Features Research & Innovation
What’s New… (May 01, 2004)

SALE

G-P SELLS ARACRUZ INTERESTS

ATLANTA, GA — Georgia-Pacific has agreed to sell all of its interests in three Brazilian companies, which own a minority, non-voting interest in Brazilian pulp company Aracruz Celulose S.A.

The undisclosed purchaser is reportedly paying approximately $75 million US for the deal. After-tax proceeds from the sale are expected to be approximately $56 million US and the company expects to record a $10 million US gain upon closing.

The transaction is expected to close during second quarter 2004. The company expects to use the proceeds from the transaction to further reduce its debt.

ENVIRONMENT

DOMTAR ACCOMMODATES ECO-FRIENDLY CUSTOMERS

MONTREAL, QC — Domtar has upgraded its coated lightweight paper for magazines, catalogs and book publishers seeking to satisfy eco-conscious customers.

The Domtar Schooner product is the latest to achieve Forest Stewardship Council certification, making it the only North American publication paper whose raw materials can be traced through a Chain of Custody to environmentally sustainable forests. Other Domtar products available in FSC-certified varieties include Domtar Cornwall Coated Cover and Domtar Opaque – Plainfield.

In addition to the FSC certification, Domtar Schooner has been improved to 84 Brightness. It is available in matte and gloss finishes and features an enhanced blue-white shade for sharper colors and more vibrant flesh tones. The paper is elemental chlorine free and it comes in basis weights from 38 to 60lbs.

STATISTICS

U.S. NEWSPRINT CONSUMPTION INCREASES

MONTREAL, QC — Newsprint consumption by U.S. dailies increased 0.8%, according to the Pulp and Paper Products Council.

Total consumption, however, fell 2.4% after two months and 2% year-over-year.

Shipments from North American mills rose 0.5% compared to February of last year, due to a 9.8% increase in North American exports. Sales to the domestic market fell 1.3% year-over-year due to a flat North American demand — the drop in Canadian demand offset the growth in the U.S.

By the end of February, North American mill inventories had increased by 22,000 tonnes from the preceding month, closing at 358,000 tonnes.

AWARDS

SMURFIT-STONE WINS 2 AWARDS

CHICAGO, IL — Smurfit-Stone Container Corporation earned the top two awards in the 61st annual National Paperboard Packaging Competition presented by the Paperboard Packaging Council, becoming only the second company to win both honors with a single package design.

Competing against more than 240 entries in total, the “Family Time Snacks Perfect Popper” popcorn box, created and manufactured by Smurfit-Stone, won the President’s Award and the Innovation Award.

ACQUISITION

NORAMPAC ACQUIRES JOHNSON

MONTREAL, QC — Norampac Inc. acquired shares of Johnson Corrugated Products Corp., a corrugated products plant in Thompson, CT.

This facility has an annual capacity of more than 750 million square feet and employs 100 people. Founded in 1964, this independent corrugated plant specializes in the production manufacture of all kinds of corrugated boxes: from the traditional, multi-purpose regular slotted box, to the die-cut box or extra large box.

ACQUISITION

G-P ACQUIRES INLAND

ATLANTA, GA — Georgia-Pacific Corp announced the completion of the acquisition of the Inland Paperboard and Packaging, Inc. assets located in Ontario, Calif., and Harrington, Del.

The Harrington packaging facility produces high-end litho-laminated corrugated packaging for beverage, consumer goods and telecommunications customers. The plant employs approximately 120 people.

The Ontario packaging facility also produces high-end litho-laminated packaging and serves customers in the toy, electronics, produce and consumer goods industries. The plant employs approximately 60 people.

The facilities will be managed by Color-Box, LLC, a wholly owned subsidiary of Georgia-Pacific.

ENVIRONMENT

ABITIBI PLEADS GUILTY

ST. JOHN’S, NF — Abitibi-Consolidated pleaded guilty on March 30 to charges under the federal Fisheries Act and was fined $10,000 and was sentenced to pay for all work needed to ensure that its Grand Falls Windsor paper mill meets the Fisheries Act requirements.

A provincial court judge also ordered the company to contribute $100,000 to Canada’s Environmental Damages Fund.

The required upgrades could cost as much as $7 million. Ecolog Weekly reports that a compliance order issued by the court details the work that must be done, lays out a strict timetable and calls for penalties if deadlines are not met.

All the upgrades must be completed by November 2004.

MILL

TEMBEC SUPPORTS GASPESIA INQUIRY

TEMISCAMING, QC — Tembec said it will cooperate with the Quebec government’s independent commission of enquiry into the cost overruns at the Papiers Gaspsia construction site.

Tembec’s management has been pressing the provincial government to launch an inquiry into the failure of Papiers Gaspsia, as well as into the operation of large construction sites in Quebec. Tembec management said in a statement that holding an independent inquiry will bring about a critical review of the framework governing the construction industry in Quebec. The company said the results of this enquiry will help the government to determine the changes required to create a climate conducive to the effective management of large construction sites in Quebec.

SOFTWOOD

WTO DISMISSES CANADIAN LUMBER COMPLAINTS

GENEVA, SWITZERLAND — The World Trade Organization (WTO) rejected almost all of Canada’s complaints against U.S. anti-dumping duties on softwood lumber, but ruled that the U.S. was wrong to exclude highly priced Canadian lumber when deciding whether there was dumping.

The WTO ruled that the U.S. was within its rights to launch the anti-dumping investigations that lead to the imposing of punitive duties on imports of Canadian lumber.

The ruling will force the U.S. to review how it calculates the price of imports and hence the amount of duty it can apply.

A day after the ruling, Tembec announced it has received notice from the U.S. Department of Commerce that it intends to reduce Tembec’s anti-dumping duty deposit rate on softwood lumber exports to 6.28%. Since May 22, 2002 Tembec has been depositing anti-dumping duties of 10.21% on softwood lumber exports to the U.S. The announcement represents almost a 4% reduction in tariffs.

PAPERCLIPS

PAPER SNOWBOARDING

Paper is not what comes to mind when thinking of snowboarding. But five students from Miami University in Ohio won the 2004 Energy Challenge as their paper snowboard proved its worth and durability, speeding downhill around flags, over rollers, and clearing a six-foot rail slide.

Thirteen teams took to the slopes at Winter Park Resort to test how well they did since the start of the school year in designing and constructing a snowboard made exclusively from paper materials.

“When we saw Mike (the team’s snowboarder) clear the slope in 18.3 seconds on such a smooth ride, we were extremely pleased and felt good about how we constructed the board,” said team member Margaret Huseman.

Rules required the snowboards to be made of at least 80 percent paper fibre. The students designed and engineered their snowboards using paper materials such as chemical wood fibre, corrugated board and liner board. Commonly used paper chemicals were allowed in the finishing and bonding of the board.

The team scored 88.8 overall points and its board measured 83 percent paper fibre. Other members included Ben Van Lear, Colleen O’Donnell, Michael Loufman and Joel Hahn.

FORESTRY

CANADA’S FORESTS GET PROTECTED

OTTAWA, ON — The third Canada Forest Accord was signed by the Minister of Natural Resources Canada, R. John Efford, as a formal commitment supported by forest ministers, heads of industry and non-governmental organizations, to work together toward the long-term health of Canada’s forests.

The Accord complements the National Forest Strategy 2003-2008, which aims to improve forest practi
ces and policies over the next five years, and strengthen the competitiveness of Canada’s forest sector.

JOINT VENTURE

CANFOR & SLOCAN TEAM UP

VANCOUVER, BC — Canfor Corp. and Slocan Forest Products Ltd. have completed the combination of their businesses pursuant to a plan of arrangement.

The combined business will have approximately 13 million cubic meters of annual harvesting rights under its forest tenures.

Under the arrangement, Canfor acquired all of the issued and outstanding shares of Slocan in exchange for the issuance to Slocan shareholders of 1.3147 Canfor shares for each Slocan share held by them, representing approximately 49.3 million Canfor shares.

Canfor and Slocan believe that the combination creates a world class, integrated forest products company with the production capability, competitive cost structure, product diversification and supply chain management necessary to succeed and grow in the highly competitive global forest products industry.

With production facilities in British Columbia, Alberta, Quebec and the United States, Canfor now has an annual production capacity of over 5.2 billion board feet of lumber, 950 million square feet of plywood and oriented strand board (OSB), 1.2 million tonnes of high quality NBSK pulp and 142,000 tonnes of kraft paper.