Features Research & Innovation
News (July 01, 2003)

AWARD

DOMTAR IS 7TH BEST CORPORATE CITIZEN

MONTREAL, QC — Domtar Inc. was named one of Canada’s 50 best corporate citizens, according to a study published in the current issue of Corporate Knights magazine.

Ranking 7th overall, Domtar placed the highest of paper and forest products manufacturers on the list. Relying on research conducted over the last 12 months by EthicScan, Sustainable Investment Group (SIG) and Innovest, the study evaluated the largest companies on the TSX using various criteria, including community relations, diversity in the workplace, product safety and business practices.

Corporate Knights, launched in 2002, is a quarterly business magazine devoted to highlighting corporate social responsibility in Canada. Distributed free with the Globe and Mail, Corporate Knights has over 150,000 readers.

AWARD

AL-PAC WINS TWO ENVIRONMENTAL AWARDS

CALGARY, AB — Alberta-Pacific Forest Industries (Al-Pac) picked up two major awards for its efforts to address climate change.

Al-Pac was one of seven Canadian companies to receive a Pollution Prevention Award, in celebration of the innovative ways that Canadian companies are practicing pollution prevention, from the Canadian Council of Ministers of the Environment.

The company also won an Emerald Award in the Board of Governors’ Climate Change category. It was the third Emerald Award for Al-Pac, with previous wins in the Large Company and Community Organization categories.

AWARD

SMURFIT-STONE GETS RECOGNIZED

CHICAGO, IL — Smurfit-Stone Container Corporation’s Consumer Packaging division received a variety of industry awards for its packaging products from several associations, including the Paperboard Packaging Council, The Packaging & Label Gravure Association, the Gravure Association of America, Inc. (GAA) and the Flexographic Technical Association.

Smurfit-Stone’s Santa Clara, CA, facility also earned a GAA Golden Cylinder Award for best printing on paperboard for the Adidas Forever Sports carton. The company’s Renton, WA, folding carton facility also received the 2002 Vendor of the Year Award from Nordstrom. Smurfit-Stone also won FTA Gold and Silver Awards for Listerine-Tarter Control Gel toothpaste and Listerine Essential Care toothpaste packaging, respectively.

ACQUISITION

SMURFIT-STONE ACQUIRES ARKO

CHICAGO, IL — Smurfit-Stone Container Corp. has acquired the operations of Arko Paper Products Company, Inc., a folding carton producer with plants in Piscataway and Plainfield, NJ. The purchase price was approximately $30 million US.

Arko Paper Products specializes in producing folding cartons for a variety of cosmetic and personal care companies. The two facilities employ approximately 170 people. The operations will become part of Smurfit-Stone’s Consumer Packaging division.

INTERNATIONAL

UPM-KYMMENE GOES TO THE BALTIC

HELSINKI, FINLAND — UPM-Kymmene Corporation has established a company for wood procurement in the Baltic countries.

UPM-Kymmene Forest AS, will be responsible for the pulpwood and wood chip deliveries from and via the Baltic countries to UPM-Kymmene’s Finnish mills as well as birch log deliveries to UPM-Kymmene’s plywood mill, FSS Plywood AS, located in Otep, Estonia. The mill uses currently approximately 60,000 cubic metres of raw wood material annually.

It is estimated that the fibre raw material deliveries exported from the Baltic countries to Finland will increase up to more than one million cubic metres annually in the next few years.

UPM-Kymmene Forest AS is based in Tallinn, Estonia. Forester Tnis Merand has been appointed as Managing Director of the company. He has previously worked as Chairman of AS Forestex, a company earlier in charge of UPM-Kymmene’s wood procurement in Estonia. UPM-Kymmene withdrew from the ownership of AS Forestex as part of a transaction in Estonia with Stora Enso, finalized on May 23.

RECYCLING

AUSTRALIA LEADS IN NEWSPAPER RECYCLING

SYDNEY, AUSTRALIA — Australia is a world leader in recovery and recycling of newspapers, according to figures released by the Publishers National Environment Bureau (PNEB) in Sydney.

Australia recycled 72.8% of the newsprint consumed in 2002, compared to 71.2% for the U.S. that year. For Australia this was up from 72.4% in 2001.

The statistics are compiled by the News Limited Environmental Secretariat for the PNEB which represents the major newspaper and magazine publishing companies in promoting and encouraging recycling of newspapers and magazines.

PAPERCLIPS

JOINT VENTURE

DOMTAR AND TEMBEC TEAM-UP

MONTREAL, QC — Domtar Inc. and Tembec Inc. have reached an agreement-in-principle to create a joint venture that will be equally owned by both companies.

The new company will bring together their timber and softwood (SPF — spruce, pine and fir) lumber operations in the provinces of Quebec and Ontario. It will also market the softwood lumber manufactured by Tembec at its SPF sawmills operations in British Columbia and by Domtar at its Lebel-sur-Quvillon, QC, sawmill.

The new company will have assets valued at approximately $850 million and its pro forma net sales for 2002 total $900 million. It will have a manufacturing capacity of 2.1 billion board feet and a sales capacity of 2.6 billion board feet. Based on its sales capacity, the joint venture will be the second largest solid wood products company in Canada and the fourth largest in North America. The name of the new company as well as the location of its headquarters will be announced at the time of closing.

Spruces, Pines and Firs unite: Domtar and Tembec will bring together their timber and softwood lumber operations.

HARRY POTTER ZAPS RECYCLED PAPER INTO BOOK!

Wizards, environmentalists and papermakers will be happy to hear that the Canadian edition of the latest Harry Potter book series is the only one printed on 100% recycled, endangered-forest-free paper.

Raincoast Books’ move to print Harry Potter and the Order of Phoenix in eco-friendly paper was given a rare endorsement by Potter author J.K. Rowling, which appears prominently in the Canadian edition:

“The forest at Hogwarts is home to magical creatures like unicorns and centaurs. Because the Canadian editions are printed on Ancient-Forest Friendly paper, the Harry Potter books are helping to save magnificent forests in the muggle world…”

Company spokesperson said the paper used to print the 950,000 books was outsourced from San Francisco-based New Leaf Paper, since no Canadian mills manufactured this particular grade at the time. But since then, two mills have jumped into the bandwagon and are now manufacturing this eco-friendly paper.

SHUTDOWNS

BOWATER SHUTS THUNDER BAY

GREENVILLE, SC — Bowater Inc. temporarily shut down its newsprint and market pulp mills in Thunder Bay, ON, due to wood fibre shortages in northwest Ontario.

Production ceased on June 28th for 9 days. The shutdown eliminated 17,000 metric tons of newsprint and 21,000 metric tons of market pulp production. These curtailments and the additional cost of wood fibre reduced the company’s pretax operating results by approximately $10 million US.

TEMBEC SHUTS TWO PULP MILLS

TEMISCAMING, QC — Tembec curtailed operations at two of its Canadian kraft pulp mills due to a temporary wood fibre shortage.

The mills, which were closed for two weeks, are located in Marathon and Smooth Rock Falls, ON.

The reduction is estimated to be 15,000 MT of pulp production, equivalent to approximately 10% of the company’s quarterly Canadian kraft production.

Wood supplies to the pulp and paper industry, particularly in Eastern Canada, have been seriously impacted by the U.S. countervail duties on lumber exported to the U.S.

DOWNTIME ON THE B.C. COAST

VANCOUVER, BC — As a result of poor market conditions, Weyerhaeuser Co. Ltd. shut down five Crown timberlands operations and five sawmills, all on the coast of British Columbia.

All five of Weyerhaeuser’s Crown timberlands operations on the coast, including West Island, North Island, Stillwa
ter, Port McNeill, and Queen Charlotte Islands, will be down for the month of July. On the mill side, Somass and Island Phoenix Division will be down for four weeks, Alberni Pacific Division for three weeks, New Westminster for two weeks and Chemainus for one week.

… AND IN ONTARIO

Weyerhaeuser also shut down the larger of two uncoated free-sheet paper machines for a week at its mill in Dryden, ON, due to high paper inventories.

The #D2 paper machine was shut on June 29 for seven days.

No regular employees were laid off but the downtime affected up to 80 summer student employees and mill call-crew employees.

DOMTAR JOINS IN

Domtar temporarily idled its mills in Cornwall, ON, Woodland, ME and Port Edwards, WI.

The entire Cornwall integrated mill was down for one week effective June 29. The Woodland mill curtailed pulp production for one week and paper production for 10-11 days, effective July 3.

CIGARETTE PAPER

GIOVANNI BAREZZI AWARD

Presented by Cartiera del Maglio, the competition is now on for the international prize for study and research worth 10,500 Euros to be awarded to the author of the best research paper, thesis or project in the field of cigarette papers.

The subjects treated in the paper must be able to promote in all ways the world of cigarette paper production. Topics can be technical and production, quality control, technological, environmental, legal and economical matters, market-related and social issues, as well as health concerns.

Deadline for submission is September 15, 2003. Details at www.barezziaward.com#text2#