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Pennsylvania Shipping Port Becomes New Destination for Pulp Trade

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According to a report Monday (May 16) by the Philadelphia Inquirer Daily News, Philadelphia, Penn., USA, there has been an abundance of new wood pulp shipped through the Tioga Marine Terminal in Port Richmond, Penn.
Fibria Celulose, the world's largest producer of eucalyptus pulp, sends 360,000 tons of pulp a year from their base of operations in Brazil into Tioga on the Delaware River. And now other wood-pulp companies are looking to come, too. The Philadelphia Regional Port Authority, a state agency that owns the terminal, says it will need to retrofit a second warehouse to accommodate the expected influx.

In July 2014, Fibria made Philadelphia its Northeast U.S. distribution center, where pulp goes out by rail and truck to paper manufacturers in Penn., including Kimberly-Clark in Chester and Procter & Gamble in Mehoopany, and plants on the east coast and Canada.

A second pulp customer, CMPC Celulosa, of Santiago, Chile, recently began shipping to Tioga, and Brazilian pulp producers including Eldorado and Suzano may be interested in following Fibria's lead.

"Virtually every other wood pulp customer that's not here currently and goes through the Northeast has looked at, or is looking at, Philadelphia," said Sean Mahoney, the port authority's marketing director.

Terminal manager Patrick Kryszczak expects 460,000 tons of pulp at Tioga this year. "All of a sudden, we've become the wood pulp capital of the Northeast," he said.

The issue now is where to put it all. Members of the International Longshoremen's Association Local 1291 who unload the ships have to lay tarpaulins on the floor of a second warehouse "to keep the pulp from getting contaminated," said Boise Butler, president of Local 1291.

"We are hoping the state will do the right thing and accommodate these new customers," he said.

To meet Fibria's needs in 2014, the port authority made warehouse and rail upgrades and dredged around the berth at Tioga to handle bigger ships. The state also improved bridge clearances to accommodate bigger, taller boxcars. The total cost was just over $20 million.

Two years later, word of Fibria's success has spread and "now others are knocking on our door, saying if it worked for Fibria in Philadelphia there must be something to it," said Robert Palaima, president of Delaware River Stevedores, which employs waterfront labor at Tioga. In addition to wood pulp, other carriers are interested in bringing steel, aluminum ore, and "project cargoes" - odd-size equipment such as boilers and generators, Palaima said.
The deal to land Fibria first got a boost when Governor Tom Corbett met with company officials in Sao Paulo on his trade mission to Brazil and Chile in April 2013. Brazilian officials came to Philadelphia that August. Fibria relocated the business from the Port of Baltimore, and has moved extra volume to Tioga from ports in Mobile, Ala.; Jacksonville, Fla.; and Port Arthur, Tex.

Fibria shipped 181,000 tons in 2014 and 360,000 tons last year, and will send 10% more this year - "much more than we had expected," said Juliana Vizintim, North America logistics coordinator for Fibria.

Forest products were up 26.5% n Philadelphia port last year, and the "significant jump" was due to Fibria, said Greg Iannarelli, the port authority's chief counsel.

"Other wood-pulp companies have either committed, or are about to commit, to additional volumes," Iannarelli said. "We're looking at expanding additional warehouse space, converting it" at a cost of $4 million to $6 million. "We are in active discussions with the Delaware River Stevedores and the commonwealth about how to bring that to fruition."

With more space, Fibria "could think about increasing the volume even more," Vizintim said. "Right now, we use most of the terminal during the whole year, so there is a limitation on the space. If there was no limitation, for sure we would be able to increase more."

Fibria produces 5.3 million tons of pulp annually and sends about two ships a month to Tioga. The latest vessel, the Brassiana, hauled 32,000 tons to Tioga. Longshoremen worked round the clock unloading the bales.

"Three years ago at Tioga there was no activity at all," Butler said. "Now with this new influx of work, my guys are loading 16 to 18 railcars a day, plus trucks. The ships come in pretty loaded."

Fibria has an agreement with another Brazilian pulp producer, Klabin, to sell four million tons of Klabin's pulp annually. Fibria is also enlarging one of its four Brazilian mills to produce an extra 1.8 million tons by the end of 2017, Vizintim said.

Pulp cargo is a natural for Pennsylvania and the Northeast, home to a number of manufacturing plants for paper products. "In a good economy, or even a bad economy, people still need to buy diapers, bathroom tissue, Puffs and Kleenex," Palaima said.

P&G's plant in Mehoopany, Wyoming County, makes Bounty paper towels and napkins, Charmin toilet paper, Pampers and Luvs brand diapers. Kimberly-Clark's mill in Chester, Delaware County, makes Scott toilet tissue and Scott paper towels.

"We're already bursting at the seams," Palaima said. "We have 19 or 20 boxcar rail loading slots. Every day we are using 16. For this anticipated increase in business and new customers, we need 100,000 sq. ft. of warehouse space and an additional 9 or 10 boxcar rail slots.

"When these customers are ready, as a port operator, I have no choice but to say, 'Yes, we'll figure out a way to do it,' " he said.

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