees in safety sensitive positions. CEP Local 30 filed a grievance challenging the policy after a worker was chosen randomly by a computer program to take a breathalyzer test.
J.D. Irving issued the following statement: “We respect the decision issued today by the Supreme Court of Canada. We will be reviewing the decision and have no further comment at this time.
“Our focus has and continues to be the safety of our co-workers and communities where we have operations.”

Supreme Court decides on tax implications of selling a timber licence
A Supreme Court decision in late May decided a long-running tax battle between Daishowa-Marubeni International and the federal government in favor of the forest products company.
On May 23, 2013, the Supreme Court of Canada issued a decision in Daishowa-Marubeni International Ltd.’s case dealing with the tax treatment of future obligations that are assumed by a purchaser of assets.
According to a commentary on the case from Cassels Brock & Blackwell LLP, at issue the Daishowa case was whether the estimated cost of reforestation obligations assumed by a purchaser of a timber licence should be included in computing the seller’s proceeds of disposition. The Supreme Court held that the estimated cost of the reforestation obligations should not be included in the seller’s proceeds of disposition.

Pump failure delays Fortress co-gen project
The turbine component of the co-generation project at Fortress Paper’s Specialty Cellulose mill in Thurso, Que., has operated successfully, but the failure of a high-pressure water pump has delayed the completion of the project. The co-gen plant was expected to be operational by the end of the second quarter of 2013.
Fortress Paper announced July 2 that the water pump and a backup pump had failed. The pump will be either repaired or replaced.
Prior to this setback, the turbine component of the cogeneration project was successfully synchronized to the power grid and had operated up to 4 megawatts without incident, Fortress reports.

Fortress re-thinking Lebel-sur-Quevillon mill conversion
Presenting their first quarter results, Fortress Paper executives expressed confidence that the company’s dissolving pulp mill in Thurso, Que., can reach its operational targets, but there’s less confidence about the company’s second mill conversion project. Engineering design for the Fortress Global Cellulose conversion project at Lebel-sur-Quevillon, Que., is almost complete, but Fortress CEO Chad Wasilenkoff said the company is reviewing its options for the mill and “due to changing economics and market conditions, there is no assurance that the FGC mill project will proceed to completion as previously planned.”
Wasilenkoff said the company is evaluating strategic options for the Fortress Global mill, such as joint ventures or partnership opportunities, and is comparing the Lebel-sur-Quevillon project with other options for shareholder value creation.
“The economics of LSQ make sense, but it’s going to be challenging for us
taking this on 100%.” The current estimate of the cost for the conversion project is $250 million, plus an additional $70-$100 million for working capital.
A decision regarding the LSQ mill is expected early in the third quarter.


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