PAPER INDUSTRY NEWS - SEPTEMBER 2006

This page contains pulp and paper industry news for September 2006


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NEWS SEPTEMBER 2006

International Paper Completes Sale of Brazilian Coated Papers Business to Stora Enso

Sept. 01, 2006 MEMPHIS, Tenn., Sept. 1 /PRNewswire-FirstCall/ -- International Paper (NYSE: IP) has completed the previously announced sale of its Brazilian coated papers business to Stora Enso Oyj for approximately $420 million, subject to certain post-closing adjustments. The business includes a coated paper mill and lumber mill in Arapoti, Parana State, Brazil, as well as 50,000 hectares (approximately 124,000 acres) of forestland in Parana (These assets were formerly owned by Inpacel -- Industria de Papel Arapoti Ltda. and Inpacel Agroflorestal Ltda., subsidiaries of International Paper.).

(Logo: http://www.newscom.com/cgi-bin/prnh/20020701/IPLOGO  )

The Brazilian coated papers business had sales of approximately $230 million in 2005. It produces approximately 200,000 metric tonnes of coated paper for catalog, magazine and retail insert markets, and approximately 83 million board feet of lumber each year. Included among the 50,000 hectares of forestlands are 25,000 hectares of pine plantation and 5,000 hectares of eucalyptus plantation. The business employs 711 people.

Headquartered in the United States, International Paper has been a leader in the forest products industry for more than 100 years. The company is currently transforming its operations to focus on its global uncoated papers and packaging businesses, which operate and serve customers in the U.S., Europe, South America and Asia. These businesses are complemented by an extensive North American merchant distribution system. International Paper is committed to environmental, economic and social sustainability, and has a long-standing policy of using no wood from endangered forests. To learn more, visit http://www.internationalpaper.com.

SOURCE International Paper
09/01/2006

CONTACT: Media: Amy Sawyer, +1-901-419-4312, or Investors: Brian McDonald, +1-901-419-4957, both for International Paper

Web site: http://www.internationalpaper.com

Cascades Tissue Group Acquires the Assets of Newstech

Kingsey Falls (Québec), September 1, 2006 – Cascades Tissue Group announces that it has acquired the assets of Newstech MD, LP located in Hagerstown, Maryland. The deinking mill was built in 1995 and has not been operational since the spring of 1997. It is equipped with two lines of deinking pulp and has a total production capacity of 400 tonnes per day.

In commenting on this acquisition, Suzanne Blanchet, President and Chief Executive Officer of Cascades Tissue Group, stated: "This transaction enables us to acquire excellent production equipment at a very attractive price. Over the next few months, we will use them either to improve our production of deinking pulp or in the production of tissue paper."

Founded in 1964, Cascades produces, transforms and markets packaging products, tissue paper and fine papers, composed mainly of recycled fibres. Cascades employs nearly 14 300 men and women who work in some 120 modern and flexible production units located in North America, in Europe and in Asia. Cascades' management philosophy, its more than 40 years of experience in recycling, its continued efforts in research and development are strengths which enable the company to create new products for its customers. The Cascades shares trade on the Toronto stock exchange under the ticker symbol CAS.

Certain statements in this release, including statements regarding future results and performance, are forward-looking statements (as such term is defined under the Private Securities Litigation Reform Act of 1995) based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for the Company’s products, increases in raw material costs, fluctuations in selling prices and adverse changes in general market and industry conditions and other factors listed in the Company’s Securities and Exchange Commission filings.


For further information:

Media:
Mr. Hubert Bolduc
Vice-President, communications and public affairs
(819) 363-5100
(514) 282-2600

Investors:
Mr. Marc Jasmin, C.M.A.
Director, Investor Relations
(514) 282-2681

Whitefield Paper Mills to Build P&W Paper Mill in India

Sept. 6, 2006 - Whitefield Paper Mills in India has been given the green light to proceed with its plans to build a 600 ton per day paper mill at Bayyaram village near Kovvuru in West Godavari district. A 40 MW cogenaration power plant will also be built on the site.

At a press conference, T. Srinivisa Rao, Whitefield Paper Mills' chairman, said the Union Ministry of Commerce has cleared the project.

The proposed mill will produce printing and writing papers, Rao siad.

Elof Hansson (Sweden) has been contracted to supply imported pulp to the mill. The Swedish group is also under agreement to buy-back paper produced by the mill, Rao added.

The mill is scheduled to start-up by 2008.

SOURCE: Hindu Business Line, Industry News Reports

Bowater Incorporated Announces Paper Curtailment at Thunder Bay, Ontario; Pulp Production to Continue at Facility

GREENVILLE, S.C., Sep 6, 2006 (Canada NewsWire via COMTEX News Network) -- Bowater Incorporated (NYSE: BOW) today announced its decision to curtail paper production at its Thunder Bay, Ontario, site. During this outage, the site will continue its pulp production.

"Overall demand for market pulp remains strong, which is encouraging," said David J. Paterson, President and Chief Executive Officer. "However, the continued decline in consumption of North American newsprint coupled with high manufacturing costs at Thunder Bay, including energy and fiber, as well as the overall strength of the Canadian dollar, are factors in the decision to curtail this site's paper machines."

The curtailment will begin Sept. 16 and is expected to continue for a minimum of 15 days. Up to 320 employees at Thunder Bay will be impacted by the outage. Thunder Bay's pulp mill, woodyard and forest operations will continue to operate during the curtailment. Bowater's newsprint and specialty papers customers will be served via other company locations.

Bowater's Thunder Bay site is located on the Kaministiquia River in Ontario. Its products include newsprint, market pulp and specialty paper. In addition to three paper machines, the Thunder Bay site includes a kraft pulp mill, thermo-mechanical pulp mill, recycling plant, multi-fuel biomass boiler and a cogeneration plant.

Bowater Incorporated, headquartered in Greenville, SC, is a leading producer of coated and specialty papers and newsprint. In addition, the company sells bleached market pulp and lumber products. Bowater employs approximately 7,800 people and has 12 pulp and paper mills in the United States, Canada and South Korea. In North America, it also owns two converting facilities and 10 sawmills. Bowater's operations are supported by approximately 857,000 acres of timberlands owned or leased in the United States and Canada and 28 million acres of timber cutting rights in Canada. Bowater operates six recycling plants and is one of the world's largest consumers of recycled newspapers and magazines. Bowater common stock is listed on the New York Stock Exchange and the Pacific Exchange. A special class of stock exchangeable into Bowater common stock is listed on the Toronto Stock Exchange (TSX: BWX). To learn more, visit www.bowater.com.

This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Some of these forward looking statements can be identified by the use of forward-looking terminology such as "will" and "expected," or similar expressions or by discussions of strategies, plans or intentions. They include, for example, statements about our business outlook, assessment of market conditions, strategies (including length and scope of the planned curtailment and continued operations at our Thunder Bay site), future plans, demand for our pulp and newsprint products (including continuations of any current trends), future manufacturing costs (including costs for energy and fiber), changes in the Canadian-U.S. dollar exchange rate, and future sales (including service to customers affected by the curtailment at our Thunder Bay site). These forward-looking statements are not guarantees of future performance. They are based on management's expectations that involve a number of business risks and uncertainties, which could cause actual results to differ materially. These risks and uncertainties include, but are not limited to, negative industry conditions and further growth in alternative media, actions of competitors, Canadian-U.S. dollar exchange rates, the actual realization of our debt and cost reduction strategies (including shifting production to lower cost facilities), the demand for higher margin coated and uncoated mechanical papers, the effects of planned and unplanned maintenance expenditures, the continued strength in the market for timberlands, the costs of raw materials such as energy, chemicals and fiber, and other factors listed from time to time in Bowater's Securities and Exchange Commission filings, including those described in the company's quarterly report on Form 10-Q for the three months ended June 30, 2006 under the caption "Cautionary Statements Regarding Forward-Looking Information and Use of Third Party Data." Bowater disclaims any obligation to update these forward-looking statements.

SOURCE: Bowater Incorporated

Bowater Incorporated Media & Investor Contact: Duane A. Owens, 864-282-9488

Star Paper Mills to Increase P&W Paper Capacity in India

Sept. 8, 2006 - Star Paper Mills announced that it has plans to possibly double the papermaking capacity of its mill in the city of Saharanpur in Uttar Pradesh, India.

The capacity increase would become part of the company's ongoing "Asset Rejuvenation" plan

Star said that it should have a detailed project report ready before the end of 2006.

The mill currently produces 80,000 tons of printing and writing paper.

SOURCE: Industry News Reports

September 8, 2006 the inauguration ceremony of AS Estonian Cell pulp mill took place


Friday, September 8, 2006 the inauguration ceremony of AS Estonian Cell pulp mill took place.
 
The greenfield aspen BCTMP mill in Kunda with an investment of 153 MEUR started the test production in March. Since then the machinery has been finetuned and the tests necessary for the takeover have been successfully finished. The construction period was approximately two years. 

The production line consists the following steps: chipping line, BCTMP line, drying line, baling line. Up to now the mill has produced about 25 thousand tons of BCTMP, the yearly capacity is 140 thousand tons. BCTMP is the raw material of several paper qualities – printing/writing, tissue, board. As Estonia does not have own markets for pulp, the total production will be exported. Main markets are in West Europe. The first months production has been sold mainly to China, also to France, Germany and other European countries. 

AS Estonian Cell employes 83 people, one third are from Kunda. The mill applies to the most modern technology with a high automization and fulfills stringest environmental requirements. The production process is environmentally friendly – it does not require any aggressive chemicals and the biological water treatment reaches the waste reduction factor of over 90%. The raw material of BCTMP is aspen pulpwood, the yearly consumption is 380 thousand cubic meter. The mill has a very high energy consumption, 240 GWh yearly which is 2,5-5% of the total Estonian energy consumption. 

The mill has three owners – Austrian Heinzel Group, Larvik Cell from Norway and European Bank for Reconstruction and Development.

Malu Paper Mills to Increase Newprint Capacity in India

Sept. 20, 2006 - Malu Paper Mills Ltd. (MPML), which is based in Nagpur, Maharashtra, India, plans to increase its papermaking capacity by the middle of 2007 with the addition of a paper machine.

The company expects to increase its newsprint capacity to 90,000 tons per year in 2007-08, up some 70,000 tpy from its current capacity of 19,800 tpy.

According to the Hindu Business Line, a second-hand paper machine is being delivered to the mill from another country in Europe. The machine has a capacity of 150 tpd of premium quality newsprint.

MPML also plans to install a new deinking plant to process its primary raw material, which is waste paper.

The company currently operates two mills in Nagpur—the newsprint mill and another that produces craft paper.

SOURCE: Hindu Business Line

Ence to Seek Alternate Site for Uruguay Pulp Mill

Sep 22, 2006 | Paper Age

Ence yesterday announced a rethink of its plan to build a 500,000 tpy pulp mill on the Uruguay River, which forms a border with Argentina, following pressure from Argentina.

Sept. 29, 2006

Ahlstrom, a global leader in high performance fiber-based materials, has decided to close down its Nümbrecht plant in Germany. The closure, effective in April 2007 at the latest, will affect 37 employees. As a consequence of the closure, Ahlstrom estimates to book a non-recurring cost of approximately EUR 2.5 million in its Q3 result of 2006. The decision supports Ahlstrom's strategy to improve its profitability by a number of actions, including closing down non-competitive manufacturing units.

The Nümbrecht plant is focused on the production of wallpaper base paper. Negotiations with the employees of the plant have started. Ahlstrom strives to minimize the impact on its customers by serving them from other production platforms within the Group. The company is in contact with its customers to discuss the required actions in detail.

29 September 2006

Stora Enso's Port Hawkesbury Mill to restart

 
Stora Enso Oyj Stock Exchange Release 29 September 2006 at 12.00 GMT
 
Stora Enso's Port Hawkesbury Mill in Nova Scotia, Canada, will restart operations following a 10-month shutdown due to profitability challenges. 
 
The mill will carry out a phased-in approach to getting the two paper machines operating, beginning with the immediate start-up of its paper machine (PM) 2 which has an annual capacity of 360 000 tonnes of super-calendered magazine paper ("SC" catalogue and magazine paper), followed by PM 1, which has an annual capacity of 190 000 tonnes of newsprint.
 
The three main local factors that impact the future profitability of the mill are energy, labour and taxes. Stora Enso has reached the following on these items:
 
  •          Energy: The Nova Scotia Utility and Review Board established a new rate formula for large industrial customers based on the actual cost for Nova Scotia Power Inc. to produce electricity.
  •          Labour: The new labour contract allows modern work practices and includes wage concessions.
  •          Taxes: The local municipality has agreed to a 10-year realty tax agreement. The Province of Nova Scotia has agreed to phase out the capital tax.
  •  
    The mill ceased production on 24 December 2005 due to a labour dispute. The new five-year collective labour agreement (31 May 2004-31 May 2009) was ratified on 20 June 2006. The agreement includes a 10% decrease in wages from the 2006 level, changes to key work practices such as flexibility and overtime, and 54 identified reductions in workforce, which have been achieved through a voluntary early retirement programme. In addition, wage reductions of 10% also applied to all salaried personnel. The agreement was necessary for the mill to achieve profitability with two machines.
     
    The restart of the mill after the June ratification by the union was delayed until the issue of high electricity costs was resolved with the local power utility. The Nova Scotia Utility and Review Board recently approved a revised power rate for Extra Large Industrial customers. 
     
    The impact on the Stora Enso Group's operating profit during the shutdown period has been approximately EUR 5 million per month.
     
    The Port Hawkesbury Mill will continue to face the challenges of the marketplace and the strength of the Canadian dollar, which puts particular pressure on Canadian manufacturing industries exporting to the United States. 
     
     
    For further information, please contact:
    Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 197
    Keith B Russell, SVP, Investor Relations, tel. +44 20 7016 3146
    Tim Laatsch, SVP, Communications, Stora Enso North America, tel. +1 715 422 4023
    Ulla Paajanen-Sainio, VP, Investor Relations and Financial Communications, tel. +358 40 763 8767
     
     
    Stora Enso's Port Hawkesbury Mill has been operating in Nova Scotia since 1962. It produces 190 000 tonnes of newsprint and 360 000 tonnes of super-calendered paper for the catalogue and magazine paper markets primarily within North America. Port Hawkesbury Paper Mill and its forestry unit are part of the North American operations of Stora Enso Oyj, which also has papermaking facilities at Wisconsin Rapids, Stevens Point, Whiting, Kimberly, Niagara and Biron, Wisconsin; and Duluth, Minnesota.
     
    www.storaenso.com

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