Voith Paper

Over the Wire

TAPPI

Weekly Spotlight
From upgrading facilities to buying technology, industrial companies are confidently investing in their businesses to build upon a period of sustained growth, according to results of the newest Industry Market Barometer (IMB) study by ThomasNet, New York, N.Y., USA. Nearly half (45%) of the companies responding report growth over the last six months of 2010, and 88% of those are confident in their future expansion.

The new IMB survey reveals a set of specific strategies that fueled this growth, from customer retention efforts to movement into new markets and product development. Bolstered by the results of these strategies, respondents are investing more in their companies and recruiting talent in anticipation of increased customer demand.

Nearly 3,400 professionals participated in the latest IMB, a survey of buyers and sellers of industrial products and services, most of whom represent small and midsize businesses. The research looks at their performance, outlook, and strategies for success. Respondents include business owners and managers, sales and marketing executives, engineers, and purchasing agents from manufacturers, distributors, and service companies in North America.

The top challenge (cited by 68% of respondents) is customers cutting back or going out of business, and they are addressing it by focusing on customer retention and service. Domestic competition is another challenge that respondents are tackling by competing more aggressively in core markets, and pursuing business in new industries and U.S. geographies.

The top respondent priorities include increasing production capacity, adding new lines of products and services, upgrading facilities, and managing costs. Their investments map to these strategies. For example, most are spending on technology, such as software, for areas such as cost management. To ratchet up production capacity or develop more products/services, they are investing in capital equipment.

The companies surveyed are also hiring in anticipation of growth; 37% plan to hire through the first half of 2011. The most common job openings align with their priorities and include skilled trade workers (43%), line workers (36%), and engineering professionals (35%), in addition to customer service and sales/marketing staff.

Full results of the latest IMB are available online.

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Consumption of personal care products has a strong correlation with income level, according to a new report by SCA, Stockholm Sweden. The report pictures a pyramid with toilet paper on the bottom and incontinence products at the top. More and more countries, it says, are now climbing up the personal care pyramid.

Countries whose citizens are raising their quality of life and rapidly climbing the pyramid include Brazil, Colombia, Turkey, Saudi Arabia, Russia, Mexico, Malaysia, South Africa, Chile, India, and China. When people have income of even two U.S. dollars a day, they start using their money for more than food and housing—for personal care products in particular.

"There is a very strong correlation between GDP per capita and consumption of personal care products, and all of these countries are experiencing strong growth right now," says Ian Bell, head of home care, tissue, and hygiene research at Euromonitor International, London, U.K.

A study by the Japanese personal care company Unicharm, the report notes, found that purchases of feminine care products rise sharply when GDP per capita exceeds $1,000. As the level reaches $3,000, people also begin to buy diapers and wet wipes, and at $8,000 – $10,000, demand for incontinence products rises.

"There is, of course, considerable variation within countries," Bell says. "Many high-growth and developing countries have relatively high use of personal care products in cities, whereas use in rural areas is almost nonexistent. That's the case in China, for instance, where many personal care products are generally available in Shanghai and eastern China but not at all in the interior of the country."

A great many people in the world deal with daily budgets and have to shop for everything they need that day, every day. The main reason for this is that their incomes don't cover anything beyond their daily bread. There is a major difference between earning a dollar a day and 10 dollars a day.

"With just one dollar, people have to put all of their money towards food and housing costs," says Victor Niembro, SCA's category portfolio director feminine care, Americas, MEA & Asia.

"But as soon as they make two dollars a day, there's something left over that can be used for entertainment and consumer goods. If you make 10 dollars, that portion is fairly large. And priority is often given to hygiene products rather early on," Niembro adds.

In high-growth and developing countries, products are often sold in smaller packages, the SCA report continues. In Asia and in Latin America, the company sells diapers in small packages. More than half of sales are to consumers in "mom-and-pop" stores, local service outlets with behind-the-counter sales.

Another project also sells feminine care products in single packs in Peru and three-packs in Nicaragua. Many people can't afford diapers every day but buy them for use at night or at a wedding, party, or other festive occasion when they want to be sure to avoid leaks. The same is true for feminine care. In the past, small corner shops often sold sanitary products one at a time, opening the packages and selling the items over the counter, but nowadays feminine care products are sold in small packages.

Consumers with low incomes also look for products that can be used for multiple purposes. "One example is when packaging can be reused as a container or for storage afterwards," Niembro explains. "It's easy to draw the conclusion that people with the lowest incomes would choose low-priced products and the chain stores' own brands, but that's not the case at all," he says. "If they're going to put their money into personal care products, they want to be able to rely on the quality. So most people choose the best-known brands."

The full report is available online.

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Renewable energy policy in Europe will generate an increase in lignocellulosic biomass demand of 44% between 2010 and 2020, according to a new report by RISI, Brussels, Belgium. The European Biomass Review, which covers the EU27 countries combined with Norway and Switzerland, reports that the increased use of biomass will be driven principally from the energy sector, but also from the industrial and residential sectors.

The key to the future development of European biomass markets resides in the region's supply potential and how well it can mobilize new sources of supply, such as forest residues, agricultural residues, and energy crops, the report notes. Three scenarios for the mobilization of new supply sources by 2020 are included for each region, and a cost-curve analysis for each region and each scenario illustrates the implications for biomass pricing and imports.

While technologies such as wind, solar, and geothermal are developing rapidly, lignocellulosic biomass is currently the largest renewable energy source (RES) and remains attractive due to its relative abundance and reliable supply, according to the study.

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John D. Williams, president and CEO of Domtar Corp. in Canada, will be the featured speaker at the Paper Industry International Hall of Fame's 17th annual induction ceremony on October 6. The event will be held at the Radisson Paper Valley Hotel in Appleton, Wis. USA. The induction ceremony and dinner begins at 6:30 p.m.

Williams has more than 30 years of experience in both the consumer products and packaging industry. He began his career in consumer product sales in 1976, gaining insight into key market dynamics in the U.K. and the U.S. In 1988, he became European managing director of Sweetheart International, a major food packaging and food service business. In 1992, the company was acquired by the Finnish conglomerate, Huhtamaki. Williams was appointed CEO and group president of the packaging business (Polarcup), one of the company's core divisions.

Williams' experience in the packaging sector continued to grow at Rexam, the world's second largest consumer packaging group. There, he held a number of senior management roles in specialty food packaging from 1996 to 2000. His professional journey then took him to SCA Packaging, a business group of the global consumer goods and paper giant, SCA. As president of SCA Packaging Europe from 2005 to 2008, Williams helped transform the company from an undifferentiated manufacturer into a market-driven, customer-oriented packaging solutions provider.

A member of the board of directors of FPInnovations and chairman of the board of the Montreal Chamber Orchestra, Williams is also a director of the American Forest & Paper Association and a member of the Canadian Council of Chief Executives. In 2010, he was named North American CEO of the Year as well as Global CEO of the Year by RISI.

The 2011 induction class includes inductees from Germany, Finland, and the U.S., reports Kathleen Lhost, executive director of The Paper Industry International Hall of Fame, which recognizes individuals who pioneered and/or helped the world's paper and allied industries flourish. Located within the Paper Discovery Center, an interactive museum in Appleton that celebrates All Things Paper-the Wonder and the Legacy, the hall of fame currently has 100 members.

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The TAPPI Tissue Properties & Manufacturing Course, to be held on August 10 - 11, 2011, at TAPPI's headquarters in Norcross, Ga., USA, delivers a comprehensive and structured overview of tissue manufacturing processes, and their effects on product performance for those operations and administrative personnel that are new to the industry or process of tissue production.

"The course is specifically designed to increase the ability of attendees to improve manufacturing operations and produce a more competitive product," says Michael J. Kocurek, PhD, Professor Emeritus at North Carolina State University, who chairs this course.

Kocurek adds that "we have put together a ‘top notch' team of instructors to make sure that attendees receive a well-rounded overview of the processes." The team of instructors for this course will include Lucyna M. Pawlowska, tissue process application specialist, Kemira North America; Peter E. McCabe, tissue business leader, AstenJohnson; and Roger Banks, tissue press felt section presenter, AstenJohnson.

Kocurek has taught this course for a number of years with TAPPI and has also taught this curriculum to operators at multiple mills and corporations. Course topics will cover:

  • Tissue properties and tests and how these relate to sheet structure
  • Performance effects of fiber raw materials, pulp mill, and recycling operations
  • Stock prep refining for tissue
  • Chemicals for tissue
  • Tissue machine wet end operations and effects on sheet structure and properties, including multilayer headboxes, formation, fiber orientation, dewatering, and fabrics for sheet forming and sheet structure
  • TAD and yankee drying and effects on properties Wet felts for obtaining desired sheet structure
  • Creping
  • Calendering.

More Information about this course, including registration, is available on the course webpage.

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At ZELLCHEMING-Expo 2011, in Wiesbaden, Germany, June 28-30, a total of 236 exhibitors from 19 countries presented their products and services in more than 7,800 sq. meters of exhibition floor space. Expo organizers note that due to the ongoing difficult economic situation in some areas of the industry, a moderate decline of around 6% was posted both in attendance by exhibitors and in floor space booked. With a share of 36%, it was possible to match the previous year's level of foreign visitors.

Altogether, 2,715 professionals visited the event over the three days. This represents a drop of about 14% compared with 2010. The share of foreign visitors continues to remain steady at more than 24%.

Once again, current issues and topics concerning future perspectives were addressed in the lectures and intense discussions. The traditional ZELLCHEMING summer evening function as well as the VDMA evening and the Finnish reception rounded out the event.

After careful consideration, the ZELLCHEMING e.V. association says it has decided to continue holding the ZELLCHEMING-Expo annually in conjunction with the annual general meeting of the association. The biggest annual event in the pulp and paper industry in Europe, ZELLCHEMING-Expo will take place again next year in Wiesbaden on June 26 - 28.

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The U.S. Department of Energy (DOE), Washington, D.C., USA, has announced a series of new manufacturing job training partnerships using DOE's National Training and Education Resource (NTER). DOE will be partnering with the Manufacturing Institute, the Ford Partnership for Advanced Studies, and Macomb Community College outside of Detroit, Mich. The program will provide students with highly interactive and engaging materials in a variety of science, technology, engineering, and math areas, as well as virtual technician training. Partners can access resources available through NTER, an open-source, Web-based, interactive learning environment.

NTER is an integration platform that brings together information technologies to support education, training, and workforce development. By providing a central access point for educational resources, the tool will help lower the costs and reduce the time it takes to develop, share, customize, and update online learning materials. It also allows instructors to create interactive 3-D scenarios and virtual environments for training that can be customized for a particular lesson or skill. It is currently being used to deliver energy efficiency training.

DOE will provide information technology tools and technical support to each of the organizations, which will allow them to upgrade their existing curricula and create new immersive learning experiences. The partner organizations will leverage the NTER platform in a variety of ways. For example, the Manufacturing Institute will use NTER as a cutting-edge vehicle to earn manufacturing credentials that are accepted across state lines. The Ford Partnership for Advanced Studies is also exploring opportunities to integrate NTER into its programs nationwide. And on campus, Macomb Community College will use NTER to enhance several of its electric vehicle-oriented courses.

More information is available online.

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Market Roundup
Pulp mills in the Western U.S. have seen their wood costs go up for four consecutive quarters, according to the North American Wood Fiber Review (NAWFR), Seattle, Wash., USA. Together with Quebec, Canada, this region had the highest second quarter wood fiber costs in North America.

Douglas-fir and hemlock residual chip prices in the U.S. Northwest were up 42% between the second quarter of last year and the second quarter of this year, reaching their highest levels since early 2008, NAWFR reports. Pulp log prices have increased more than for wood chips, reaching a 16-year high in the second quarter of this year. Historically, the region's pulp industry has relied on 70% - 80% sawmill residuals for its fiber furnish, but in 2011, softwood residuals accounted for approximately 55% of the softwood fiber receipts as reported by the Forest Products Association, with the remaining being chips manufactured from roundwood.

The current price surge in the Western U.S. has been the result of four primary factors: sawmill lumber production well below historical volumes, high pulp mill production due to strong product prices, a reopened pulp mill in the state of Washington, and strong Chinese demand for logs, NAWFR notes.

Violent storms in Mississippi and Alabama, flooding along the Mississippi River, and wildfires primarily in Georgia and Texas interrupted the regular flow of wood fiber in the U.S. South during the second quarter. These extreme conditions resulted in curtailments of a few pulp mills and chipping facilities and temporary reductions in fiber demand.

To some extent, this balanced out the reduction in pulpwood production, NAWFR adds. While salvaging is difficult and more costly than ordinary timber harvesting, the sheer volume of wood that is under pressure to be brought in before it deteriorates will bring a surge of supply to the market.

Softwood and hardwood pulpwood prices in the second quarter were unchanged from the previous quarter, according to NAWFR, but can be expected to decline in the third quarter as a result of the large volume of damaged wood in the region. With other North American regions experiencing significant increases in wood costs in the second quarter, the South's low, stable wood prices continue to make the region's pulp industry very competitive, NAWFR points out.

More information is available online.

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European demand for newsprint improved by 3.6% (28,000 metric tons) in May compared with a year earlier, according to the Association of European Publication Paper Producers, CEPIPRINT, Brussels, Belgium. Domestic shipments increased 4.9% (37,000 metric tons), but exports of newsprint fell 17.3% (25,000 metric tons) mainly due to a sharp contraction in deliveries to the Far East.

In the SC-magazine paper sector last month, European demand dipped 1.4% (4,000 metric tons) year-on-year. However, exports of the grade grew 24.4% (14,000 metric tons) during the same period with the largest increases going to North America and Oceania. The rise in exports took total European shipments to 361,000 metric tons, up 2.9% over the previous report. Coated Mechanical Reels (CMR) was the only European publication paper sector to post positive results across the board last month. European demand for CMR edged up 2.8% (14,000 metric tons), while shipments overseas climbed 9.3% (13,000 metric tons). The rise in domestic shipments combined with growth in exports took total European shipments of the grade to 545,000 metric tons.

European demand for uncoated mechanical grades recorded just 0.9% change year-on-year in May. In the overseas markets, shipments to the Far East grew year-on-year, but all other export regions showed a decline. The flat level of domestic shipments combined with a 10.0% (5,000 metric ton) drop in exports resulted in total European shipments of the grade sliding 1.4% (3,000 metric tons) against last May.

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According to Mark Wilde, senior analyst with Deutsche Bank, Chinese pulp prices are easing. Russia's Ilim cut NBSK (northern bleached softwood kraft) prices in China by $70/metric ton and NBHK (northern bleached hardwood kraft) by $20/metric ton. Chile's Aruaco also has reportedly reduced prices in China, Wilde notes. "We've also received reports of more ‘spot' deals in the U.S.," he adds.

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Pulp & Paper
Guangdong Huatai Paper Co., Jiangmen City, Guangdong Province in China, has successfully started up the Metso (Finland)-relocated PM 1 newsprint machine. The 5.56-m-wide (trim) PM 1 has an annual dimensional production capacity of close to 200,000 metric tons of newsprint within the basis weight range of 42 - 48 gsm. The paper machine design speed is 1,800 m/min.

Metso's delivery package included engineering and supervision services for dismantling, packing, installation, and startup of the relocated paper machine line. The delivery also included a new two-loop deinking line with reject handling that will provide the stock for the paper machine. The line has a drum pulper with improved mechanical construction and main drive design together with Metso's new linear cell flotation technology for main and post flotation.

Reconditioning, rebuilding and eventual relocating of entire production lines is part of Metso's service offering for paper machines. It combines machine rebuilding business, project management and automation solutions.

Huatai Group produces newsprint, uncoated fine paper, coated art paper and tissue with an annual capacity exceeding 3.0 million metric tons. Guangdong Huatai Paper Co. Ltd. is a member of the Huatai Group.

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Ilim Group, St Petersburg, Russia, reports that it currently is completing the second stage of the Rebuild of Facilities for Preparation, Storage, and Feeding Wood and Bark Waste for Incineration project launched last year. Total cost of the work under the project exceeds RUR 310 million.

The main purpose of the project is to increase the mill's power generation capacity through incineration of bark waste in bark boilers that will yield additional steam and electric power at the mill. This will facilitate the reduction of third-party energy consumption.

Bark waste supply was planned using a state-of-the-art conveyor system. Some 600 m of belt conveyor was started up during the first stage in late 2010. The conveyor was extended by another 540 m last month. The second stage of the project also includes installation of five belt conveyors feeding bark and sawdust to the bark boilers for incineration. This line will ultimately be connected to the conveyor installed at the first stage.

Project completion late this year will facilitate annual power savings of up to RUR 50 million to significantly reduce finished product cost.

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International Paper Co., Memphis, Tenn., USA, this week announced that it is commencing a fully financed tender offer for all outstanding common shares of Temple-Inland Inc. for $30.60 per share in cash. The all-cash offer represents a 46% premium to Temple-Inland's closing price on June 6, the last trading day prior to public disclosure of IP's proposal to acquire Temple-Inland. The offer will commence tomorrow and will expire at 5:00 p.m. New York City time on August 9, unless extended.

IP chairman and CEO John Faraci said that "we believe Temple-Inland's price expectations are unrealistic and their unwillingness to engage in any meaningful discussions with respect to value has left us with no alternative but to make our offer directly to Temple-Inland shareholders. While we prefer to reach a negotiated, friendly deal, we are committed to remaining disciplined and completing this transaction at a fair price for both companies' shareholders. We are confident in our ability to secure the necessary regulatory approvals to complete this transaction in a timely manner."

Faraci added that "we respect Temple-Inland, but we disagree on the realistic standalone value of the company, which we believe is currently $21 to $24 per share. The premium we are offering is substantial, the multiple is well above recent directly comparable transactions, and we are providing Temple-Inland shareholders the certainty of cash in the midst of a very uncertain economic environment. At $30.60, we believe our offer fully reflects the future business plans and economic outlook for Temple-Inland and for the sector, including the current environment and outlook for containerboard, the potential cyclical improvement in Temple-Inland's building products segment and near-term expected increases in Temple-Inland's earnings. We are confident that Temple-Inland shareholders support a transaction, and it is now incumbent upon the Temple-Inland Board to take the next step."

International Paper noted that its fully financed, all-cash offer represents compelling value when compared against all reasonable metrics and precedents, including:

  • A 46% premium to Temple-Inland's closing price of $21.01 on June 6, the last trading day prior to public disclosure of the offer
  • A 30% premium over the present value of average analyst price targets for a standalone Temple-Inland of $23.57
  • A highly attractive multiple of 9.8x Temple-Inland's 2011 estimated EBITDA (9.0x excluding timber tax liability) versus forward EBITDA multiples of recent precedent transactions of 6.1x for Smurfit-Stone and 6.3x for Weyerhaeuser's corrugated packaging business, and well above Temple-Inland's average forward EBITDA multiple of 6.1x since 2008
  • The fact that IBES research estimates for Temple-Inland's EBITDA have come down since IP's proposal was made public, given market expectations
  • A significant premium to Temple-Inland's standalone value which, based on pre-offer trading and independent analyst estimates of Temple-Inland's earnings potential, IP and third parties credibly estimate at $21 to $24 per share. This compares with Temple-Inland's contention that standalone value should reflect multiple expansion to near 7x applied to an above-average estimated EBITDA for 2012 – a view we believe neither investors nor third parties share
  • Realization of the benefits from a potential cyclical improvement in Temple-Inland's building products segment, even with a recovery uncertain and likely years away
  • The benefits of more than half of the synergies that are expected to result from the combination
  • The certainty of cash, versus the uncertainty of any potential future benefits to shareholders that Temple-Inland's current business plan may, or may not, deliver through cyclical and operational improvement.

International Paper has secured committed financing from UBS Investment Bank, and the offer will not be conditioned on financing.

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Temple-Inland Inc., Austin, Texas, USA, acknowledged this week that International Paper Co. has commenced an unsolicited offer to acquire all of the outstanding shares of common stock of Temple-Inland for a price of $30.60 per Temple-Inland share in cash (see article above). Consistent with its fiduciary duties and as required by applicable law, Temple-Inland says its board of directors will review the offer to determine the course of action that it believes is in the best interests of the company and its stockholders. Temple-Inland's stockholders are advised to take no action at this time pending conclusion of the review of the tender offer by Temple-Inland's Board of Directors.

Temple-Inland adds that its board, in consultation with its independent financial and legal advisors, intends to advise stockholders of its formal position regarding the announced offer within 10 business days from the date of commencement of the unsolicited tender offer by making available to stockholders and filing with the U.S. Securities and Exchange Commission (the SEC) a Solicitation/Recommendation Statement on Schedule 14D-9.

Temple-Inland Inc. is a producer of corrugated packaging and building products. The company's fully integrated corrugated packaging operation consists of 7 mills and 58 converting facilities.

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M-real Corp., Finland, has suspended negotiations to divest its Premium Papers business to a sister company of German Papierwerke Lenk AG. M-real, part of Metsäliitto Group, announced in April the Memorandum of Understanding regarding divestment of the Germany based Reflex mill's Premium Papers business to a sister company of Papierwerke Lenk AG. Consequently M-real expected to book a negative EUR 12 million non-recurring item in the Specialty Papers business area. The transaction was expected to be closed during the second quarter this year.

The parties say they will evaluate possibilities to continue negotiations later and M-real will also consider other options to divest its Premium Papers business. The EUR 12 million negative non-recurring item will not be booked in M-real's second quarter 2011 result.

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SP Newsprint Co., Greenwich, Conn., USA, this week announced that it has inked a forbearance agreement with its lenders to avoid foreclosure. According to the agreement, SP will be provided with additional liquidity and its lenders will forebear from exercising any rights or remedies that might otherwise have been available to them. During the forbearance period, SP, its lenders, and advisors will work to develop and implement a business plan for SP that will ensure its viability on a long-term basis.

SP Newsprint's Dublin, Ga., mill produces some 540,000 metric tpy of newsprint. The company also has a mill in Newberg, Ore., and runs 22 recycling facilities through its SP Recycling Corp. unit.

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Jussi Pesonen, CEO of UPM, Finland, and the ambassador of Finland to the U.K., this week officially opened the £17 million Materials Recovery Facility (MRF) at UPM's Shotton paper mill in the U.K. The state-of-the-art facility, supported by a £1.7 million investment by the Welsh Government, has the capacity to sort 270,000 metric tpy of comingled material and has been designed to achieve the highest recovery rates in the U.K. of 99%. In addition to a unique design, the facility has the latest sorting and screening equipment in the market.

The UPM MRF will output high quality materials for further reprocessing off site. Some 120,000 metric tons of high quality paper will be recovered for papermaking at the North Wales site.

Speaking at the inauguration of the facility, Pesonen said that "the MRF clearly demonstrates how integrated manufacturing can work. We are working hard to maximize reuse and minimize waste. The UPM Shotton site is a clear example of our Biofore vision and strategy in action." Currently, 90% of UPM's production waste is reused or recycled.

Pekka Huhtaniemi, Finnish Ambassador to the U.K., said that "UPM has created a fantastic facility here on their Shotton site. Not only is the technology impressive but also the motivated workforce. In addition to their renewable energy power plant, UPM Shotton is a good example of Cleantech thinking."

The facility was opened in front of 180 key suppliers and partners at a short opening ceremony. It is capable of sorting six types of plastic as well as metals, paper, and glass. The building is rated BREEAM excellent using abundant levels of natural light and recycled water.

At full operation, the facility will employ 160 people in addition to the 405 staff working for UPM Shotton site which produces 100% recycled fiber newsprint. UPM is the largest manufacturer of 100% recycled newsprint in the UK, recycling 640,000metric tpy.

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Hainan PM 2, the largest paper machine in the world, is now running with Voith Paper's CarboTec rolls. The CarboRun CS rolls, included in the scope of supply, are used for the so-called Center Supported Rolls (CSR) and have a positive influence on the fabric performance, Voith notes. PM 2, located on Hainan Island in the South China Sea, produces high-quality multicoated fine paper.

Voith CarboTec rolls are made of carbon fiber reinforced plastic, known as CFRP. The carbon fiber material in this application can exploit its benefits—low weight, low energy consumption, and low vibration tendency, leading to high stability and no susceptibility to corrosion. CFRP rolls were developed to guarantee optimal reliability and excellent vibration resistance. In general, CFRP shows its full potential on fast machines as vibration is minimized. Compared with steel rolls, CF rolls are 40% lighter, reducing loads on the framing, which in turn, has a positive effect on the vibration level.

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The European Commission this week unconditionally approved UPM-Kymmene Oyj's (Helsinki, Finland) acquisition of Finland-based Myllykoski Corp. and Rhein Papier GmbH (Myllykoski), Germany. UPM thus has obtained all required regulatory clearances for the transaction. The target for the final closing of the transaction is in late July - early August. The companies announced the transaction this past December 21.

"We are extremely pleased with the Commission's positive decision. The regulatory process proceeded as planned and the authorities thoroughly investigated the effects of the transaction on the markets. The approval of the transaction means that the European paper industry has better prerequisites to be competitive in the rapidly evolving world of media and against global industry players," saids Jussi Pesonen, UPM's president and CEO.

The transaction includes Myllykoski's seven publication paper mills in Germany, Finland, and the U.S. The total annual paper production capacity is 2.8 million metric tons. The transaction also includes Myllykoski Corp.'s 0.8 % ownership of the Finnish energy company Pohjolan Voima Oy. The approximate enterprise value of all businesses acquired is EUR 900 million.

Providing closing takes place before August 3, UPM will publish proforma financial information on the transaction in connection with its interim review.

Myllykoski, a family-owned international paper group, is one of the largest publication paper producers in the world. The company produces uncoated and coated publication papers, including newsprint. Myllykoski and Rhein Papier operate altogether seven paper mills in total with an annual paper production capacity of 2.8 million metric tons. The mills are located in Albbruck, Ettringen, Hûrth, and Plattling (two mills) in Germany, in Kouvola, Finland, and in Madison, Wis., USA. Myllykoski employs approximately 2,500 people, of which 1,900 are based in Germany.

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Containerboard/Packaging
RockTenn, Norcross, Ga., USA, has filed a counterclaim in the pending Smurfit-Stone shareholder class action lawsuit. As previously reported, there is a class action lawsuit against Rock-Tenn Co., RockTenn CP, LLC (a wholly owned subsidiary of RockTenn that is the successor to Smurfit-Stone Container Corp.), and former directors of Smurfit-Stone pending in the Delaware Court of Chancery, challenging the recently completed acquisition by RockTenn of Smurfit-Stone.

The lawsuit includes claims that the proxy statement provided to Smurfit-Stone shareholders in connection with the transaction contained misleading or inadequate disclosures regarding the merger. Plaintiffs sought damages and a preliminary injunction to enjoin the shareholder vote to approve and adopt the merger agreement. This past May 20, the court denied the plaintiffs' motion for preliminary injunction. On May 27, Smurfit-Stone's shareholders voted to approve the transaction, and the merger was consummated later that day.

In the counterclaim filed this past week, RockTenn notified the court of an error in the proxy statement provided to Smurfit-Stone shareholders in connection with the transaction. The error was the attachment and summary of an outdated version of the Delaware appraisal statute, rather than the current version. RockTenn requested that the court order that plaintiffs are not entitled to any damages or the imposition of any other remedy with respect to this error.

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Sonoco, Hartsville, S.C., USA, reports that its wholly owned subsidiary, Sonoco UK Ltd., has completed acquiring the assets of Robinson Paperboard Packaging (RPP), Chesterfield, U.K., a division of Robinson PLC. With origins dating back to 1839, RPP produces rigid paperboard tubes and boxes for the food, drink, toiletries, cosmetics, and the gift/presentation markets.

The acquisition will add approximately $10 million in annual sales and includes customer contracts, as well as other business assets of Robinson Paperboard Packaging. As part of the transaction, Sonoco will assume operation of Robinson's Chesterfield paperboard can plant located on Goyt Side Road in Chesterfield. Employees at the plant will be retained.

The Chesterfield plant is ISO 14001 environmentally accredited, and also has British Retail Consortium/IoP Food Hygiene and ISO 9001 accreditation. Sonoco will continue to work with other parts of Robinson, including its plastics packaging division for the supply of plastic overcaps.

"The purchase of Robinson Paperboard Packaging is a good strategic fit with Sonoco's growing global rigid paper container operations," said Sean Cairns, GM of Sonoco Rigid Paper and Closures, Europe. "We believe Robinson's proven expertise in innovative paper bottom technology and unique, patented processes provide a strong platform for our continued development and growth in the U.K. and Europe.

"This agreement is a win for Robinson, Sonoco, and our packaging customers, who are increasingly recognizing the proven advantages that rigid paper containers bring in terms of reducing costs and minimizing the impact on the environment – without compromising quality. Packaging made from rigid paper reduces package weight, makes more efficient use of raw materials, and conserves energy," Cairns added.

Sonoco has been operating in the U.K. since 1923 and now has more than 600 employees engaged in consumer and industrial packaging operations at 10 locations. It operates 44 facilities throughout 15 European countries with annualized sales of more than $700 million and more than 5,000 employees. The company is the world's largest manufacturer of rigid paperboard containers, producing a variety of round and shaped spiral-wound, recycled paperboard cans, fiber cartridges, and single-wrap paperboard containers, serving a variety of food and non-food markets. Sonoco's rigid paperboard operations include operations in North America, South America, Europe, Asia, and Australia.

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Uni Core Holdings Corp. (UCHC), Shenzhen, China, announced this week that Suzhou Eastern Sunrise Paper Products Co. of the APT Paper Group (APT), a wholly-owned company of UCHC, has replaced its traditional packaging technology with honeycomb paper technology, and becomes the overall product packaging supplier for ASUS, Inventec, and BenQ. Focusing on electronic components and the packaging vulnerability of computer products, Suzhou Eastern Sunrise developed a honeycomb based approach to computer packaging.

Suzhou Eastern Sunrise uses recycled honeycomb cardboard as the main material that is designated as exempt, environmentally-friendly packaging material in many countries. The price of the finished product is lower than plastic and wooden products of the same requirements, and the lighter, simpler packaging avoids assembly problems typical with wood and iron packaging.

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New Products
Mohawk, Cohoes, N.Y., USA, is now stocking its Superfine envelopes in a wider range of sizes. Twelve popular baronial and square envelope SKUs have been added to the Mohawk Superfine Ultrawhite 80 text offering.

The new offering is FSC certified and manufactured with wind power. Additional sizes and colors can be ordered as part of Mohawk's 3 - 10-day quick-turn program. Envelopes are available in 24 writing, 70 text, and 80 text, with smooth and eggshell finishes and white, softwhite, and ultrawhite shades, commercial, announcement (A-style), baronial, booklet, square, and foil-lined styles.

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Published Pricing
Nippon Paper Industries Co., Japan, this week announced that it will raise prices for printing paper and communication paper to all of its agencies. The increase will be a minimum of 10%, effective with September 1 shipments.

The company attributes the increase to a new, upward trend in the price of raw materials and fuels, adding that it has made sustained efforts to reduce costs. However, it has been difficult to absorb all of the cost increases through the company's own efforts, and thus it has decided that there was no alternative but to pass a portion of the cost on to the product price.

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Energy
Sundrop Fuels Inc., Louisville, Colo., USA, a gasification-based drop-in biofuels company, and Chesapeake NG Ventures Corp. (CNGV), a wholly owned subsidiary of Chesapeake Energy Corp., this week announced that they have closed a transaction in which CNGV will invest $155 million, enabling Sundrop Fuels to expand operations and begin construction of a commercial demonstration facility to produce biobased "green gasoline" made from cellulosic material. Additionally, Sundrop Fuels announced that Oak Investment Partners, a current investor, has committed to invest $20 million pro rata with CNGV. The deal closed on July 11.

Sundrop Fuels uses an ultrahigh-temperature heat transfer process to gasify virtually any cellulosic feedstock into synthesis gas, which is then converted into clean, affordable biobased "green gasoline" and other drop-in transportation biofuels for use in today's automobiles, diesel engines, and aircraft via the nation's existing fuels distribution infrastructure. At the core of Sundrop Fuels' intellectual property is its RP Reactor, a high-efficiency radiant particle technology that is more than 20 times faster than conventional convection gasification methods.

In addition, Sundrop Fuels is able to maximize its synthesis gas production by integrating clean, abundant natural gas with biomass feedstock, facilitating the most efficient utilization of hydrogen from both the biomass and natural gas to produce higher yields than any other biomass process. The combination of Sundrop Fuels technology with the efficient reactor-heating and hydrogen-enrichment properties of natural gas will provide the foundation for massive-scale biorefineries that will dramatically reduce both the nation's dependence on foreign oil and the amount of greenhouse gases released into the atmosphere.

Sundrop Fuels plans to break ground in 2012 on its first commercial-scale integrated biorefinery, which will produce more than 40 million gal of transportation fuel annually, demonstrating its RP Reactor technology with ExxonMobil's Methanol-to-Gasoline (MTG) process. The company expects to launch production at its first large-scale, 200-million gal per year biorefinery in 2016.

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The U.S. Department of Energy (DOE) this past week announced the conditional commitment for a $105 million loan guarantee to support development of the first commercial-scale cellulosic ethanol plant in the U.S. Project Liberty, sponsored by POET LLC, will produce up to 25 million gal of ethanol per year and will be located in Emmetsburg, Iowa. POET estimates the project will generate approximately 200 jobs during construction and 40 permanent jobs at the plant.

Project Liberty will use corncobs, leaves, and husks as fuel sources that do not compete with feed grains. The project's process uses enzymatic hydrolysis to convert waste into ethanol, and it will produce enough biogas to power both Project Liberty and POET's adjacent grain-based ethanol plant. Project Liberty will displace more than 13.5 million gal of gasoline annually and fulfill more than 25% percent of the projected 2013 renewable fuel standard requirement for biomass-based cellulosic ethanol. POET plans to replicate its process at 27 other corn ethanol facilities, which would have a projected combined annual capacity of one billion gal per year of cellulosic ethanol.

DOE's Loan Programs Office has issued loans or loan guarantees, or offered conditional commitments, for loan guarantees totaling more than $38 billion to support 41 clean energy projects across the U.S.

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People
Billerud, Solna, Sweden, has appointed Susanne Lithander its new CFO and a member of the Senior Management Team of Billerud, effective September 1. Currently, Lithander is VP Finance at SCA where she leads a major global change project. She has experience as CEO of Mercuri International Group and several senior financial positions within Ericsson.

Billerud operates three integrated pulp and paper mills in Sweden and at one paper mill in the U.K. In Sweden, the company mills are at Grums near Karlstad, in Skärblacka near Norrköping, and in Karlsborg northeast of Luleå. The U.K. mill in located at Beetham in the Lake District, north of Manchester.

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TAPPI News

The Preventive Maintenance/Essential Care & Condition Monitoring Course will be held September 12-13, 2011, in Raleigh, NC. TAPPI will be partnering with IDCON on a series of maintenance courses such as this.

Preventive maintenance is essential to achieving improved equipment reliability. The implementation of a preventive maintenance program will enable your plant to identify and minimize equipment failures.

This training in Preventive Maintenance/Essential Care and Condition Monitoring will teach participants how to set up a cost-effective process and provide practical exercises and techniques.

You will benefit from this training if you:

Plan preventive maintenance work

  • Execute preventive maintenance tasks (operations and maintenance)
  • Manage preventive maintenance
  • Work with reliability improvements
  • Manage and/or supervise maintenance personnel
  • Work with a Computerized Maintenance Management System
  • Work as a maintenance or reliability engineer
  • Coordinate PM tasks between E/I, mechanical and operations
  • Manage Operator Essential Care and inspections

Learn More and Register!

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The Root Cause Problem Elimination Course will be held on September 14-15, 2011 in Raleigh, NC. In partnership with TAPPI, IDCON will be providing training that focuses on eradicating problems. This 2-day class will show you how to bring root cause analysis into your day-to-day reliability management process – and in a cost-effective manner.

IDCON's RCPE™ training helps participants tie cause and effect together and apply logical thought processes to arrive at the problem's core. To illustrate the process, IDCON will show participants how to map out a "How-Can Diagram."

You will benefit from this training if you:
· Need an organized practical approach to problem solving
· Work in an industrial setting

Learn More and Register

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The agenda for Specialty Papers Europe, 29 November-1 December 2011 in Frankfurt, Germany now includes two different pre-conference tours. Delegates at Specialty Papers Europe will have the opportunity to tour either the SCA Packaging Containerboard Mill or the Kelheim Fibres GmbH facility on 29 November. There are a limited number of spots available for the tours and registration to the conference is required. Learn more at www.specialtypaperconference.com.

Specialty Papers Europe confirmed speakers include: Ingo Bernt, R&D, Kelheim Fibres GmbH; Erich Kollmar, President, Bellmer GmbH; Charles P. Klass, President, Klass Associates Inc.; Rod Fisher, Founder, Fisher International; Dr. Mika Vähä-Nissi, VTT Technical Research Centre of Finland; Graham Moore, Senior Consultant - Paper, Pira International; B. Michael Dib, Managing Director, MEAC Group Holding; Ioannis Lappas, Project Engineering, Andritz; Reinhard Gather, Managing Director, PAMA Papiermaschinen GMBH; Arne Krolle, Manager Paper Coatings, BYK; Andrea Glawe, Deputy Sales Director, COATEMA COATING MACHINERY GMBH; Hannes Orelma, AALTO UNIVERSITY; and Prof. Dr. Martti Toivakka, Laboratory of Paper Coating and Converting, Center for Functional Materials, ÅBO AKADEMI UNIVERSITY.

For regular agenda updates or to register, Click Here

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Register now  to attend the TAPPI PEERS Conference (October 2-5, 2011 in Portland, Oregon) and benefit from the integration of both management and technical topics.

At PEERS, you'll gain a better understanding how of the entire mill process works together – helping you Optimize the Lean Green Machine.

Learn more about the program

With seven focused tracks and more than 30 sessions, this year's updated conference offers peer-reviewed papers, expert speakers, exclusive networking opportunities and new technologies that can help mills optimize operations.

Why Attend? You'll benefit from:

  • Unrivaled networking opportunities
  • Hearing directly from Keynote Speaker Miles P. Drake from Weyerhaeuser
  • Save time and money by also attending the International Pulp Bleaching Conference at a discount
  • Learn the latest updates on Boiler MACT rules and regulations
  • Gain knowledge from peer-reviewed technical sessions
  • See the latest products and services available to the marketplace
  • Share strategies and know-how at Hot Topic Breakfasts

See you in Portland!

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Have you registered for the 2011 TAPPI Extrusion Coating Course yet? Don't wait! You can save $200 on your TAPPI registration and on most flights with a 21-day advance booking. This course takes place August 16-18 in exciting Nashville, Tennessee.

Top Leadership Attendance
Just last year, the course attracted representatives from more than 30 different companies and based on registration so far, the course appears destined for the same broad and elite representation. You can see a list here of Companies Represented in 2010 and 2011


Another Reason to Attend
You'll receive your own copy of the Roll and Web Defect Terminology, Second Addition for attending the entire three-day program. (You must stay until the end of the course to receive your book.) This is a must-have communication tool for suppliers and their customers to assist in the identification and elimination of roll and web defects, such as those commonly found in paper, film, Nonwoven webs and wound rolls.


Book Your Hotel Special Rate for Attendees
(Sheraton Downtown Nashville)
623 Union Street
Nashville, Tennessee 37219
United States
Phone: 615-259-2000
Please call to make room reservations. Be sure to say "TAPPI" to get the special TAPPI Corporate Rate of $139.00 plus fees.

We thank you for your continued support of TAPPI's educational resources and look forward to seeing you in Nashville, Tennessee very soon!

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On June 28 and 29, 2011 Clark Atlanta University hosted a High School Summer Institute. The goal of this program is to train and promote energy science and engineering, multi-disciplinary educational and research among high school students. During the program, the students were introduced to areas of alternative and renewable energy, recycling, conservation, weatherization, enabling technologies and training. TAPPI was asked to help them to promote the pulp, paper, and packaging industries.

www.tappi.org

As always, our industry stepped up to the plate. Mr. Bill Bohn, Area Vice President, North America, Fiber business line, from Metso kindly agreed to speak to the students about the industry. Caraustar in Austell, Georgia provided a mill tour thanks to Rob Maino, General Manager of Austell Mill One & Two Veda Chandler, who coordinated the event for Clark said, "Everything worked out perfectly! The speaker did a wonderful job during the lecture, and the tour went GREAT!!! The students had no idea how the products were made, so being able to hear about the process, followed by the mill tour and actually seeing the process up close really sparked their interest."

Clark Atlanta University currently has a dual degree program with the Georgia Institute of Technology in Chemical Engineering. This program can be designated as a chemical engineering degree with a certificate in paper. For more information on this program please contact David Bell, V.P. Corporate Relations, dbell@tappi.org.

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As the leading association for the worldwide pulp, paper, packaging, and converting industries, TAPPI announces that it is still accepting applications for the William L Cullison Scholarship. Scholarship funds are currently awarded in increments up to $4,000 per academic year for the last two years of a student's undergraduate program. The deadline has been extended to August 1, 2011. All candidates will be notified of their application status by September 1, 2011.

TAPPI's selection committee has created a new, expedited process for applicants to submit their application. It recognizes that while students are seeking additional ways to cover the cost of their education, they also appreciate electronic solutions to facilitate application submission. The committee is happy to oblige and the online process is fairly straightforward.

Potential candidates must meet all of the following eligibility criteria to be considered. It is important to note that financial need is not a requirement to be eligible.

  • Major in a pulp and paper science course of study at a college or university. Many of these colleges and universities sponsor a TAPPI Student Chapter.
  • Maintain a 3.5 grade point average or better (on a 4.0 scale) through the first two years in a four-year program, or first three years in a five-year program.
  • Demonstrate outstanding leadership abilities.
  • Demonstrate significant interest in the pulp and paper industry.

Convinced that today's students are tomorrow's leaders, the TAPPI Foundation endowed the William L. Cullison Scholarship fund in honor of TAPPI's fifth Executive Director, an extraordinary industry leader. The field offers satisfying, well-paying careers in the pulp and paper, corrugated container, or polymers, laminations, adhesives, coatings and extrusion industries. Attracting skilled, motivated young people is the cornerstone to building a highly skilled workforce and a technically advanced industry. This scholarship provides a compelling incentive for students entering their third year of college to pursue an academic path related to this vital work.

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Nominations for the major TAPPI 2012 awards are due by August 1, 2011. The awards that may be presented in the upcoming year are:

  • Gunnar Nicholson Gold Medal Award - The Association's highest technical honor may be presented annually to recognize an individual or individuals for preeminent scientific and engineering achievements of proven commercial benefit to the world's pulp, paper, board, and forest products industries and the other industries that TAPPI serves.
  • Herman L. Joachim Distinguished Service Award - The Association's highest award for service, may be presented annually to recognize leadership and service which have significantly and demonstrably contributed to the advancement of the Association.
  • Paul W. Magnabosco Outstanding Local Section Member Award – The highest honor for Local Sections may be presented annually to recognize an individual for outstanding leadership and exceptional service to one or more Local Sections, which have resulted in significant and demonstrable benefits to the Local Section members.
  • TAPPI Fellow - TAPPI Fellows are Individuals who have been members of TAPPI for not less than 10 years prior to the nomination, and who have contributed meritorious service to the Association and/or the paper and related industries. Retiring members of the TAPPI Board of Directors become Fellows automatically at the end of their term.

TAPPI Awards and Honors  shows the qualifications required and links to the nomination forms that must be completed. You may submit all nomination forms by email to standards@tappi.org, or you may fax them to the attention of the awards department at +1-770-446-6947, or send by mail to TAPPI, Awards Department, 15 Technology Parkway South, Norcross, GA 30092, USA.

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Xerium Technologies, Inc.
Proceq USA, Inc
Sweed Machinery, Inc













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