Excerpt from an article by Martin Laflamme-Mayer
Excerpt from an article by Martin Laflamme-Mayer
On the invitation of Dr. Paul Stuart, Chairholder of the NSERC Environmental Design Engineering Chair in process integration at Ecole Polytechnique – Montreal, Dr. Richard B. Phillips presented a short course entitled “Paper Industry Capital Spending Strategies” from August 6th to 9th.
Dr. Phillips is an Adjunct Professor in the Department of Wood and Paper Science, and Executive-in-Residence at North Carolina State University. Prior to his current position, Dr. Phillips worked for 34 years at International Paper including as Senior Vice-President – Technology. He was involved with the development and deployment of many of IP’s current manufacturing and technical systems, in particular in the area of strategic planning, technology, manufacturing excellence, and product- and process-related research & development. The course was a unique opportunity for graduate students and university researchers to benefit from Dr. Phillips’ intimate industry knowledge and long experience in decision making at the highest level.
Most interestingly, on the last day of the course, the implications of capital spending practices for the implementation of the forest biorefinery were discussed.
The successful management of capital projects not only requires selection of projects that accomplish a tactical or strategic objective for the enterprise, but also good implementation.
New product development is characteristic of strong growth industries and unfortunately, the pulp and paper sector does not perform well in this regard. Dr. Phillips noted that since the introduction of corrugated box approximately 100 years ago, there have been only a few examples of the development of new “transformational products” that provide superior value to customers and create new markets for the pulp and paper industry. New product development is critical to success and should be seriously considered, for example in the context of biorefinery, because it has the potential to open the path to new profitable markets and customers.
There are significant process-related challenges that need to be addressed for the economically-viable implementation of the biorefinery in the pulp and paper industry and consequently, a significant research effort must be invested for both hemicellulose extraction prior to pulping and biomass gasification. Wood can be competitive with other feedstock sources in terms of cost, quality and availability, processing costs and logistics. Since the cost and availability of forest biomass are likely to be key issues, a biorefinery analysis must incorporate the complete supply chain, and consider aspects such as biomass harvesting technology, landowner decision processes, forestry practices, availability of residues, transportation, etc. Currently, corn-based ethanol is more competitive in the US. Nevertheless, a number of avenues, such as the development of fast-growing and lower lignin hardwoods and the repurposing of existing kraft pulp mill assets to produce ethanol, can be considered to improve the competitiveness of wood compared to corn. Since there is no operating wood-to-ethanol production plant, implicated capital cost for the forest biorefinery is also a risk issue, and the economics need to be further clarified. A holistic analysis is critical to provide target conditions that ensure, at the plant level, a satisfactory profit and return on investment. Since a greenfield plant is unlikely to be economically viable without significant subsidies, the base case should consider the repurposing of a kraft pulp mill that provides a better chance of financial success.
For the complete article and more information about future events, please consult the NSERC Environmental Design Engineering Chair at www.pulp-paper.ca.
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