March 2007





International Paper to Sell Pine Bluff, Arkansas Mill to New Zealand Based Carter Holt Harvey 

Flambeau River Papers LLC to Reopen Former Smart Papers Mill in Park Falls, Wisconsin

Newsprint Consolidation—Abitibi Consolidated Inc. and Bowater Inc. are Joining Forces

Weyerhaeuser Completes $3.3B Domtar Deal

Kruger to Build $200 Million De-inking Plant in Trois-Rivieres

Vietnam Paper Industry Prints Plan for Growth

Protavia Wants Australian Government Subsidies for Pulp Mills

India’s Andhra Paper to Invest Rupee 3 Billion for Paper Production

Three Pulp Mills to be Constructed in Ethiopia



International Paper to Sell Pine Bluff, Arkansas Mill to New Zealand Based Carter Holt Harvey 

International Paper to Sell Pine Bluff, Arkansas Mill to New Zealand Based Carter Holt Harvey 

International Paper Co. has signed an agreement to sell its beverage packaging business - including its Pine Bluff, Arkansas pulp and paper mill - to Auckland, New Zealand-based Carter Holt Harvey Ltd. for approximately $500 million.


The transaction, which was first announced in mid-October, is expected to close in the first quarter of 2007, subject to regulatory approvals.


The Pine Bluff mill has an annual payroll of approximately $60 million, spokesman Jim Davis said.


International Paper’s beverage-packaging business employs approximately 3,000 employees - including 1,060 in Pine Bluff - and annually produces more than 680,000 tons of packaging for juice, dairy and other products. The business had net sales of approximately $860 million in 2005.


The Pine Bluff mill, which began operation in 1958, has two paper machines: one that produces a significant portion of the world’s liquid packaging board for beverage cartons, and one that produces coated papers for magazines.


Carter Holt Harvey, a leading forest-products company in New Zealand and Australia, now has no facilities in North America.


In 2006 the company expects to record net sales in excess of $2 billion. It has 7,500 employees.


From 1992 through mid-2005, International Paper owned a major share of Carter Holt Harvey, a publicly traded company. John Faraci, International Paper’s chairman and chief executive officer, came from Carter Holt Harvey, where he was chief financial officer.


International Paper sold its 50. 5 percent interest in the company in September 2005 to Rank Group Investments Ltd., which is owned by New Zealander Graeme Hart.


In Arkansas, International Paper previously announced the sale of approximately 540,000 acres of timberland, a kraftpaper facility in Fordyce and a lumber mill in Leola. Remaining for disposition are a plywood mill and lumber mill in Gurdon and a tree nursery in Bluff City. International Paper plans to retain its corrugated-container plants in Conway, Jonesboro and Russellville.


In addition to the Pine Bluff paper mill, International Paper’s beverage-packaging business includes plants that produce cartons in Massachusetts, Michigan, North Carolina, Florida, California, Ontario and Quebec; a packaging manufacturing facility in Iowa; wholly owned subsidiaries in China, South Korea and Taiwan; and joint ventures in Latin America, Israel and Saudi Arabia.

Source: Arkansas Democrat-Gazette 


Flambeau River Papers LLC to Reopen Former Smart Papers Mill in Park Falls, Wisconsin

Flambeau River Papers LLC to Reopen Former Smart Papers Mill in Park Falls, Wisconsin

Flambeau River Papers, LLC of Park Falls, Wis., has received a $2 million loan from the Department of Commerce to reopen and operate the former Smart Papers Mill. The award was approved at the Wisconsin Development Finance Board meeting held today in Madison.


Flambeau River Papers, LLC, will use the loan for the purchase of the facility and equipment and for working capital. The company expects to rehire 300 former Smart Papers workers when the mill is fully operational. The total project cost is $22.7 million. The company and the City of Park Falls are also completing an application for a $2 million Community Development Block Grant program loan.


The mill is a critical purchaser of wood throughout northern Wisconsin, buying 140,000 cords of wood per year. Flambeau River Papers, LLC, estimates that reopening the mill will support an additional 300 small logging businesses in the region and strengthen prices in Wisconsin's logging industry. The mill buys lumber harvested under sustainable forestry practices.

Source: Office of the Wisconsin Governor Jim Doyle


Newsprint Consolidation—Abitibi Consolidated Inc. and Bowater Inc. are Joining Forces

Newsprint Consolidation—Abitibi Consolidated Inc. and Bowater Inc. are Joining Forces

Abitibi Consolidated Inc. and Bowater Inc. are joining forces. The new company, called AbitbiBowater Inc., will be majority owned by Bowater but headquartered in Montreal, with the U.S. office remaining at Bowater’s base in Greenville, S.C.


Though both companies retired assets and converted some production to more lucrative paper grades, it simply wasn’t enough to keep up with rising energy costs, other expenses and a North American newspaper market that continues to ratchet down its consumption of newsprint.


John W. Weaver, currently president and chief executive officer of Abitibi, will head the firm. David J.  Paterson, Bowater’s president and CEO, will retain the same title at AbitibiBowater. The company’s board of directors will consist of 14 directors, seven from each organization.


The all-stock deal is expected to close this fall after regulatory review.


The combined company will become the third largest forest products company in the world, with sales approaching $7.9 billion, operating 32 pulp and paper mills and a variety of wood products facilities.


The newsprint portion will have more than 6.4 million metric tons of production capacity and another 3.1 million metric tons of uncoated mechanical publication grade paper (like supercalendared, offset qualities).


AbitibiBowater will initially operate 20 newsprint mills in North America and one each in the United Kingdom and Korea, with another 16 (with some overlap) producing uncoated mechanical grades.


The proposed merger comes as U.S. newsprint production fell by more than 6 percent last year to a projected amount of 5.2 million metric tons. Imports from Canada, meantime, dropped by more than 8 percent to just over 4 million metric tons. Inventories fell and exports from U.S. mills remained constant.


Domestic demand dropped to about 9 million metric tons, down almost 25 percent since 2000.


Big daily papers bought fewer than 7 million metric tons of newsprint in 2006, about a third of what they bought five years ago. Commercial printing on newsprint increased slightly, but not nearly enough to offset the drops from metros.


Even as consumption dropped, however, prices rose, with newsprint in 2006 exceeding $675 per metric ton before falling near the end of the year. By early February, 30-pound newsprint was priced at $612 per metric ton while 27-pound paper eclipsed $654 per metric ton, according to market watcher FOEX.


For 2007, mills’ operating rates are expected to remain high and prices firm. Though easing natural gas prices will help take the pressure off production costs, an insatiable market for recycled paper and falling volumes are likely to keep producers on the defensive.


Absent an economic disaster or big drops in demand from the daily newspapers, prices will hover around $600 per metric ton for the balance of the year.


Uncoated mechanical grades had a nice year in 2006. Consumption was up about 3 percent over 2005, helped by production increases at U.S. plants and small reductions in shipments received from Europe and Canada.


The strength of the Canadian dollar and Euro plays a big role in the uncoated mechanical markets, making their products more expensive than domestic reels (same for magazine paper).


World capacity, particularly in Asia, is growing for newsprint. This means real trouble for domestic producers, especially for shipments to the West Coast.


China recently started up a new machine owned in part by NSI of Norway and other newsprint machine commissionings are imminent.


Asia and the Far East cannot possibly absorb new capacity as quickly as it comes on, meaning the region will swamp traditional export markets for North American production, speed closures in Japan, and attack West and Gulf Coast markets in the United States.


In Europe, newsprint consumption is steady. Growth of Eastern European markets continues slowly while capacity growth proceeds measurably - i.e., new machines come on as old ones are closed.

Source: Newspapers & Technology


Weyerhaeuser Completes $3.3 Billion Domtar Deal

Weyerhaeuser Completes $3.3 Billion Domtar Deal

Forest products giant Weyerhaeuser Co. said it has completed the sale of its fine-papers business, including a facility in Washington Court House, in a cash-and-stock deal to Canadian paper products maker Domtar Inc.


Domtar paid $1.35 billion in cash for Weyerhaeuser's 10 paper and pulp mills, 14 converting centers and two sawmills. The transaction gives Weyerhaeuser's shareholders 55 percent ownership of the new company, dubbed Domtar Corp. (NYSE:UFS). Former Domtar shareholders will own 45 percent of the Montreal-based company.


The total value of the deal is $3.3 billion.


Federal Way, Wash.-based Weyerhaeuser's fine paper unit, which produces uncoated paper, reported a $613 million loss on sales of $3.3 billion for 2006. The unit's sales made up 14.4 percent of the total company's $22.89 billion in sales last year.


Weyerhaeuser employs about 66 at its Washington Court House facility.

Source: Business First of Columbus


Paper Producer Kruger to Build $200 Million De-inking Plant in Trois-Rivieres  

Kruger to Build $200 Million De-inking Plant in Trois-Rivieres

Paper producer Kruger Inc. will invest $200 million in its mill at Trois-Rivieres to build a de-inking plant to handle the recycling of paper into pulp.


It was the largest of two financial injections for the province's troubled forestry industry, with SFK Pulp Fund (TSX:SFK:UN) announcing it has received a $6 million interest-free loan from Investissement Quebec to support investment in the industry.


The company said the investment will create 200 full-time jobs during construction and the plant will have an annual capacity of 342,000 tonnes.


The firm said the new plant will position Kruger as a North American leader in the manufacture of publication papers with a high recycled fibre content.


The announcement was made in the presence of Liberal Premier Jean Charest and Economic Development Minister Raymond Bachand.


Charest, who is campaigning for the March 26 election, said the announcement is an example of sustainable development that will help the forestry industry.


"We're going through a period of intense change," Charest said of the troubled industry. "We're going to go through this transformation and come out of it stronger if we make changes like the one today."


Quebec is kicking in $70 million - $20 million in direct aid and $50 million in loans - for the project.


The new plant will be more energy-efficient and use 20 per cent less energy than the current mill.


The Investment Quebec is injecting into SFK Pulp to allow for the modernization of its mill at St-Felicien, Que., by upgrading its brown pulp washing technology.


That will ease new environmental technology and help the mill remain competitive.


"This financial assistance will allow SFK Pulp to accelerate its investment program at the St-Felicien mill and thus maintain the mill's level of excellence," said CEO Andre Bernier.


SFK operates three mills with a total production capacity of 735,000 metric tonnes and employs about 550 people.


The investments are good news for the Quebec forestry sector, which was hit last year with thousands of job losses and the closure or idling of dozens of mills and woodcutting operations.


A strong Canadian dollar, higher electricity and fuel costs, falling lumber prices, a soft U.S. housing market and a dwindling supply of wood to harvest have all taken their toll on the industry, which forestry industry experts predicted would be a lot leaner in 2007.


The de-inking plant will use a new technology to produce two grades of pulp that can be used to make newsprint as well as supercalendered and coated papers. This pulp will entirely replace groundwood pulp and will be used to produce value-added papers with recycled fibre content.


It will take roughly 2˝ years to complete the project.


Kruger operates plants in Quebec, Ontario, Alberta, British Columbia, Newfoundland and Labrador, the United States and the United Kingdom. It has 10,000 employees.

Source: 940 News, Montreal


Finland Posts Record Paper, Pulp Output

Finland Posts Record Paper, Pulp Output

Finland produced a record amount of paper, paperboard and pulp in 2006, valued at $27 billion, an increase of 14 percent over 2005, industry representatives said Wednesday.


Volumes of paper and paperboard peaked at 15.5 tons, while pulp production also hit an all-time high of 14.3 tons, the Finnish Forest Industries Federation said.


Finland accounts for about 4 percent of the world's paper production and more than 10 percent of magazine paper, while in Europe 60 percent of magazine paper is made in this small Nordic country.


Home to leading paper makers, including UPM-Kymmene Corp. and Stora Enso Oyj, Finland was hit by strikes and lockouts in 2005, incurring losses of more than $1.2 billion.


Negotiations resulted in a pact between the industry and unions that allowed producers to keep mills running during the traditional holiday periods at Christmas and midsummer, pushing 2006 production volumes over the previous record year of 2004.

Source: Forbes Magazine


Protavia Wants Australian Government Subsidies for Pulp Mills

Protavia Wants Australian Government Subsidies for Pulp Mills

The company behind two $600 million pulp mills, at Penola in south-eastern South Australia and Heywood in south-west Victoria, is seeking $100 million in government subsidies.


Protavia plans to install water saving technology at its proposed mills, at a cost of $120 million per site.

Protavia managing director Graham Chappel says the mills will use seven times less water than a pulp mill in China, but it will be 45 per cent more expensive to build.


Mr Chappel says the technology shows a future for Australian manufacturing, but he does not believe investors should shoulder the entire risk.


"The future costs will reduce as a better understanding develops about cleaning and recycling water," he said.


The mills have received state and Federal Government development approval and developers hope the mills will begin construction later this year.

Source: ABC News


Vietnam Paper Industry Prints Plan for Growth

Vietnam Paper Industry Prints Plan for Growth

The paper industry will attempt to raise VND95.5 trillion (US$5.9 billion) in capital to invest in further development during 2006-20, under a plan approved by the Ministry of Industry.


More than VND87 trillion ($5.4 billion) of the total will be allocated to building paper and pulp mills and more than VND7.9 trillion ($494 million) to forest planting.


Viet Nam Paper Association general secretary Vu Ngoc Bao said that the forest capacity was enough for paper production but investment was inadequate to properly exploit this capacity.


According to association statistics, the volume of pulp produced in Viet Nam in the last twenty years rose only 70,000 to 80,000 tonnes. Vietnamese paper producers still tend to only make simpler kinds of paper, such as newsprint, letter paper, and packaging paper.


The low quality of paper leaves the industry uncompetitive.


Pulp produced by domestic enterprises at present meets only 37 per cent of the processor demand due to the out-of-date technology and unstandardised processing. Paper processors still import 63 per cent of raw materials for paper production.


The issuance of a plan through 2010 by the Ministry of Industry, including orientations to 2020, will help the paper industry focus on main points of improving technology and boosting co-operation with overseas partners in a bid to ensure sufficient products for domestic needs and export.


To this end, the industry will focus on developing forests and ensuring sufficient supplies of raw materials for producing 600,000 tonnes of pulp by 2010 and 1.8 million tonnes by 2020, as well as to reach the target of meeting 70 per cent of domestic demand by 2020.


India’s Andhra Paper to Invest Rupee 3 Billion for Paper Production

India’s Andhra Paper to Invest Rupee 3 Billion for Paper Production

The Andhra Pradesh Paper Mills (APPML), which commissioned a Rupee(Rs) 5 billion new fibre line in Nov, 2006, is expanding its paper production capacity by 85,000 tonne per annum (tpa) at a cost of Rs 3 billion, reports Business Standard.  


Following the expansion programme, APPML`s installed paper production capacity is expected to touch 2.6 lakh tpa. Besides newsprint, the company produces industrial grade writing and printing paper.  


Post commissioning the new fibre line, APPML`s pulp production capacity has increased from 280 to 550 tonne per day. The firm is the largest single street elemental chlorine free (ECF) pulping plant in the country.  


The surplus pulp of 100 tpd is currently being sold to other paper manufacturers like ITC, Rayalaseema and Seshashayee paper mills.

Source: Iris News Digest


Three Pulp Mills to be Constructed in Ethiopia  

Three Pulp Mills to be Constructed in Ethiopia

Three pulp mills are to be constructed in Ethiopia jointly with Land and Sea Development- Ethiopia (LSDE), and Chinese and Indian companies.


LSDE started undertaking bamboo development in Benshangul-Gumz State with a capital of 136 million dollars on a plot of 393,000 hectares of lease free land. The company has also secured another 50,000 hectares in the state for plantation and harvesting eucalyptus trees.


At the official inaugural ceremony of the company’s office at Assosa, Founder and CEO of the company, Dr. E. Druce Fisher told Capital that the company is in final negotiations with a Chinese company MCC International and an Indian company, Andhra Paper Mills Ltd. for the construction of pulp mills in Benshangul-Gumz State and Oromia Regional State. The mills have a capacity of producing 100,000 and 75,000 tons of pulp respectively.


The mills are scheduled to come on line in two years and would cost about 360 million dollars, which would be a 50/50 joint venture between LSDE and the other parties.


The company is also negotiating with another Indian company J.K Paper Ltd., to open a third mill that with a capacity of producing 500,000 metric tons of pulp.


According to officials of the company, the new ventures would put Ethiopia as the seventh biggest producer of pulp after all factories become operational.


The activities of LSDE are divided into three phases the first of which would be harvesting the naturally grown exotic bamboo species that could be developed in a short period of time. The second phase is the export of bamboo for which the company has already secured an order. The final phase would be the establishment of a paper mill that utilizes the plant for raw material.


LSDE has also signed a contract agreement providing for the sale and delivery of dry raw bamboo, eucalyptus forest material and products to its clients – pulp and paper mills in India and China.


The company would also start exports after the trucks the company ordered have been delivered and after the Environmental Protection Agency (EPA), approves their application with a license for harvesting the forest. The company is under negotiations with EPA for and the agency is reviewing the company’s plans.


The company’s president said that it would be harvesting and re-planting bamboo, hybrid eucalyptus and other non-wood crops that could be used in the pulp and paper manufacturing process.

Source: Nazret.com




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