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Travels with Larry Archive
Thursday, January 19, 2012
members edition
Eka Chemicals
Weekly Spotlight
SCA, Stockholm, Sweden, reports that the company's packaging operations, excluding its two kraftliner mills in Sweden, have been divested to DS Smith Plc, a U.K.-based producer of recycled paper and corrugated packaging
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Sappi Fine Paper North America, Boston, Mass., USA, has opened its call for entries for the 2012 North American Printers of the Year awards, a competition that recognizes print excellence and innovation in 10 categories for work produced on Sappi papers
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SCA, Stockholm, Sweden, has for the seventh year in a row received the Product of the Year/Товар года award in Russia for Zewa toilet paper
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Pöyry, Finland, a global consulting and engineering company, has become a member of the World Business Council for Sustainable Development (WBCSD), Geneva, Switzerland
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Market Roundup
U.S. containerboard production was flat in December, gaining only 0.8% over the same month last year
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Prices for woody biomass in the U.S., whether sawmill byproducts, forest residues, or urban wood waste, have been sliding for most of the past three years
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Total U.S. printing and writing (P&W) paper shipments decreased 7% in December compared with December 2010
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Total U.S. kraft paper shipments were 123,100 tons in December, a decrease of 7.5% compared with December 2010
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Total U.S. boxboard production decreased by 5.9% compared with December 2010, and decreased 4.6% from last month
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Pulp & Paper
The company says it will work closely with customers to continue to meet their needs from its Memphis facility.
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Catalyst Paper Corp., Richmond, B.C., Canada, reports that it has agreed to a recapitalization transaction that will result in a significantly reduced debt burden
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Fortress Paper Ltd., Vancouver, B.C., Canada, this week reported to have ramped up production of dissolving pulp at its Fortress Specialty Cellulose Mill to approximately 60% of final targeted capacity
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Norske Skog, Lysaker, Norway, this week signed a long-term energy contract with NTE (Nord-Trøndelag Elektrisitetsverk) for the supply of electricity for its paper mill at Skogn, Norway
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Metsä Tissue, part of the Metsäliitto Group, Espoo, Finland, reports that it will close its production, converting, and supply chain operations at the Konstancin-Jeziorna mill near Warsaw, Poland
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M-real Corp., Finland, part of Metsäliitto Group, has agreed to divest its Reflex mill's Premium Paper business to Walzmühle AG, Germany, which is owned by specialty paper producer Hahnemühle FineArt GmbH, the Hahnemühle management, and private shareholders of Hahnemühle
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Nippon Paper Group, Japan, reports that it will shutdown production facilities at its Iwakuni Mill (Japan) of Nippon Paper Crecia Co., Ltd., "to cope with severe conditions in the household paper products business."
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PMT Italia, Italy, reports that its workshops have successfully concluded the entire pre-erection of a completely new copy paper machine for Advance Paper Mill 3 (doubleA) in Thailand
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Stora Enso, Helsinki, Finland, effective this past Tuesday (January 17), renewed its business area and reporting segment structure
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UPM, Helsinki, Finland, this week said that it will permanently close down its unprofitable Albbruck paper mill in Baden-Württemberg, Germany
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Zhanjiang Chenming Pulp & Paper Co., China, has brought its new Metso (Finland)-supplied PM 1 fine paper production line on-stream at the its greenfield pulp and paper mill in Zhanjiang City, Guangdong Province, China
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Containerboard/Packaging
White top liner usage has been increasing the past 10 years to reach 12% of all containerboard consumed in Europe in 2010, from just 5% at the beginning of the last decade
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Knauf Danogips, Germany, owner of the Inlands gypsum wallboard facing mill in Lilla Edet, northeast of Gothenburg, Sweden, reportedly is preparing to cease production at the mill and close it down permanently
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Papier- und Kartonfabrik Varel, Germany, reports that it has started up steam turbine 9, significantly boosting the mill's power generation efficiency
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New Products
The new liner combines the softness of lightweight paper with the bulk and tear resistance of significantly higher weight paper
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Energy
The University of Florida, Gainesville, Fla., USA, this past week dedicated its new Stan Mayfield Biorefinery Pilot Plant in Perry, Fla., a cooperative venture between the University of Florida's Institute of Food and Agricultural Sciences and Buckeye Technologies Inc., Memphis, Tenn
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People
Sappi Ltd., Johannesburg, South Africa, this week announced that Mark Thompson, its current CFO, will retire in August, and that Steve Binnie, currently CFO of Edcon (Pty) Ltd, will join Sappi as CFO-designate on July 9
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Caraustar Industries Inc., Atlanta, Ga., USA, announced that Michelle W. Thornhill has joined the company as operations director of the Recovered Fiber Group, effective January 9
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Domsjö Fabriker, Írnsköldsvik, Sweden, reports that CEO Ola Hildingsson will retire March 1
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TAPPI News
January 30 Webinar: A Comparison of the FSC and SFI Forest Certification Standards, Katie Fernholz, Dovetail Partners.
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April 2, 2012 conference features a full technical program on renewable chemicals, plastics and bio-based materials and will be colocated with the Advanced Biofuels Leadership Conference.
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Papermaking Program at PaperCon showcases packaging grade experts plus tools and techniques to optimize mill operations.
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Themed "Building a Sustainable Future", conference will focus on practical operations and new technology.
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Manual covers causes and remedies for hundreds of defects affecting corrugated boxes and methods of correction for corrugated operational defects.
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Taylor was active in professional organizations including being a TAPPI member since 1942. He retired in 1974.
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Xerium Technologies, Inc.

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Naylor, LLC
Weekly Spotlight
SCA, Stockholm, Sweden, reports that the company's packaging operations, excluding its two kraftliner mills in Sweden, have been divested to DS Smith Plc, a U.K.-based producer of recycled paper and corrugated packaging. The purchase price totals EUR 1.7 million on a debt free basis.

"The reason for the divestment is primarily to enable increased growth in the hygiene business," Jan Johansson, president and CEO of SCA, noted.

The packaging operations, excluding the two kraftliner mills, had net sales in 2010 of approximately SEK 24.2 billion (EUR 2.5 billion) and an operating profit, excluding restructuring costs, of approximately SEK 1.1 billion (EUR 117 million). The operations have approximately 12,000 employees.

The purchase price is equivalent to an EBITDA multiple of 6.3 based on the 12 month period from the fourth quarter of 2010 to the third quarter of 2011.

In connection with the transaction, a goodwill write-down of approximately SEK 4 billion will be made, which means that the remaining kraftliner operations will not have any goodwill. The write-down will impact the result for the fourth quarter of 2011 and will be treated as an item affecting comparability.

The debt/equity ratio will decrease to approximately 0.5, provided that divestment of the packaging operations and the previously announced binding offer for Georgia-Pacific's European tissue operations are completed according to plan.

Earnings per share will decrease by SEK 0.75 based on net profit for the 12-month period from the fourth quarter of 2010 to the third quarter of 2011.

Regarding the French part of the packaging operations, the price which is included in the announced purchase price, DS Smith has made a formal offer to acquire this business. This process is subject to consultation with relevant works councils and will be treated separately.

SCA's two kraftliner mills in Sweden are not included in the transaction as they are well integrated with SCA's forest products operations.

"Over the years we have developed our packaging business and are divesting a competitive operation to an industrial buyer who can continue to develop it," Johansson, said.

The transaction is subject to approval from DS Smith's shareholders and antitrust clearance from the European Commission. Closing is expected during the second quarter of 2012. DS Smith will publish a prospectus regarding the transaction.

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Sappi Fine Paper North America, Boston, Mass., USA, has opened its call for entries for the 2012 North American Printers of the Year awards, a competition that recognizes print excellence and innovation in 10 categories for work produced on Sappi papers. Since 1999, the Sappi Printers of the Year awards program has been regarded as the world's most respected accolade of excellence in the printing industry.

To enter the competition, printers can submit any work printed between Jan. 1, 2011, and Dec. 31, 2011, that uses Sappi paper as the dominant stock and is printed in the U.S. or Canada. For each entry, six copies of the printed piece must be submitted by mail along with one copy of the entry form. The entry form and downloadable PDF entry form are available online. All entries must be received by the February 3 deadline.

As well as receiving industry-wide recognition, award-winning printers can win up to $20,000 to support their marketing and branding initiatives. In addition, selected printers will gain increased visibility with current and potential clients by being featured in Sappi's Printers of the Year Online Resource, a searchable database for designers, printer buyers, and corporations.

Printers may submit entries for one of 10 categories: annual reports, books, brochures, calendars, catalogs, digital print, magazines (sheet-fed), magazines (web), printer's own promotions, or general print (any printed material not included in the other categories). Each printer may submit an unlimited number of entries but each entry must be accompanied by its own entry form.

Gold Award winners represent the top prize in each category and are designated Sappi Printers of the Year. The 10 Gold Award winners are rewarded with up to $20,000 in support of the printer's marketing and brand initiatives, an additional 5,000 lbs. of paper provided by Sappi to support their sales and marketing projects, and entry into Sappi's International Printers of the Year.

Silver Award winners from each Sappi North America sales region are chosen in each of the 10 categories. These finalists then move on to represent their regions in the challenge for the Gold Awards and vie for Sappi Printers of the Year status.

Gold, Silver and Judges' Award winners will be featured through their own updatable web page on Sappi's Printers of the Year online resource to better connect them with designers, print buyers, and corporations.

Bronze Award winners will be included in the Printers of the Year online database, with their contact information available to all users.

All entries will be judged on overall impact of the piece, degree of difficulty in the printing techniques, and technical excellence. A panel of judges was chosen from recognized print institutions and trade professions. Names of judges and more information are available online.

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SCA, Stockholm, Sweden, has for the seventh year in a row received the Product of the Year/Товар года award in Russia for Zewa toilet paper. SCA also received for the first time an award for its Zewa handkerchiefs.

"We are especially proud to receive this prestigious award in the hanky category, as this is a relatively new category for Russian consumers," said Peter Steiner, marketing director at SCA for consumer goods in Eastern Europe.

"In 2011 the volume market share of hankies, our distribution in Russian cities, and sales grew significantly," Olga Gutnikova, brand manager for handkerchiefs and facial tissue at SCA, added.

One of the recipes for the growth was to introduce individual pack sales of Zewa hankies. "By allowing consumers to buy just a single pack, we encourage them to try the new product so that they can buy the entire package if the product meets their expectations," SCA explained.

Another factor is visualization in the stores. "We created several colorful dispensers, which helped to attract consumers' attention and place the product in cross-categories such as hankies for kids next to the Libero diapers," Victoria Gushina, head of the SCA trade marketing team in Russia, said.

During 2011, primary focus has been shifting the consumers' preferences towards the more premium Zewa Deluxe 3-ply toilet paper, SCA said. The company's national promotional campaign ("for those who want more!") to support Zewa Deluxe tissue proved to be very successful, it added. Not only did it increase sales volume of 3-ply toilet paper Zewa Deluxe, but it also strengthened the consumer brand loyalty to Zewa, SCA pointed out.

Among winners of the Product of the Year/Товар года award in other FMCG categories were Unilever, Schwarzkopf, and Coca-Cola. This rating of the consumer preferences was launched at the end of the 1990s. The award is given in the product categories that are frequently purchased at the retail chains. To select finalists, the independent rating agency tracks demand dynamics throughout the year based on ComCon and Nielsen data and other research companies, researches, and representatives of the key retail chains.

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Pöyry, Finland, a global consulting and engineering company, has become a member of the World Business Council for Sustainable Development (WBCSD), Geneva, Switzerland. Together with other WBCSD members, Pöyry contributes to solving some of our planet's biggest challenges that require high-quality consulting and design capabilities.

WBCSD is a global association dealing exclusively with business and sustainable development. The council plays the leading advocacy role for business and provides a forum for its members to share best practices and develop innovative tools.

"I am pleased to be able to welcome this internationally respected company, with its profound consulting and engineering knowledge, to our membership. Pöyry's experts will make a valuable contribution to our comprehensive work program, not least since the areas in which they operate so closely match it," says Bjorn Stigson, president, WBCSD.

"We are honored to have been invited to join a group of companies and individuals that are passionate about sustainable business. As stated in our vision, we aim to be recognized for our capabilities in engineering balanced sustainability. WBCSD provides us with a valuable platform from which to collaborate and accelerate development of sustainable business," says Heikki Malinen, president and CEO of Pöyry.

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Market Roundup
U.S. containerboard production was flat in December, gaining only 0.8% over the same month last year, according to AF&PA's (Washington, D.C., USA), December 2011 U. S. Containerboard Statistics Report released this week. Production was also flat compared with November 2011, increasing 0.2%; however, the month-over-month average daily production decreased 3.0%.

The containerboard operating rate for December 2011 was up slightly from December 2010, to 93.6% from 93.1%. Additional key findings from the report include:

  • Linerboard production increase slightly compared with last year
  • Corrugating medium production rose over the same month last year.
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Prices for woody biomass in the U.S., whether sawmill byproducts, forest residues, or urban wood waste, have been sliding for most of the past three years, but were still higher in the fourth quarter of 2011 in most regions than they were five years ago, according to the North American Wood Fiber Review (NAWFR), Seattle, Wash., USA. The price drop seen in 2010 and during the first half of 2011 was mainly the result of lower prices for fossil fuels, particularly that of natural gas, and reduced demand for energy. This declining price trend has reduced the interest by both commercial and residential energy consumers in switching to more expensive green energy, NAWFR notes.

The two major sources for woody biomass are bark from sawmills/plywood plants, and forest residues left after logging operations. In the major biomass-consuming regions of the U.S., prices for forest biomass have been $10 - $20/o.d. metric ton higher than for mill biomass during most of 2011. The region with the lowest biomass prices in the fourth quarter of 2011 was the West, while Maine and New Hampshire continue to have some of the highest prices in the country. In the U.S. South, prices have fallen 15% - 20% since early 2010 and forest biomass prices in the South Central states, in particular, have come down lately thanks to favorable weather conditions, according to NAWFR.

The much-heralded Chinese log export boom has impacted woody biomass pricing in the Pacific Northwest the past year. China does not allow the importation of logs with bark, which has resulted in an abundance of bark at export ports along the U.S. west coast, where export logs have been debarked. This new source of biomass supply has created headaches for biomass supply managers in the region as they have had to turn away ample supplies. As a result, prices for forest biomass, mill biomass, and urban wood have all declined between 5% and 10% during the fall, as reported by NAWFR.

Some biomass buyers have not only reduced prices, but also implemented strict quotas of delivered volumes. As long as prices for natural gas and oil are relatively low, there will not be much increase in demand for biomass and biomass prices will continue to stay relatively low throughout the country.

More information is available online.

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Total U.S. printing and writing (P&W) paper shipments decreased 7% in December compared with December 2010, according to the AF&PA's December 2011 Printing-Writing Preliminary Shipments Report published this week. Three of the four major P&W grades posted decreases compared with last December.

Coated papers decreased by 6% compared with last December, and are down 3% from last month. Coated free sheet (CFS) papers posted the only year-over-year increase, up 2% compared with last December, but interestingly down 4% from last month [see CFS trend deep dive below]. Coated mechanical (CM) papers, meanwhile, followed last month's 7.3% year-over-year decrease with a 13.7% decrease. This is the driving force behind the decrease in total coated paper shipments. CM shipments were down just 2% compared with last month.

Uncoated papers were down 7% compared with last December, but up 2% compared with November 2011. Uncoated free sheet (UFS) shipments posted an increase compared with November, up 4%, but decreased compared with last December, down 6%. Given the relative sizes of UFS versus uncoated mechanical shipments, these data alone explain the trend in uncoated paper shipments. reliminary uncoated mechanical (UM) shipments are showing a year-over-year decline of 12% and an 8% decline compared with November.

Coated free sheet trend deep dive. For CFS, 2007 was a strong year. In fact, October 2007 was the highest single month shipments for CFS, reaching 471,400 tons shipped. November was also strong, hitting a peak for November at 400,200 tons. As the recession took hold in 2008, November shipments hit a low point not seen since November 2002, coming in at 304,800 tons. As the economy improved, so did CFS shipments, getting to 332,800 tons in November 2009 and 331,100 tons in November 2010. November 2011, however, experienced a setback, coming in at 325.800 tons.

The tale is slightly different with regard to December CFS shipments. The peak for December shipments of CFS hit in 2006, at 415,500 tons, followed by another good month in December 2007 at 407,400 tons. The recession took its toll in December 2008, with shipments dropping to 287,700 tons, the lowest December level in the past 16 years. Shipments returned to trend levels in 2009 at 316,300 tons, followed by a very minor drop in 2010 to 313,200 tons. It is from this relatively low point that December 2011 shipments are being compared against, and as a result, preliminary CFS shipment data suggest there will be a 1% - 2% increase year-over-year.

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Total U.S. kraft paper shipments were 123,100 tons in December, a decrease of 7.5% compared with December 2010, according to the AF&PA's (Washington, D.C., USA) December 2011 Kraft Paper Sector Report issued earlier this week. Total inventory was 80, 200 tons this past month.

Additional key findings from the report include:

  • Total Unbleached kraft shipments decreased compared with 2010
  • Total bleached kraft shipments increased nine out of twelve months compared with the same month in 2010.
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Total U.S. boxboard production decreased by 5.9% compared with December 2010, and decreased 4.6% from last month, according to the December 2011 U.S. Paperboard Report published this week by the AF&PA, Washington, D.C. USA. Key points of the report include:
  • Unbleached kraft folding production increased over the same month last year, and increased compared with last month
  • Total solid bleached boxboard and linerboard production decreased compared with December 2010, and decreased compared with last month
  • The production of recycled folding decreased compared with December 2010, and decreased when compared with last month
  • Inventory of solid bleached kraft paperboard grew over a year ago.
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MAVERICK Technologies
Pulp & Paper
Buckeye Technologies Inc., Memphis, Tenn., USA, will close its Americana, Brazil, cotton linter pulp production line. The company says it will work closely with customers to continue to meet their needs from its Memphis facility.

Buckeye's Chairman and CEO John Crowe said that "this closure has become necessary due to the facility's uncompetitive cost position for the products it makes. This is primarily driven by the high cost of its cotton linter raw material supply. It is unfortunate that this closure will result in the termination of employment for approximately 60 dedicated employees. We have owned and operated the facility since 2000, and we value and appreciate the many contributions of the organization over the past 12 years. Buckeye will continue to operate the waste water treatment facility for the shared industrial site while we continue discussions with interested parties for the sale of the facility.

"We expect to incur about $2.4 million in restructuring expenses in calendar 2012 and a non-cash asset impairment charge of about $49 million in the October-December 2011 quarter. The closure is expected to generate an approximate $20 million cash benefit, primarily due to tax benefits related to the investment loss, assuming we are able to utilize all of our potential cellulosic biofuel credits by June 2016. Any additional cash benefit will be dependent on the final outcome of the facility sale process," Crowe explained.

Buckeye, a producer and marketer of specialty fibers and nonwoven materials, currently operates facilities in the U.S., Germany, Canada, and Brazil. Its products are sold worldwide to makers of consumer and industrial goods.

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Catalyst Paper Corp., Richmond, B.C., Canada, reports that it has agreed to a recapitalization transaction that will result in a significantly reduced debt burden. The company's management team and board of directors say they believe the proposed recapitalization offers substantial benefits to Catalyst Paper, including:
  • Enhanced flexibility to respond to the downturn in the market for paper, newsprint, and pulp;
  • Improved capital structure—$315.4 million reduction in debt
  • Reduced cash interest expense—up to $25.5 million reduction in annual cash interest expense ($37.0 million if paid in kind to the maximum extent possible).

Catalyst's management team and board also believe that, in view of the challenges and risks to the company's ongoing viability created by the current paper, newsprint, and pulp markets and the company's existing capital structure, the recapitalization is the best alternative available to the company and its noteholders, shareholders, and other stakeholders. The new capital structure will provide a stronger financial base for the execution of the company's operating strategy and enhance the long-term value of the company, Catalyst notes.

"This transaction addresses the company's capital structure and interest payment obligations, extending its operating horizon," said Dallas Ross, director and chair of the board's independent committee overseeing the noteholder negotiation. "Based on extensive management analysis and independent review of options related to preservation of enterprise value, the board is unanimous in its recommendation that all shareholders and noteholders support this transaction."

The company intends to implement the recapitalization through a plan of arrangement under the Canada Business Corporations Act (CBCA). In addition, the agreement is subject to termination if a new labor agreement with all union locals at the company's Canadian mills has not been ratified by January 31.

Catalyst Paper produces specialty mechanical printing papers, newsprint, and pulp with four mills in British Columbia, Canada, and Arizona, USA. The company has a combined annual production capacity of 1.9 million metric tons.

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Fortress Paper Ltd., Vancouver, B.C., Canada, this week reported to have ramped up production of dissolving pulp at its Fortress Specialty Cellulose Mill to approximately 60% of final targeted capacity. Fortress began production of dissolving pulp at the mill this past December 5.

"The ramp up of production continues substantially as planned and we expect meaningful improvements in the short term followed by smaller productivity gains as we approach our targeted production capacity. Our dissolving pulp is meeting customer specifications and after aggregating inventory, customer shipments commenced in the final week of December," the company noted in a news release.

Chad Wasilenkoff, CEO of Fortress Paper, said that "we are extremely pleased with the speed at which the ramp up of dissolving production is proceeding at our Fortress Specialty Cellulose Mill and are focused on achieving our planned production capacity as soon as possible. With the shipment of our first orders, we have demonstrated our ability to successfully produce dissolving pulp that meets the stringent specifications of our customers."

Fortress operates internationally in three distinct business segments—dissolving pulp, specialty papers, and security paper products. The company operates its dissolving pulp business at the Fortress Specialty Cellulose Mill in Canada, which is also in the process of expanding into the renewable energy generation sector with the construction of a cogeneration facility.

Fortress operates its specialty papers business at the Dresden Mill in Germany, where it produces specialty non-woven wallpaper base products. The company's security paper products are made at the Landqart mill in Switzerland (banknote, passport, visa, and other brand protection and security papers) and at its Fortress Optical Facility in Canada, which produces optically variable thin film material.

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Norske Skog, Lysaker, Norway, this week signed a long-term energy contract with NTE (Nord-Trøndelag Elektrisitetsverk) for the supply of electricity for its paper mill at Skogn, Norway. The new agreement, together with an agreement that was signed with Statkraft last year, secures Norske Skog Skogn sufficient energy for full operation of the mill. The agreement term is seven years from Jan. 1, 2012. It ensures a supply of 0.4 TWh per year until Dec. 31, 2018.

"We are very pleased with this agreement. Norske Skog Skogn is important both for the group and for the forest industry in central Norway. This is an important contribution to securing jobs in Skogn," said Sven Ombudstvedt, president and CEO in Norske Skog,

Skogn is one of the most environmentally sound and effective paper mills in Europe, Ombudstvedt notes, adding that a strong Norwegian krone and challenging market conditions in the industry means that the mill must have access to stable and secure energy supplies at an acceptable price to maintain operations.

"NTE is pleased to have in place an agreement with a key energy-intensive industrial firm in our region. Norske Skog at Skogn is an industry cornerstone in North-Trøndelag, with significant wealth creation and employment. The energy agreement also correlates well with our strategy for hedging energy production," NTE CEO Torbjørn R. Skjerve said.

Norske Skog Skogn employs 450 people. Production started in 1966. The mill produces newsprint, with the U.K as its largest single market.

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Metsä Tissue, part of the Metsäliitto Group, Espoo, Finland, reports that it will close its production, converting, and supply chain operations at the Konstancin-Jeziorna mill near Warsaw, Poland. Operations will be terminated in April.

The company says it has carefully analyzed three alternative options for the future use of the Konstancin-Jeziorna site, which were initially communicated in May 2010. The three alternatives were to use the site for warehousing and converting, to use it solely for warehousing, or to rezone it for residential development. The company has now confirmed that all production at the site will cease in April and the two latter options are to be studied further.

"As our Polish and other Eastern and Central European customers can be served by our other mills in Poland, Slovakia, Germany, and the Nordic countries, after weighing our options, this decision – though not easy – was the only sensible course of action. The closure will affect up to 140 employees," said Hannu Kottonen, CEO of Metsä Tissue. The company has initiated a consultation procedure with the Polish employee representatives.

"We made this decision to close our operations in Konstancin-Jeziorna also due to the obsolete infrastructure, which would have required significant short- and long-term investment and would have been unsustainable for the company," added Lars Warvne, SVP, Technology and Operations, Metsä Tissue.

Since the initial announcement in May 2010 and during the evaluation of the three options, Metsä Tissue has been working intensively with local authorities to find sustainable solutions to offset the impact of the closure on the community infrastructure. Metsä Tissue has been discussing the option of rezoning the site for alternative uses with local authorities. The rezoning option could support the city's development as an attractive residential area close to Warsaw. At this stage, the company wants to keep alternative uses of the site open.

As part of Metsä Tissue's development program announced in May 2010, the company will invest in upgrading its Krapkowice mill in southern Poland to increase production capacity and to enhance the brand, product, and service offering. Implementation of the plan, which includes the closure of Konstancin-Jeziorna's operations, will contribute to better productivity and sustainability, while also ensuring that the company remains a reliable long-term partner for its customers.

Metsä Tissue has production units in Finland, Germany, Poland, Russia, Slovakia, and Sweden. It employees some 3,200 people, and its turnover for 2010 was about EUR 940 million. Metsä Tissue is part of the Metsäliitto Group.

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M-real Corp., Finland, part of Metsäliitto Group, has agreed to divest its Reflex mill's Premium Paper business to Walzmühle AG, Germany, which is owned by specialty paper producer Hahnemühle FineArt GmbH, the Hahnemühle management, and private shareholders of Hahnemühle. The divestment includes the complete Premium Paper business and related assets as well as approximately 100 of M-real's employees.

The mill's Premium Paper products are used in high-quality graphical end-uses, such as letterhead, brochures, books, calendars, and envelopes.

The divestment, expected to be closed during the first quarter, would decrease M-real's annual sales by approximately EUR 20 million and would not have a material impact on M-real's operative result. The divestment is not expected to have a material non-recurring result or cash flow impact taking into account the bookings made in the fourth quarter of 2011.

"We are very satisfied that the well-recognized specialty paper producer Hahnemühle takes over the Reflex Premium Paper business. Our actions to build a business park at Reflex by finding other producers to the site have been very successful. Thanks to our business park concept, more than half of the original 400-plus jobs can be saved at the mill. Key issues in the success have been excellent cooperation with the union, works council, local authorities, and Metsä Tissue Corp., which is already our partner at the site. Based on this experience, we will have a good opportunity to also implement the successful business park concept at Gohrsmühle mill," says M-real's CEO Mikko Helander.

After divestment of the Premium Paper business, M-real has no operations left at the Reflex mill. Discontinuation of the carbonless paper converting was agreed to in late 2011. In October 2010, M-real sold No. 5 paper machine and some related assets at the Reflex site to Metsä Tissue.

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Nippon Paper Group, Japan, reports that it will shutdown production facilities at its Iwakuni Mill (Japan) of Nippon Paper Crecia Co., Ltd., "to cope with severe conditions in the household paper products business." These facilities account for about 15% of Nippon Paper Crecia's entire production capacity. Transferring products produced at the Iwakuni Mill to Kyoto and other mills in Japan will raise the operation ratio of production facilities to 90% or above.

By shutting down production at Iwanuni, Nippon Paper Crecia says it intends to reduce fixed costs and enhance production efficiency, thereby strengthening the competence of its household paper products business. After shutting down the production facilities, the Iwakuni Mill will be converted to a logistics center, aimed at strengthening functions and covering the Chugoku, Shikoku, and Kyushu regions.

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PMT Italia, Italy, reports that its workshops have successfully concluded the entire pre-erection of a completely new copy paper machine for Advance Paper Mill 3 (doubleA) in Thailand. The new machine sections are now being shipped to the mill site for erection.

Start-up of the new mill and machine is scheduled for the second half of this year.

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Stora Enso, Helsinki, Finland, effective this past Tuesday (January 17), renewed its business area and reporting segment structure The paper reporting segments Newsprint and Book Paper, Magazine Paper, and Fine Paper were combined into one business area and reporting segment called Printing and Reading. The reporting segments Consumer Board and Industrial Packaging now form the Renewable Packaging business area and reporting segment. A new business area and reporting segment called Biomaterials includes mainly the company's joint-venture pulp mills, stand-alone pulp mills, and wood plantations. The Wood Products business area was renamed Building and Living.

The company thus has four business areas and reporting segments:

  • Biomaterials, headed by EVP Juan Bueno
  • Printing and Reading, headed by EVP Juha Vanhainen
  • Renewable Packaging, headed by EVP Mats Nordlander
  • Building and Living, headed by EVP Hannu Kasurinen.

"We are organizing our businesses based on the different markets and customers they serve. The aim is to increase our organization's competitiveness, flexibility, speed, and accountability, and to minimize interdependences between the businesses to ensure that we have the ability and agility to seize opportunities arising from changes in the global economy," said CEO Jouko Karvinen.

The first financial report according to the new reporting segment structure will be the first quarter 2012 Interim Review to be released on April 24. Historical figures according to the new reporting structure will be published on Stora Enso's Capital Markets Day on March 22.

The company notes that it will change the formulation of how it gives its forward-looking guidance, effective from fourth quarter 2011 results onwards. The group will cease to give future grade-specific price and demand guidance, and instead will give forward-looking guidance for quarterly sales and operational EBIT for the ongoing quarter to improve the capital markets service.

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UPM, Helsinki, Finland, this week said that it will permanently close down its unprofitable Albbruck paper mill in Baden-Württemberg, Germany. The discussions between UPM, the employee representatives, and local authorities did not lead to a solution for continuing operations at the mill. Neither was the search for an investor successful.

Closure of the mill is affecting 508 employees of the mill. The personnel reductions will take place on January 31.

"UPM Albbruck mill has been making a loss for several years due to the age and relatively small size of the machines, and the mill is not cost competitive within UPM's asset and global customer portfolio. Under the difficult circumstances, the highly qualified employees have done an excellent job. Unfortunately, it would not have been possible to improve the mill's profitability to an extent that would have allowed sustainable operations," said Jyrki Ovaska, president, UPM's Paper Business Group.

During the negotiations concerning reconciliation of interest and social plan, issues such as pension schemes, support for re-employment, relocations within the company, re-training, and compensation payments were discussed and agreed upon.

"We understand the disappointment of the Albbruck mill employees. All of the participants at the round table discussions have done their utmost to find a future-oriented concept for the mill. Despite this strong commitment of people involved, no solution could be found as the concepts presented by potential investors were not economically sound. UPM will implement a social plan to alleviate the effects caused by personnel reductions in a responsible way," said Hartmut Wurster, EVP, who represented UPM during the round table discussions.

Sheeting lines of the mill will be transferred to the company's paper mill in Plattling, Germany, to complement UPM's product portfolio. "UPM sees the coated mechanical sheets as solid business, and is committed to serve customers after the Albbruck closure smoothly and promptly," Ovaska explained. Approximately 30 new positions will be created through this measure and applications from Albbruck specialists will be prioritized.

UPM said that it will participate in following-up from the round table discussions about the possible future use of the mill premises. The discussions will be led by the local Chamber of Commerce. "The aim of this forum is to find development ideas and business opportunities for the site. We have already been contacted by companies that are potentially interested in the industrial use of the mill premises," Wurster said.

The Albbruck decision finalizes the paper capacity closure plans that were announced by UPM last August. UPM Albbruck paper mill had a capacity to produce 320,000 metric tpy of magazine papers. The UPM Myllykoski paper mill in Finland, with 600,000 metric tpy of magazine paper capacity, was closed on December 9, and No. 3 paper machine at UPM Ettringen paper mill in Germany, with 110,000 metric tpy of newsprint capacity, was closed on December 14.

Sale of the Stracel paper mill in France is ongoing as planned, UPM added.

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Zhanjiang Chenming Pulp & Paper Co., China, has brought its new Metso (Finland)-supplied PM 1 fine paper production line on-stream at the its greenfield pulp and paper mill in Zhanjiang City, Guangdong Province, China. The 11.15-m-wide PM 1 has an annual dimensional production capacity of close to 600,000 metric tons of woodfree uncoated printing paper within the basis weight range of 45 to 120 gsm. The design speed is 2,000 m/min.

Metso's delivery included a complete OptiConcept paper machine from headbox to reel, a comprehensive Metso automation system package, air and chemical systems, as well as two WinDrum Pro winders.

The new paper machine includes an OptiFlo Pro headbox, an OptiFormer shoe and blade gap former, and an OptiPress two-shoe nip press. The paper machine includes a SymRun drying section with OptiDry Twin and OptiDry Horizontal impingement drying units for improved runnability and increased drying capacity. The new PM 1 also has an OptiSizer film sizer, an OptiSoft SlimLine double-soft nip calender, an OptiReel Plus reel, and an OptiCart parent reel cart.

"The new PM 1 features a lot of new technology. Right from startup, the operation of the line has met the targets. In particular, the paper quality has been good," says Mark Singler, Metso's Paper Technology manager.

Zhanjiang Chenming is part of Shandong Chenming Paper Holdings Ltd., one of the biggest paper producers in China. In 2010, the company's paper production capacity was more than 4 million metric tpy. It had a turnover of more than EUR 2 billion and some 17,000 employees.

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Containerboard/Packaging
White top liner usage has been increasing the past 10 years to reach 12% of all containerboard consumed in Europe in 2010, from just 5% at the beginning of the last decade, according to a new report by RISI, Brussels, Belgium, titled Outlook for European White Top Containerboard Markets. While the European containerboard market has grown overall by 5 million metric tpy since 2000, there has been a continued shift from brown grades to white top liners, with increasing requirements for high quality printing on corrugated boxes and further penetration of ready shelf packaging.

In 2009, while demand in other segments plummeted, both the white top testliner and white top kraftliner segments have been growing above the rate of growth in overall containerboard, the report notes (see below).

"We believe, in general, that the white top segment provides a much better pricing prospect for containerboard producers than the brown segments and could result in better profit margins," explains Orifjon Abidov, RISI's European Paper Packaging Economist and study author. "We spell out our reasoning behind this in this research."

The report analyzes demand, supply, and trade for all consuming and producing countries of white top containerboard in both Western and Eastern Europe since 2002, and provides a five-year forecast until 2016. More information is available online.

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Knauf Danogips, Germany, owner of the Inlands gypsum wallboard facing mill in Lilla Edet, northeast of Gothenburg, Sweden, reportedly is preparing to cease production at the mill and close it down permanently. Some 80 jobs are at risk.

The mill has been unprofitable during the past several years, and according to a company spokesman, the owner does not see any possibilities for improved profitability and continued production. Negotiations with employee representatives regarding the factory's future will begin January 16.

The mill, established in 1896, has been owned by Knauf since 1995.

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Papier- und Kartonfabrik Varel, Germany, reports that it has started up steam turbine 9, significantly boosting the mill's power generation efficiency. Steam turbine no. 9 has an output of 13.9 MW and substitutes/replaces power generation from steam turbines No. 1 and 2. Both of these turbines were taken out of regular operation, but are still available as reserve capacity.

Main steam to the turbine is at 480°C and 80 bars, exiting at 170°C and 6 bars. Compared with previous installations, energy efficiency has been improved by 25%, which significantly reduces specific carbon dioxide emissions.

The new turbine's weight is 25 metric tons and the generators weigh 45 metric tons. Together with the gear box and auxiliary aggregates, total weight of the unit is approximately 100 metric tons. "Integration of such a complex segment into a running power plant was a major logistical challenge, which our staff of energy division and others involved passed with great success," the company noted.

Papier- und Kartonfabrik Varel produces paper and board from 100% wastepaper and is one of the top producers of paper and board packaging in Europe.

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New Products
Stora Enso, Finland, has developed a new liner in close collaboration with producers of boxes and corrugated packaging. With a basis weight of 90 gsm, the new liner combines the softness of lightweight paper with the bulk and tear resistance of significantly higher weight paper.

LumiLiner is a white, one-side coated paper produced at the company's Uetersen mill in Germany. It features outstanding flatness, excellent smoothness, and good ink holdout, supporting vibrant graphics in corrugated board printing with offset and flexography (post-print), the company notes, adding that LumiLiner is equally suitable for pre-printing of corrugated material in both printing methods.

One of the special features of LumiLiner is its adhesion-friendly reverse side, which permits economical application of adhesive and fast drying to help speed up automated lamination processes. At the same time, this also prevents the adhesive from penetrating the material and thus supports the flatness of the final product, Stora Enso points out.

LumiLiner is available in rolls in the usual widths processed by the corrugated industry as well as in sheets. Free samples are available by contacting specialitypapers@storaenso.com.

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Energy
The University of Florida, Gainesville, Fla., USA, this past week dedicated its new Stan Mayfield Biorefinery Pilot Plant in Perry, Fla., a cooperative venture between the University of Florida's Institute of Food and Agricultural Sciences and Buckeye Technologies Inc., Memphis, Tenn. Instead of a traditional ribbon-cutting ceremony, the dedication included a front-end loader ceremoniously dumping a scoopful of pulverized sugarcane stalks, delivering the first official shipment of feedstock to the biorefinery, which will develop methods for producing fuel ethanol and other compounds from inedible plant material.

When fully operational, the biorefinery will produce up to 400 gal of fuel ethanol and 5,000 lb of organic acids for bioplastics each day. Some of the researchers' goals include testing a wide variety of feedstocks, such as crop residues and yard waste, and finding ways to save money on production costs.

Speakers at the dedication included state Commissioner of Agriculture Adam Putnam, UF President Bernie Machen, and Buckeye Technologies Inc. Chairman and CEO John Crowe. Attendees included numerous agricultural leaders and high-ranking officials from state government, UF, Buckeye and other groups involved in the project.

Also a speaker, Lonnie Ingram, a UF distinguished professor of microbiology and cell science, developed a genetically modified bacterium that will be key to the biorefinery's operations. The bacterium breaks down cellulose, a major component of plant cell walls, yielding simpler compounds used to produce fuel ethanol and bioplastics.

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People
Sappi Ltd., Johannesburg, South Africa, this week announced that Mark Thompson, its current CFO, will retire in August, and that Steve Binnie, currently CFO of Edcon (Pty) Ltd, will join Sappi as CFO-designate on July 9. He will become CFO and join the Sappi board as an executive director on September 1.

Binnie has been CFO of Edcon since 2002. Prior to joining Edcon, he was group financial manager at Investec Bank and held senior management positions at Transunion ITC and New Zealand Milk Products (SA). He is a chartered accountant and holds an MBA from Heriot-Watt University, Edinburgh, Scotland.

Sappi CEO Ralph Boettger said that "I am pleased that we have dealt with the succession of Mark Thompson as CFO in such a timely manner. Mark has done a sterling job since his appointment in 2006 as CFO and prior to that as Sappi's legal counsel. I am confident that in Steve Binnie we have found a capable and well experienced CFO who will ensure a smooth succession and contribute substantially to the realization of Sappi's growth and profitability strategy."

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Caraustar Industries Inc., Atlanta, Ga., USA, announced that Michelle W. Thornhill has joined the company as operations director of the Recovered Fiber Group, effective January 9. Thornhill came to Caraustar from SP Newsprint/SP Recycling Corp. where she most recently held the position of VP/GM of SP Recycling Corp. She also held the positions of regional controller at SP Newsprint and administrative manager/controller with RockTenn (formerly MeadWestvaco) at the Stevenson, Ala., mill.

Caraustar Industries is one of North America's largest integrated manufacturers of 100% recycled paperboard and converted paperboard products. The company serves the four principal recycled boxboard product end-use markets—tubes and cores, folding cartons, gypsum facing paper, and specialty paperboard products.

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Domsjö Fabriker, Örnsköldsvik, Sweden, reports that CEO Ola Hildingsson will retire March 1, and will be succeeded by Lars Winter of Sweden-based Holmen Paper. Winter is a Licanciate of Technology and has extensive experience gained during his various positions in the forest industry. He currently is VP of Technology and Business Development at Holmen Paper.

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TAPPI News

Leading up to the Sustainability Forum at PaperCon in April, a series of webinars are planned to help manufacturers and customers better understand key issues around sustainability. The first in this series reviews the updated FSC and SFI standards.

A Comparison of the FSC and SFI Forest Certification Standards
January 30, 11:00 am;  Facilitated by: Katie Fernholz, Dovetail Partners; Free to all TAPPI Members

The Forest Stewardship Council (FSC) and Sustainable Forestry Initiative (SFI) standards offer two approaches to forest management certification. Both programs recently updated their standards for forest certification auditing in the United States. This webinar will review the FSC and SFI standards and some of their key differences. The information from this discussion will be helpful to land managers that are audited to these standards as well as to manufacturers and customers interested in understanding the requirements behind these eco-labels.

Learn more and make plans to participate.

Additional webinars in the series:

How to deal with misleading environmental claims related to print and paper?

February 27, 2012 at 11:00am EST - Facilitated by: Phil Riebel, President and COO, Two Sides U.S., Inc.

A Global Sustainability Perspective

March 12, 2012 at 11:00am EST - Facilitated by: Avrim Lazar, FPAC

PaperCon 2012 will take place April 22-25, 2012 in New Orleans, Louisiana, and will focus on "Growing the Future"; leveraging renewable, recyclable raw materials and developing human capital to ensure value for customers, long-term sustainability for shareholders, and a future for our peers.

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Renewable Chemicals Live Comes To Washington DC

Renewable Chemicals Live Conference 2012 will be held April 2, 2012 at the Capital Hilton Hotel in Washington, DC. Co-produced by TAPPI and Biofuels Digest, this conference is colocated with the Advanced Biofuels Leadership Conference which spans from April 3 – 5, 2012.

Renewable Chemicals Live features the top leadership in renewable chemicals, plastics and bio-based materials. Featuring C-level presentations on finance, scale-up, R&D, policy and global trends.

The combination of Renewable Chemicals Live and the Advanced Biofuels Leadership Conference will provide four days of "can't miss content" - get the most for your time and money by attending both!

The Advanced Biofuels Leadership Conference, organized by Biofuels Digest, is the biggest gathering of advanced biofuels CEOs and senior leadership in North America. "Real talk, real action." ·

  • 500+ action-oriented attendees.
  • More than 40 CEOs giving presentations.
  • Including 15 of the 20 Hottest Companies in Bioenergy.

You will not want to miss the two special full-day sessions on Military & Aviation Biofuels, and the Bio-Based Investor Summit featuring "get real" interactive conversation with strategic investors, hedge funds, private equity, sovereign wealth funds, venture capital and institutional investors.

Included with Renewable Chemicals Live, a special add-on, one-day Forest Biorefinery Workshop. This course is intended for forest industry and non-forest industry professionals involved in or impacted by the emerging bio-economy, and who seek to understand better the perspective and priorities of the emerging forest industry commitment to the biorefinery. Executive management including especially strategy planners, as well as product development/technical experts in the bioenergy and renewable chemicals sectors, will be particularly interested in this course.

To learn more about the 2012 Renewable Chemicals Live conference and the Forest Biorefinery Workshop or to register, visit the event website.

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All New PaperCon Papermaking Program Focuses on Packaging Grades

The Papermaking program at PaperCon will showcase packaging grade experts plus tools and techniques to optimize mill operations. PaperCon 2012, April 22-25 in New Orleans, will bring together CEOs, mill managers, superintendents, scientists, process engineers and suppliers for the largest pulp and paper technical program in the world.

Papermaking program highlights include:

 Inside and Outside the Box: Optimizing Packaging Grades

  • Keynote Address: The Turnaround at Longview Fibre
  • Papermakers Panel Discussion
  • Optimizing Containerboard Pressing - Panel Discussion
  • Strength Additives: Lighter, Stronger, Faster
  • Mineral Oil Migration from Packaging into Food: Panel Discussion
  • Forming Innovations
  • Success Stories
  • Packaging Paper Machine Innovations

Maintaining Quality While Achieving Flexibility

  • Advances in Stock Systems Additives
  • Fluid Mechanics of Forming
  • Deposit Control
  • Advancement in Biocide Technology and Application
  • Papermaking Roundtable
  • See the detailed Papermaking Program (Adobe PDF format).

PaperCon 2012 also features program sessions focusing on management, coating and graphic arts, as well as a Sustainability Forum, the OpEx Maintenance Seminar, RPTA P-T Seminar, workshops, courses, exhibits, and is co-located with Control Systems 2012. No other event combines such a comprehensive program, exhibits - and attracts this distinguished group of industry leaders.

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The 2012 TAPPI PEERS Conference, October 14-17 in Savannah, Georgia, has announced the Call for Papers. PEERS is the perfect forum for paper industry professionals both to acquire practical operating insights and to network with industry peers in technical sessions, tutorials, round tables, new technology sessions and workshops.

Topics suggested for the 2012 technical program are as follows:

  • Fiber and Pulping
  • Mill Operations and Engineering
  • Steam and Power
  •  Recycling
  • Environmental Management and Regulation
  • Sustainability

Abstracts on other topics are welcome.

Learn more.

Authors interested in presenting a paper should upload their extended abstract to TAPPI's Speaker Management System by March 9, 2012.

Authors will be notified of acceptance by April 20, 2012 and must provide a full text manuscript by July 20, 2012.

For more information please contact Craig McKinney, TAPPI Program Manager at +1.770.209.7294

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Corrugating Defect / Remedy Manual, Sixth Edition

Edited by James T. Carbone

This manual provides a basis for common knowledge of terms, definitions, and methods of correction of corrugated operational defects. The manual illustrates and provides causes and remedies for hundreds of defects affecting corrugated boxes. The manual is divided into four parts: Corrugated Problems; Printing Problems; Die Cutting Problems; and Finishing and Manufacturers' Joint Problems. The manual is also available on a full-color, searchable CD-ROM. 1999. 210 pages, soft cover. Corrugating Defect / Remedy Manual, Sixth Edition

View the Table of Contents

Product code: 0101R153
ISBN: 0898525152
Author: Carbone, J.T.
Format: Soft cover
Pages: 210

Member Price: $87.00

Non-Member Price: $130.00

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TAPPI Member Malcom Taylor Celebrates his 100th Birthday

Malcolm Taylor, a resident of University Village, was honored Jan. 7th at his 100th Birthday party! Mr. Taylor graduated from the University of Louisville in 1933, with a bachelor's of science degree in chemical engineering. That same year he married Ellabell Robertson, also of Louisville. They were married for almost 76 years, until her passing in 2008.

After receiving his doctorate in chemical engineering from Yale University, Taylor went to work in the paper industry, retiring in 1974.

He was active in professional organizations, especially TAPPI, where he has been a member since 1942 and counting!

Happy 100th Birthday Mr. Taylor from your friends at TAPPI!

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Ken Patrick Ramesh Gupta Larry N. Montague
Editorial Director International Editor President and CEO
770-209-7340 bsc_rcg@hotmail.com lmontague@tappi.org
kpatrick@tappi.org    
30 years' experience writing for the pulp,    
paper, packaging, and allied industries    
     
Karen Roman
Maria Luisa Valencia Eric Fletty
Production/Distribution Editor International Editor Vice President, Operations
770-209-7416 mlvalencia@une.net.co efletty@tappi.org
kroman@tappi.org    
     
  Shane Holt  
  Integrated Media Director, Naylor, LLC  
  352-333-3345  
  sholt@naylor.com  

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