Pulp and Paper Canada

News
What’s New… (April 01, 2007)


April 1, 2007
By Pulp & Paper Canada

MILLS

CATALYST STREAMLINES

VANCOUVER, BC — Catalyst Paper is merging management at its Crofton and Port Alberni mills.

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The move comes as part of the company’s previously announced workforce reduction plan that will see the eventual shedding of 300 positions in 2007. This reorganization will cut 37 jobs at Port Alberni, in both administrative and staff capacities. The cuts will be made through attrition, transfers to other divisions, early retirements and some layoffs.

“Employees have worked hard to make these mills more efficient and have improved performance significantly,” Ron Buchhorn, senior vice president of operations said. “And we will continue to take the steps necessary to keep pace with the markets and strengthen our position in the paper grades we make. Our competitors are certainly not standing still.”

In addition to the management changes, Catalyst is seeking property tax cuts from the City of Port Alberni, and is looking to sell off surplus property at the mill site.

CAP EX

BIOMASS BOILER GETS GO AHEAD AT ABITIBI’S FORT FRANCES MILL

MONTREAL, QC — Abitibi-Consolidated is investing $84.3 million in a new biomass energy generator at its Fort Frances, ON mill.

The equipment will use renewable, cost-effective fuel from wood waste, to generate steam and 45.5 MW of electricity for the mill. The boiler will burn mill-generated wood waste and primary sludge, as well as harvest slash from woodlands operations and wood waste from area sawmills.

“The new equipment will be instrumental in our strategy to reduce our energy costs and improve the overall competitiveness of the mill,” said Alain Grandmont, senior vice president, commercial printing papers. “With this boiler, the mill will be less dependent in the future on market energy pricing and better equipped to compete in the fiercely competitive global marketplace.”

FORESTRY

DECISION ON WOOD RIGHTS EXPECTED SOON

KENORA, ON — A dispute over wood rights should have a resolution within the next several weeks, Natural Resources Minister of Ontario David Ramsay said.

According to a report by Miner and News, Kenora Forest Products is seeking to implement an expansion plan at its local mill, a move expected to add a total of 250 jobs to the region, which was recently ravaged of 440 positions due to the forestry crisis. Concurrently, First Nations communities want to protect their traditional land, the report confirmed.

Ramsay, additionally responsible for Aboriginal affairs, noted the various complex issues involved in handing down a decision and was quoted by the Miner and News as saying, “We want to make sure of certainty of supply,” and that “We are in constant communications with First Nations.”

SALE

P&G SELLS TISSUE/TOWEL BUSINESS TO SCA

CINCINNATI, OH — Procter & Gamble Company is selling its Western European tissue/towel business to SCA.

Included in the transaction are manufacturing assets, P&G’s Tempo brand in Europe and Hong Kong, and the licensing of Charmin and Bounty trademarks in Europe.

“This is a strategic choice to focus on continued growth of P&G’s tissue, towel and facial tissue businesses in the U.S., Canada and Mexico, led by billion dollar brands Bounty and Charmin,” said David Taylor, president of P&G’s global tissue and towel business.

Procter & Gamble expects that employees at five manufacturing plants in Europe will become employees of SCA at the deal closing date, the time for which remains dependent on regulatory processes in Europe. The divestiture represents roughly 1% of P&G’s total sales.

ENVIRONMENT

CASCADES TWICE A WINNER

SAINT-JEROME, QC — The second Environmental Printing Awards gala proved doubly successful for Cascades Fine Papers Group. Held on February 21 in Toronto, the ceremony marked the granting of two awards to the company, a gold award for the Most Environmentally Progressive Vendor in Canada, and bronze for the Most Progressive Environmental Process on its biogas energy project.

“This gold award provides for Cascades the proof that the printing industry wants more than just buzz words and marketing campaigns,” said Normand Lecours, vice-president of sales and marketing. “It is concrete actions that count. Credibility can only be gained by really doing what we say.”

MILLS

CANFOR TAKES DOWNTIME

VANCOUVER, BC — Canfor took downtime at five of its sawmill operations in British Columbia. In an attempt to offset difficult market conditions, the company idled the facilities, effectively removing 70 million board feet of lumber production from the market.

Canfor’s Vavenby mill was closed from March 19-25, while the Mackenzie mill took an additional two weeks of downtime that started on March 26, and is now continuing with a four-day operational schedule.

The Chetwynd, Plateau and Rustad sawmills shut down for the week of March 19, for one week, March 26 for two weeks and April second for two weeks, respectively. Planer operations continued throughout the downtime.

NEWSPRINT

NEWSPRINT DECLINE SUGGESTS TOUGH YEAR: SALMAN PARTNERS

VANCOUVER, BC — A report released by Salman Partners indicated that total U.S. consumption and of newsprint and U.S. dailies consumption dropped 11.5% year-over-year and 9.1% in January.

The report confirmed, “January included one less Sunday of consumption which we believe was responsible for 2.5% to 3% of the year-over-year consumption decline. Net of this difference, we note that consumption was still down sharply from the full-year decline of 7.1% and 6.3% in 2006, respectively…Even more troubling than the acceleration of the negative consumption trend, is the fact that newsprint prices are falling hard. We note that newsprint pricing, as tracked by Foex Indexes Ltd., topped out at US$643.88 per tonne (30lb newsprint) on June 6th and has traded down US$43.67 per tonne or 5.9% since that time. At the same time, the lighter basis-weight 27lb paper has decreased by US$43.67 per tonne, or 6.4%. Heavy price discounting at the renewal of a number of six-month contracts, as well additional contract volumes, was the reason for the lower newsprint prices.

“Pulp & Paper Week estimates that prices in February were US$630 per tonne, down US$45 per tonne from the peak in September. We note that newsprint prices had been on a steady upward trend since bottoming out in the summer of 2002. Producers were able to get these price hikes by managing newsprint supply, but it seems that the group has now lost their resolve. With the announced deal to combine Abitibi and Bowater, we suspect that other newsprint producers will wait to see what the ‘big dog’ does once the deal is consummated in Q3. Unfortunately, this wait-and-see attitude isn’t going to do anything to stop the price decline in newsprint.”

Corrections: Please note that in the February issue of PPC, Industry News included an item concerning the certification of Millar Western woodlands. The Canadian Standard Association develops standards, but does not certify an organization to that standard. They developed the CSA Z809 Sustainable Forest Management Standard to which Millar Western was to certify to. Millar Western was certified to the standard by QMI, and not CSA. PPC regrets the error.

The March issue of PPC contained an article entitled, Global Relevance of ISO Standards in the Pulp and Paper Industry, which the author revised in the bar chart of Figure 2. Please visit the online version of the article to see the correction.

MILLS

CANADIAN MILLS BUY UP OCC

MONTREAL, QC — Canadian mills bought a hefty amount of old corrugated containers last December, the Pulp and Paper Products Council reported. Canadian
facilities purchased 146,606 metric tons, marking a 25% increase from December 2005. This contrasts with nearly flat to negative purchasing of other recovered paper grades.

From 2005 to 2006, OCC purchases shot up 13%, reaching a total of 1.75 million metric tons. News consumption as a whole fell 6%, while purchases of #8 news rose 2%, PPPC confirmed. Mixed paper purchasing rose 8%, while interest in boxboard cutting fell 23%. Total consumption by Canadian mills last year increased 1%.

FORESTRY

STORA DEFENDS LOGGING RECORD

HELSINKI, FINLAND — Stora Enso has released an official statement declaring that it doesn’t destroy old-growth forests.

The statement comes as a rebuttal to a claim made by Greenpeace that alleges Stora continues to source wood from Metsahallitus, the Finnish state-owned forestry group which, according to a Forbes report, ‘has been felling trees in old-growth woodlands since November.’

Forbes cited Greenpeace as saying ‘the company’s own reassurances about logging in ancient forests contrast with the views of some 240 Finnish scientists, who regard the practice as ecologically unsustainable.’

The Stora Enso statement claims the company ‘does not purchase wood from old-growth forests as defined in national stakeholder processes, unless the purchases are clearly in line with the national conservation regulations.’ Stora further claims that although it does indeed own and log in the Metsahallitus region, these areas in Forest Lapland have not been defined as old-growth in the national stakeholder process.

PAPERCLIPS

PUTTING PAPER IN ITS PLACE

Contrary to popular belief, Canadian usage of paper has not dropped dramatically, especially in offices. According to a recent report by AMPQ Magazine, although rampant fear that the preponderance of the Internet would revolutionize the way we use paper, such a phenomenon has not, in fact come to fruition.

In 2006 alone, the report confirmed, Canadians made use of roughly 700,000 tonnes of office paper. Global consumption of paper has shot up threefold in the past 30 years and experts predict a 50% worldwide increase before 2010.

However, the article referred to a society without paper as ‘utopian’ and called on papermakers to embark upon a systematic reorganization within the next few years. More than ever, the article cautioned, paper companies will need to offer green alternatives, reduce energy costs, contend with the fluctuating dollar and pressures coming from Brazil and China.

MACHINE SPEED

STORA ENSO SETS SPEED RECORD

ALBANY, NY — The Stora Enso Kvarnsveden mill in Sweden set a new world speed record for supercalendered paper production on PM12. On March 14-15, the machine reached a 24-hour record average of 1901 m/min. “Three out of four positions in the press section were clothed with Speedplane and HydroDuct, both designs based on proprietary 100% nonwoven technology,” said Sven-Arne Svensson, Albany International Regional Business Director. “The dryer section of PM12 was exclusively clothed with Aero2000, a dryer fabric that was developed by Albany for extremely high speeds.”

The machine started up in November 2005 and is currently producing more than 900 tonnes of high-quality uncoated SC magazine paper per day. The machine’s annual production capacity is 420,000 tonnes of paper produced from virgin spruce fibre.

AQUISITION

OMYA CONCLUDES HUBER PURCHASE

PROCTOR, VT — Omya has wrapped up the acquisition of the Huber Precipitated Calcium Carbonate business. Included in the deal are a total of 11 plants: four in North America, five in the European Union, one in South America and a final in Russia. “We visited the North American plants…and are very impressed with the commitment and dedication of each employee,” said Jim Reddy, president of Omya Industries. “These new members of the Omya team are committed to the business at hand and have been flexible and patient during the acquisition process. We are looking forward to working with them to enhance the PCC product line.”

TECHNOLOGY

NORSKE SKOG ORDERS METSO TECHNOLOGY

HELSINKI, FINLAND — Norske Skog has ordered Metso Automation’s Optimal Refining Solutions for its Skogn mill in Norway and its Tasman facility in New Zealand.

Optimal Refining will be delivered to enhance thermo-mechanical pulping operations in the main line refiners, screening, reject refining and specific energy optimization. At the Skogn mill, the installation will be made on the TMP2 plant, while at the Tasman mill, on the TMP plant.


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