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What’s New… (October 01, 2004)

INVESTMENT...


October 1, 2004
By Pulp & Paper Canada

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INVESTMENT

KRUGER INVESTS IN PACKAGING

MONTREAL, QC — Kruger is investing $7 million to establish a new packaging plant in Brampton, ON as part of Phase II of its investment program in the packaging sector.

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A hefty portion of the sum will be used to purchase and install a box-making press. The machine will produce four-colour corrugated packaging, permitting Kruger to increase its packaging production capacity in Ontario.

The first phase of its upgrading initiative saw the modernization of the corrugator and the installation of a five-colour rotary die cutter press at Kruger’s Rexdale plant in Toronto, Ontario. A three-colour rotary die cutter press was also installed at its LaSalle packaging plant in Montreal. Combined, the phases account for an overall investment of $12 million.

NETWORK

WEYERHAEUSER’S NETWORK

FEDERAL WAY, WA — Wilton Connor Packaging is now officially part of Weyerhaeuser’s Retail Experience Network. An integration of retail knowledge and printing and packaging expertise, the network will now be able to meet customer’s retail-specific needs. Products and services include creative and structural design, primary packages, point-of-purchase displays, contract packaging/ fulfillment, logistics and project management.

Wilton Connor Packaging became a joint venture with Weyerhaeuser in 1998 and a wholly owned subsidiary in 2003.

LUMBER DUTIES

WTO RULES IN CONSUMER’S FAVOUR

WASHINGTON, D.C. — The World Trade Organization has decided the U.S. Department of Commerce’s zeroing methodology used to calculate antidumping duties, is in violation of trade agreements. A victory for U.S. consumers in their fight to see free trade in softwood lumber imports from Canada, the WTO-issued report is expected to culminate in the elimination, or significant lowering of the 8% antidumping duty imposed on softwood lumber imports.

FORESTRY

LEVELING THE PLAYING FIELD

OTTAWA, ON — The Canadian forest products industry has also got a boost from the World Trade Organization. WTO members have agreed to the establishment of a framework for negotiations that will allow the organization’s Doha Development Agenda to move forward.

“This announcement is very good news for the Canadian forest products industry and the over 250,000 employees and 300 communities that are dependent on the industry to export its products,” said FPAC president and CEO Avrim Lazar. “The competitiveness of Canada’s forest products industry is second to none, but the industry has in the past been subjected to far too many anti-competitive trade practices. Reaching a successful conclusion to the Doha negotiations will be an important step towards ensuring that the forest products industry and other exporting sectors are able to compete on a level playing field.”

ACQUISITION

VALSPAR BUYS FOREST COATINGS BUSINESS

MINNEAPOLIS, MN — Valspar Corporation has completed the purchase of selected assets of the forest products business of Associated Chemists.

Although terms of the transaction were not made public, the deal has placed product line items such as edgesealers, surface primers, paints, stains, inks and specialty chemicals for oriented strand board manufacturers and other forest product industry players, into Valspar’s hands.

Richard Rompala, the company’s chairman and CEO feels the purchase was a wise strategic decision. “The forest products business we’re acquiring from ACI is an excellent fit with Valspar,” he confirmed. “Their technology portfolio enhances our offerings in the building products arena and expands our customer relationships in this important market.”

Rompala expects the transaction won’t impact Valspar’s earnings until 2005.

ACCIDENT

COSTLY COLLISION

PEKANBARU, RIAU — A collision between a barge and a freighter nearly cost over a half a million US dollars.

The barge, loaded down with wood chips from Benghalis, hammered into a freighter owned by PT Kindah Kiat Paper and Pulp. The accident resulted in a hole ripped into the freighter’s hull, out of which 2,300 tons of pulp began to seep. Dock workers worked frantically to pump water out of the offending aperture so that as much of the material could be saved as possible.

Although the final tally has yet to be determined, with the current price of pulp steady at approximately $300 US, according to the Jakarta Post, the losses could reach up to $690,000 US.

SHARES

UPM BUYS LIGNIS SHARES

HELSINKI, FINLAND — UPM has acquired a minority of shared in Lignis GmbH & Co. Established in Germany by local forest owners, Lignis has access to approximately 60,000 hectares of forestland in Southern and Western Germany. Annually, it harvests and trades about 50,000 cubic metres of wood.

UPM anticipates the new partnership will strengthen the position of both companies in the wood supply market in Central Europe.

CERTIFICATION

CASCADES OBTAINS C-TPAT CERTIFICATION

KINGSEY FALLS, QC — Cascades Inc. has been admitted to the Customs and Trade Partnership Against Terrorism (C-TPAT). This program was created by the U.S. Department of Homeland Security following the tragic events of September 11, 2001 and is designed to provide increased security at every stage in the supply chain, while continuing to promote cross- border commercial exchanges through close co-operation between government and the private sector.

Companies benefiting from C-TPAT accreditation agree to adopt strict security regulations while enjoying speedier customs clearance at the US- Canada border.

CLOSURE

BOWATER CLOSES MILL

THUNDER BAY, ON — Bowater’s decision to close its groundwood mill in Thunder Bay will culminate in the loss of 50 jobs.

The mill closed its doors on August 20th, after a series of scale-back moves that no longer made continued operation a viable option. In June 2003, the mill shut down its PM3, which left the company with an overstock of pulping capacity. At the time, other facets of the operation absorbed the excess material. However, recent alterations in product mix meant the extra capacity was no longer needed. The mill is closed for an indefinite period of time.

ACQUISITION

INTERFOR BUYS THREE MILLS

VANCOUVER, BC — The US Bankruptcy Court in Phoenix, Arizona has approved the acquisition of the sawmill assets of Crown Pacific Limited Partners and its affiliates in the US Pacific Northwest by International Forest Products.

The deal had been in the works for over a month when it was announced on August 19th that Interfor had decided to buy three Crown Pacific mills. The purchase came to $57.3 million U.S., plus working capital estimated at $16 million US. The transaction officially closed on September 1st.

“We are very pleased that this deal has been approved by the courts,” said Duncan Davies, president and CEO of Interfor. “This acquisition is consistent with our goal of expanding geographically and expanding our product lines,” he added.

The three mills will increase Interfor’s total lumber capacity to nearly 1.3 billion board feet per year. Combined, the mills have an annual capacity of 335 million board feet.

ARBITRATION

CASE CLOSED

ALBANY, NY — Paper machine clothing manufacturer Albany International has won arbitration. When the company purchased the Geschmay group in 1999, the sellers alleged a subsidiary of Albany had wrongfully terminated two leases it entered into in connection with the procurement. The sellers claimed damages of approximately $19 million. However, the arbitrators adjudicated the subsidiary was legally entitled to prorogate the leases and further, that no damages were payable.

The arbitration was filed in February of 2003. The arbitrators’ decision is final and not subject to appeal.

CLOSURE

NACKAWIC MILL SHUTS DOWN

NACKAWIC, NB — There are currently 49 feet of stainless steel irony standing proudly in the town of Nackawic. When the Forestry Capital committee constructed a statuesque axe in 1991 to serve as a reminder of the town’s status as Canada’s forestry capital, it’s a sure bet the 400 work
ers at the St. Anne Nackawic mill never dreamed they would be getting the axe 13 years later.

September 14 marked the closure of the pulp mill, leaving 400 people without jobs and an entire town reeling from shock. A bolstered Canadian dollar and exiguous market conditions are being fingered with blame for the closure.

According to CBC News, negotiations between Business Minister Peter Mesheau and mill owners Parsons and Whittemore came to a head on Monday night when the proprietors offered to sell the mill for $50 million. When the government abjured, the company shut down the mill.

The mill first opened its doors in 1970, providing more than half the town with employment. The mill created opportunities for a wide range of derivative businesses, providing many townspeople with forest related or industrial jobs. The prior success of the mill secured Nackawic residents with some of Canada’s highest grossing family incomes.

PAPERCLIPS

Reports have proven that paper typically used in the manufacture of postage stamps is highly acidic. Should an acidic stamp be posted on an alkaline album page, meaning the page has a pH of 7.0 or more, the acid contained in the stamp can actually transfer to the page itself. This migration of acid is dependent upon several factors such as the degree of acidity, humidity of storage conditions, type of mount, gum, ink, taggants and other materials contained in the stamp paper. On the contrary, if the album page is acidic, meaning it has a pH of 7.0 or lower, the acid from the page might relegate to the stamp posted on the page. Again, the degree and time span may vary. However, numerous auction firms have called attention to the vast number of stamps and covers destroyed by acidic materials used to mount these items.

Source: www.askphil.org

EXPANSION

MARITIME PAPER EXPANDS

DARTMOUTH, NS — Maritime Paper Products Limited is about to undergo an $18,000,000 expansion and modernization project.

The undertaking will see the installation of a new high-speed BHS corrugator. Capable of producing light-weight boards with multiple flute profiles, the corrugator will be accompanied by printing and converting equipment designed to expand the company’s packaging repertoire. The facility itself will also be expanded in order to accommodate the additional machinery.


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