STORA ENSO

www.paperage.com
JANUARY/FEBRUARY 2015
STORA ENSO
Transforming itself
for a sustainable future
CONTAINERBOARD
Recent box shipments
strong, but new
capacity a worry
contents
JANUARY/FEBRUARY 2015, Volume 131, Number 1
C O L U M N S
16 Market Grade: Containerboard
Outlook spurred by box data, but new capacity
a worry.
18 H
eads-Up: What the Industry is
Thinking About
A number of industry conferences rounded out
the year in Europe and the speakers’ presentations
provided a hint of what industry leaders are thinking.
18
F E A T U R E S
18 Building Better Times
Stora Enso is in the midst of transforming
itself from a European producer of pulp and
paper into what the company emphasizes is
a value-creating renewable materials company.
26Build Strength in Your Tissue,
Paper and Board
Multifunctional strength additives enhance
strength properties, optimize furnish costs and
increase productivity.
30 P
olicy Matters: Advancing Industry
Policy Priorities in Washington, D.C.
AF&PA isn’t waiting to hear from Congress or the
administration to advocate on the industry’s most
pressing issues, and plans to educate newly-elected
and returning Senators and Representatives about
paper and wood products manufacturing.
D E P A R T M E N T S
4 Editor’s Note
6 Industry News
14 People
15 Calendar
S E R V I C E S
29 Classified Ads
29 Index of Advertisers
On the cover. Stora Enso’s Enocell pulp mill in Uimaharju,
Eastern Finland. The mill produces NBSK, BHKP, and
dissolving pulp. The mill site is also home to a power
plant with an annual power generation capacity of
about 600 GWh, of which approx. 400 GWh is used
by Stora Enso’s operations at the site.
PaperAge J A N U A R Y / F E B R U A R Y 2 0 1 5
3
editors note
The Next Big Thing —
Sort of
EDITOR IN CHIEF
Jack O’Brien
By John O’Brien, Managing Editor
PUBLISHER
Michael C. O’Brien
[email protected]
MANAGING EDITOR
John F. O’Brien, Jr.
CONTRIBUTING EDITOR
Harold M. Cody
CONTRIBUTING WRITER
David Price
CONTRIBUTING WRITER
John Yolton
LAYOUT & DESIGN
George H. Dean Co.
For the most part I always use this space to talk
about a pressing issue affecting the paper industry.
But instead, let’s start 2015 off on a lighter note
and highlight a few of the more "next big things"
made of paper.
For all you wine lovers out there, don’t think
red, white or rosé – think green, as in eco-friendly.
Healdsburg, California-based wine company
Truett-Hurst did just that with their PaperBoy
wine. PaperBoy is packaged in a molded paper
outer shell made from recycled cardboard in
the shape of a traditional wine bottle with a
plastic liner inside. Designer Kevin Shaw of the
package design firm Stranger & Stranger worked
with Truett-Hurst to design the package, and
GreenBottle, a UK-based paper bottle manufacturer, brought the paper wine bottle to life.
According to Truett-Hurst, the PaperBoy
bottle is 100% recyclable and 80-85% lighter than glass, and beyond the recyclability
factor, the light-weight bottles reduce fuel usage
during transportation, further reducing its
carbon footprint.
And what better place to serve wine in paper
bottles than at a bar made of paper. UK-based
James Cropper recently provided paper to
a British design studio for the construction
of a lavish paper bar. The bar was created to
stand as a centerpiece in London’s Institute of
Contemporary Arts (ICA) during the London
Collections fashion event.
Developed and built by Sam Robins of Flow
Creation, the free-standing bar was nearly 29
feet in length, made from two different weights
of James Cropper’s White Kendal Manilla stock
(40% recycled fiber), and came complete with
paper glasses, lamps and fine architectural detail.
After the show, the bar and accessories were
recycled, of course.
4
JANUARY/FEBRUARY 2015
VOLUME 131, NO. 1
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
The next big paper thing is perfect for any New
Year’s resolutioners who vowed to get back into
shape but don’t want to spend big bucks on a
gym membership or fitness equipment — an
eliptical machine made from cardboard. Its
creator, Luanga Nuwame, decided to build a
cardboard elliptical trainer after getting tired of
being bombarded by infomercials selling expensive fitness equipment during the weeks leading
up to the holidays. One week and 15 glued sheets
of double-corrugated cardboard later, Nuwame
finished his machine, dubed “Cardboard-O-Flex.”
“Pushing the limits of what can be made
with cardboard, I present the world’s first 100%
cardboard elliptical workout machine", Nuwame
proudly exclaims in a YouTube video. “It can
hold my weight and swing back and forth as a
workout.” And it does!
Probably the most impressive achievement
using recovered cardboard was accomplished by
Smurfit Kappa and its engineering and construction of a real paper airplane — not to be
confused with the kind you make from a sheet
of paper and throw down the aisle from the back
of the classroom.
The 30-foot long airplane has a wingspan of
about 26 feet and is 6.5 feet tall, weighing a little
over 360 pounds. The aircraft was made entirely
from paper, cardboard and glue. On its maiden
voyage with a “test pilot” (a 130-lb. dummy), the
plane reached an altitude of just over 80 feet
and traveled a distance of about 1,000 feet. The
plane was initially designed by Arnoud Dekker,
who has a degree in aeronautical engineering and
works in Smurfit Kappa’s Development Center.
There are a lot more examples of human
ingenuity coupled with the versatility of paper
— most of it just fun stuff — but you never
know when one of these inventions might just
be the next big thing! n
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Copyright ©2015 by O’Brien Publications, Inc. All rights
reserved. PaperAge (ISSN:0031-1081) is published six
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Periodicals postage paid at Cohasset, MA and additional
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industry news
NORTH AMERICA
Verso Completes $1.4 Billion Acquisition
of NewPage
Domtar to Convert a UFS Paper Machine at
Ashdown to Fluff Pulp Production
Verso Corporation on Jan. 7 announced the completion of
its acquisition of NewPage Holdings Inc. The deal, valued at
approximately $1.4 billion, originally was announced on January
6, 2014. With the completion of the NewPage acquisition, Verso
will have approximately $3.5 billion in annual sales and approximately 5,800 employees in eight mills across six states.
“The combination of Verso and NewPage creates a stronger,
more stable company with an effective strategy to weather
industry headwinds and reduce operating costs, while ensuring
our customers continue to benefit from the distinctive quality
and service that they have come to expect from us,” said David J.
Paterson, Verso’s president and CEO.
“We continue to face
increased competition from
electronic substitution for
print and from international
producers, but as a larger,
more efficient organization
with a sustainable capital
structure, we are better positioned to deliver solid results despite
the industry’s continuing challenges.”
Verso expects the combination to result in substantial cost
synergies over the next 18 months.
“With the complementary asset base and shared strategic
focus on coated paper manufacturing, this acquisition represents
a relatively low integration risk, so we remain confident that
we can deliver the synergies within the expected timeframe,”
Paterson said.
Domtar’s Board
of Directors has
approved a $160
million capital
project to convert an uncoated
freesheet (UFS)
paper machine
at the Ashdown,
Arkansas mill to a high quality fluff pulp line used in absorbent
applications such as baby diapers, feminine hygiene and adult
incontinence products.
The planned conversion is expected to come online by the
third quarter 2016 and will allow for the production of up to
516,000 metric tons of fluff pulp per year once the machine is
in full operation.
The project will also result in the permanent reduction of
364,000 short tons of annual UFS production capacity in the
second quarter of 2016.
Currently, the Ashdown mill has an annual paper production
capacity of 680,000 tons and an annual pulp production capacity
of 700,000 tonnes with 3 pulp lines and 3 paper machines.
“The fluff pulp conversion project at the Ashdown mill is an
important step in advancing our strategy to generate $300 to 500
million of EBITDA from growth businesses,” said John D.
Williams, Domtar’s CEO.
“We are expanding our presence in a growing business that
will allow us to support our top-tier supplier position with some
of the world’s largest producers of absorbent hygiene products.
Once completed, Ashdown, together with our Plymouth mill
will provide a platform to further strengthen our leading position
as an effective producer of high quality fluff pulp with nearly one
million tonnes of total production capacity,” Williams said.
“The conversion of the paper machine in 2016 will further
help balance our supply with our customers’ demand. In the
interim, the flexibility of the two remaining paper machines at
the Ashdown mill allows us to take measured steps to adjust our
paper production while selling paper-grade pulp,” Williams added.
The conversion work is expected to begin during the second
quarter of 2016 and the fluff pulp line is scheduled to start-up
by the third quarter 2016. The cost of conversion will be
approximately $160 million of which $40 million is expected to
be invested in 2015 and $120 million in 2016. Domtar will also
invest in a pulp bale line that will provide flexibility to manufacture
paper-grade softwood pulp, contingent on market conditions.
Divestiture of Biron and Rumford Mills
In a related transaction, immediately prior to Verso’s acquisition
of NewPage, NewPage completed the divestiture of its paper
mill in Biron, Wisconsin, and its pulp and paper mill in Rumford,
Maine, to Catalyst Paper Operations Inc., a subsidiary
of Catalyst Paper Corporation. The divestiture, originally
announced on October 30, 2014, was undertaken pursuant
to a settlement with the United States Department of Justice
that enabled the NewPage acquisition to proceed.
Name Change. Promptly after the NewPage acquisition was
completed, Verso changed its name from Verso Paper Corp. to
Verso Corporation. The name change symbolizes Verso’s intention
to broaden its business platform and seek alternative revenue
streams to augment its core printing papers, specialty papers and
pulp segments.
6
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
industry news
Dunn Paper Acquires Specialty Mills from
Clearwater Paper
Dunn Paper in December acquired the Specialty Mills business
from Clearwater Paper. The deal includes the sale of five
Clearwater Paper specialty tissue and machine glazed paper
mills located at Wiggins, Mississippi; Menominee, Michigan; East
Hartford, Connecticut; Gouverneur (Natural Dam), New York;
and St. Catharines, Ontario.
“We are very pleased to welcome the exceptional people who
lead and work at these specialty mills to the Dunn Paper team,”
said Brent Earnshaw, CEO of Dunn Paper.
The five mill locations include nine paper machines with
more than 200,000 tons of production capacity across a diverse
set of product lines including machine glazed paper, coated
paper,specialty napkin, towel and tissue, and wet crepe.
The business will continue supporting its customers as
previously, with Specialty Mills leadership, including D’Arcy
Schnekenburger and Wade Kemnitz, plus an exceptional group
of nearly 500 employees across the Specialty business joining
Dunn Paper.
Dunn Paper produces a wide array of specialty waxed,
coated, and uncoated machine glazedpapers used in various food
packaging and specialty label applications.
Menasha Corp. Acquires Canada-based
PearceWellwood
Menasha Corp. has acquired PearceWellwood Inc. of Brampton,
Ontario. The family-owned business will operate as part of
Menasha Packaging Company, LLC, a subsidiary of Menasha
Corp. Terms of the deal were not disclosed.
PearceWellwood designs and manufactures corrugated
displays for the retail industry and offers fulfillment and
distribution services.
In a related transaction, Menasha also acquired an ownership
interest in Tencorr Packaging, a corrugated sheet manufacturer
with plants in Brampton and Mississauga, Ontario, from
PearceWellwood’s parent company, Pearce Group. The Tencorr
investment will ensure that the PearceWellwood business
will continue to benefit from a reliable, high-quality
corrugated supply.
“The acquisition of PearceWellwood provides Menasha
Packaging Company a foothold in Canada to better serve new
and existing major consumer packaged goods customers located
in the region with expertise in display design, manufacturing
and fulfillment,” said Jim Kotek, president and CEO of
Menasha Corp.
8
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
Appleton Coated Acquired by Virtus Holdings
Domtar to Convert a UFS Paper Machine at
Ashdown
to Fluff
Pulp
Production
Appleton Coated has been purchased by Virtus Holdings
Domtar’s Board of Directors has approved a $160 million capital
LLC, a new company formed by members of Appleton
project to convert an uncoated fresheet (UFS) paper machine at
Coated’s management team.
the Ashdown, Arkansas mill to a high quality fluff pulp line used
Virtus Holdings purchased the company from a
in absorbent applications such as baby diapers, feminine hygiene
subsidiary of Sequana SA, which had been the company’s
and adult incontinence products.
parent.
ultimate
The planned
conversion is expected to come online by the
The
sale
was
third quarter 2016effective
and willDecember
allow for 19,
the 2014.
production of up to
The
Fox
Valley
company
will
continue
to operate
under is
516,000 metric tons of fluff pulp per year once
the machine
Appleton Coated LLC, with no substantial busiin the
full name
operation.
personnel
operational
changes
planned
for the of
ness,
The project
willoralso
result in the
permanent
reduction
immediate
364,000
shortfuture.
tons of annual UFS production capacity in the
second
quarter
of 2016.about our plans for the future of the
“We
are excited
company
Currently,and
theare
Ashdown
mill has
paper suppliers,
production
very grateful
to an
ourannual
customers,
capacity
of 680,000
tonshave
and an
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production
and employees
who
stood
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thecapacity
sales
of process,”
700,000 stated
tonnesDoug
with 3Osterberg,
pulp linesCEO
and 3ofpaper
machines.
Appleton Coated.
“The
fluff
pulp conversion
project
at freesheet,
the Ashdown
mill
is an
“Our
focused
strategies in
coated
along
with
important
in advancing
our strategy
generate
to 500
our newstep
business
development
effortstoare
proving$300
successmillion
of
EBITDA
from
growth
businesses,”
said
John
D.
ful. We remain firmly committed to the coated freesheet
Williams, Domtar’s CEO.
segment, but have substantively diversified our product
“We are expanding our presence in a growing business that
portfolio with over 40 percent of revenue now generated
will allow us to support our top-tier supplier position with some
from products outside of the traditional coated freesheet
of the world’s largest producers of absorbent hygiene products.
segment,” Osterberg added.
Once completed, Ashdown, together with our Plymouth mill
To assist the management team with the acquisition, the
will provide a platform to further strengthen our leading position
Development
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as Wisconsin
an effectiveEconomic
producer of
high quality fluff
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is providing
Coated with
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million
tonnes Appleton
of total production
capacity,”
Williams
purchase
of
equipment.
“The conversion of the paper machine in 2016 will further help
Theour
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to demand.
maintain In
thethe
existing
balance
supply with
ourrequired
customers’
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jobs and create
newremaining
jobs underpaper
the terms
of the loan.
the570
flexibility
of the27two
machines
at the
Up to $1
million
be forgiven
depending
Ashdown
mill
allowsofusthe
to loan
take may
measured
steps to
adjust our
paper
production
whileare
selling
paper-grade
pulp,”over
Williams
added.
on how
many jobs
created
and retained
the next
five
Theyears.
conversion work is expected to begin during the second
quarter
of 2016 Coated’s
and the fluff
pulp line
is scheduled
to paper
start-up
Appleton
corporate
headquarters
and
bymill
the are
third
quarter
2016.
The
cost
of
conversion
located in Combined Locks, Wisconsin. Thewill
millbe
approximately
$160
million
of
which
$40
million
is
expected
has an annual production capacity of 400,000 tons on to
bethree
invested
in machines,
2015 and $120
in 2016.
will also
paper
and anmillion
adjacent
coatingDomtar
and finishing
invest in a pulp bale line that will provide flexibility to manufacture
complex with processing capacity of 280,000 tons.
paper-grade softwood pulp, contingent on market conditions.
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industry news
Graphic Packaging to Acquire Folding Carton
Converting and Paperboard Mill Assets of
Cascades’ Norampac
Graphic Packaging International
in December agreed to acquire
several folding carton converting
and paperboard mill assets from
Cascades’ Norampac Division
in Canada.
“The acquisition of Cascades’
Norampac paperboard assets
enhances our position in North
American folding cartons and enables us to extend our customer
reach in Canada,” said David Scheible, Graphic Packaging’s
Chairman, President and CEO.
“The transaction is a continuation of our acquisition strategy
to grow integrated folding carton converting volumes in key
geographies and end-markets. These assets will broaden our
customer base and allow us to offer our current customers a
wider range of products,” Scheible said.
Under the terms of the deal, the purchase price will be
approximately $39 million based on trailing twelve month sales
of approximately $215 million and adjusted EBITDA of approximately $5 million. Significant synergies are expected over the
next 24 months.
The transaction will be funded with existing cash and borrowings from Graphic Packaging’s revolving line of credit.
Norampac operates three folding carton converting facilities
located in Cobourg, Ontario, Mississauga, Ontario and Winnipeg,
Manitoba, along with a Solid Bleached Sulfate (SBS) substitute
mill located in Jonquiere, Quebec and a Coated Recycled Board
(CRB) mill located in East Angus, Quebec.
The deal is subject to standard closing requirements and
regulatory review and is expected to close in the first quarter
of 2015.
New-Indy to Acquire Carolina Container Company
New-Indy JV Corp. has entered into an agreement to acquire
Carolina Container Company, a manufacturer of corrugated
products headquartered in High Point, North Carolina.
The acquisition would include CaroCon Display and
Packaging, a division of Carolina Container.
Terms of the deal, which New-Indy expects to close at the
end of January, were not disclosed.
In a press release, New-Indy stated, “Carolina Container is a
great fit strategically to our existing operations with their broad
footprint of corrugated converting operations in the Southeast.”
10
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
Mohawk Plans for New Envelope Manufacturing
Facility in Western Massachusetts
Mohawk has announced plans to
operate a new state-of-the-art
envelope manufacturing facility
in the town of South Hadley,
Massachusetts, resulting in the
creation of up to 40 new jobs.
The announcement comes after the Massachusetts Office
of Business Development Economic Assistance Coordinating
Council voted unanimously to approve Mohawk’s application
for a special tax assessment for the facility.
Mohawk intends to enter into a seven year lease agreement on
the 112,342 square foot facility beginning January 1, 2015.
“Our plan to create a new envelope converting facility in
South Hadley, Massachusetts represents our commitment to
further growth of Mohawk’s envelope business,” said Thomas D.
O’Connor, Jr., Chairman and CEO, Mohawk.
Mohawk will invest up to $2 million to retrofit the South
Hadley facility, including upgrades to electrical systems, installation of air and vacuum lines, and the purchase and installation of
envelope converting and manufacturing equipment.
The facility is expected to be fully functional by the end of
April 2015.
Mohawk expects to produce over 500 million envelopes
annually at the new facility. The site will also feature warehouse
space to service the company’s customers along the East Coast
and Mid-Atlantic regions, as well as overseas businesses.
MWV to Spin-off Its Specialty Chemicals Business
MeadWestvaco’s (MWV) board of directors has approved a plan
to fully separate its Specialty Chemicals business from the rest
of the company. The separation is expected to be executed by
means of a tax-free spinoff of the Specialty Chemicals business
to MWV shareholders, resulting in two independent, publicly
traded companies.
The spinoff is expected to be completed by the end of 2015.
MWV said that it remains open to other value-creating alternatives
for the Specialty Chemicals business throughout this process.
“Following a thorough strategic review process, MWV’s
board and leadership team determined that a tax-free spinoff of
Specialty Chemicals presents the best opportunity to create the
greatest value for our shareholders,” said John A. Luke Jr., chairman
and CEO of MWV. “The separation of Specialty Chemicals will
establish two strong companies that are better positioned to
compete and profitably grow in their targeted markets.”
MWV expects to receive cash from the spinoff that will be
used primarily to pay down debt to maintain MWV’s investment
grade credit rating.
industry news
Blue Ridge Paper Products Awarded JMAC Grant for Canton, NC Paper Mill
Blue Ridge Paper Products, a subsidiary of Evergreen Packaging, has
been awarded a Job Maintenance and Capital Development Fund
(JMAC) Grant to be used to convert two of its coal-fired boilers
to natural gas at its Haywood County plant (North Carolina).
As a result of the funding, the plant will become more energy
efficient and operate cleaner. In addition, remaining funds will be
used to retrofit three additional boilers.
The North Carolina Economic Investment Committee (EIC)
approved the grant on Dec. 19. The company will receive up to
$12 million over ten years to make the conversion. Evergreen
Packaging will invest $51 million.
“This JMAC grant is doing exactly that at [the Canton mill].
When the work is completed, Blue Ridge Paper Products will
be operating more efficiently, and will have kept a significant
number of high-paying, high quality jobs” said Gov. Pat McCrory.
Blue Ridge Paper Products is the largest private employer in
Haywood County. The U.S. Environmental Protection Agency
informed the company it has until 2019 to comply with federal
boiler maximum achievable control technology (MACT) or be
required to shut down.
The JMAC Fund is a discretionary incentive program that
provides sustained annual grants to businesses that meet the
requirements of a
major employer or a
large manufacturing
employer. The JMAC
Fund is intended to
encourage retention
of significant numbers of high-paying,
high quality jobs and
large-scale capital investment that will modernize processes and
provide more globally competitive projects.
Blue Ridge Paper Products qualifies as a large manufacturing employer. Under the statute, a business must invest at least
$50 million in capital improvements designed to convert its
manufacturing process to change the product it manufactures or
designed to enhance pollution controls or transition the manufacturing process from using coal to using natural gas for the purpose
of becoming more energy efficient and reducing emissions.
In addition, the business must either be in a Tier 1 county with
at least 320 full-time employees, or be in a Tier 2 county with a
population of less than 60,000 as of July 1, 2013 and employ at
least 800 full-time employees.
PaperAge J A N U A R Y / F E B R U A R Y 2 0 1 5
11
industry news
EUROPE
RUSSIA
Stora Enso to Sell Uetersen Paper Mill to
Private Equity Group
Syktyvkar Tissue Starts Up New Valmetsupplied Tissue Machine
Stora Enso has signed an agreement to divest its Uetersen
specialty and coated fine paper
mill in Germany to a company
mainly owned by the private
equity fund Perusa Partners
Fund 2. The cash consideration
for the divestment of the shares is approximately EUR 7 million
subject to customary closing day adjustments.
The transaction is in line with Stora Enso’s strategic transformation to a customer-focused renewable materials company.
The sale is expected to be completed in the first quarter
of 2015.
Based on 2013 annual figures, the divestment is expected
to reduce Stora Enso’s annual sales by EUR 155 million. It will
also reduce Stora Enso’s annual paper production capacity by
around 240,000 tonnes.
Stora Enso will continue to produce specialty papers at its
Imatra Mill and coated fine paper at Oulu Mill in Finland.
Stora Enso’s previous attempt to divest the mill to Brigl
& Bergmeister, an Austrian specialty paper producer, was
unsuccessful due to the German Federal Cartel Office’s
indicated intentions to prohibit the proposed transaction.
A Valmet-supplied tissue
line recently started up at
Syktyvkar Tissue Group’s
new site in Semibratovo,
Yaroslavl region, Russia. The
new Advantage DCT 100HS
machine adds 30,000 tons of tissue per year to the company’s
current production of bathroom tissue, napkin and towel grades.
The tissue machine has a width of 2.7 meters and a design
speed of 2,000 m/min.
Valmet’s delivery included a complete tissue production line
along with basic and detailed engineering, process equipment,
as well as the supervision of the installation and training of the
new tissue line.
Metso delivered an automation package with a process
control system.
Syktyvkar Tissue Group employs 385 people and produces
approximately 45,000 tonnes of tissue per year.
Fripa Papierfabrik Starts Up New Tissue
Production Line in Germany
Fripa Papierfabrik in mid-November started up a new Voithsupplied tissue paper production line at Fripa’s Miltenberg paper
mill in Germany.
The new tissue machine, PM 7, is designed for a paper width
of 2,700 mm and produces toilet paper and paper towels from
100% virgin pulp at a working speed of 2,100 m/min.
According to Voith, PM 7 is equipped with a NipcoFlex T
shoe press, which reduces the need for thermal energy by up to
20% due to the high dry content after the press. At the same time
it is ideally suited for production of soft paper and thus meets
the high quality requirements of Fripa.
Voith delivered the entire process line to Fripa — from stock
preparation and the approach flow system, the tissue machine,
auxiliary equipment, including system accessories such as
automation, electrification and engineering.
In addition, extensive services and replacement parts were
also included in the delivery.
12
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
I N D U S T RY S U P P L I E R S
Kemira Inaugurates Chemical Production
Plant in Nanjing, China
Kemira recently celebrated the completion of the company’s
new Nanjing production base in the Nanjing Chemical Park,
Jiangsu Province of China. Over 200 distinguished guests
attended the event. The new plant will provide a wide range of
functional and process chemicals for water-intensive industries
such as the paper industry. The estimated annual capacity is
100,000 tons.
The new plant is equipped with cutting-edge facilities offering
the highest quality, featuring a high degree of automation
and use of sophisticated IT-systems in the production process
and is focused on the Asian market, China in particular.
Production will be mainly serving the paper industry, while at the
same time providing products and services to the oil & mining
industry and municipal water treatment.
Currently there are five production lines serving across an
array of chemical products for pulp and paper manufacturing.
The production capacity for sizing agent (ASA), which mainly
used for improving water-resistance in middle to high end paper,
will be the largest in Asia.
Besides ASA products, the new plant also produces polyacrylic
ester, polyacrylamide emulsion, defoamers, and deinking agents, all
of which are widely applied in key paper manufacturing processes.
industry news
BIOPRODUCTS
UPM Lappeenranta Biorefinery Starts
Commercial Production
UPM has started commercial production at its
wood-based renewable
diesel biorefinery in
Lappeenranta, Finland.
The biorefinery is based
on a hydrotreatment process developed by UPM, and produces
approximately 120 million liters of renewable UPM BioVerno
diesel per year.
“Lappeenranta Biorefinery is the first significant investment
in a new and innovative production facility in Finland during the
ongoing transformation of the forest industry. It is also a focal part
in the implementation of our company’s Biofore transformation
strategy,” said Heikki Vappula, Executive Vice President, UPM
Biorefining.
Petri Kukkonen, Head of UPM Biofuels business, added, “The
start-up phase of the biorefinery began in early autumn, and it
has included customary new process and production related challenges. The biorefinery is first of its kind in the world. We are
now happy to move forward from start-up phase and be able to
concentrate on regular production process.”
UPM BioVerno diesel is produced out of crude
tall oil, a residue of pulp production, in the
Lappeenranta Biorefinery. A big portion of the raw
material comes from UPM’s pulp mills in Finland.
UPM BioVerno diesel is produced out of crude tall oil, a residue
of pulp production, in the Lappeenranta Biorefinery. A big portion
of the raw material comes from UPM’s pulp mills in Finland.
UPM noted that its BioVerno diesel reduces greenhouse gas
emissions by as much as 80 percent compared to traditional diesel.
Based on research, BioVerno works with all diesel motors just as
well as any regular diesel. The company has a sales agreement with
NEOT (North European Oil Trade), a wholesale organization of
oil and biofuel products.
UPM pointed out that the EUR175 million biorefinery was
built without any public investment grants.
Construction of the Lappeenranta Biorefinery started in the
summer of 2012 and the foundation stone was laid in November
of the same year. The plant will directly employ nearly 50 people
and indirectly about 150 people.
PaperAge J A N U A R Y / F E B R U A R Y 2 0 1 5
13
people
PA P E R
SUPPLIERS
n Catalyst Paper has
appointed Greg
Maule as Senior
Vice-President, US
Operations and
Linda McClinchy
as Vice-President,
Linda McClinchy
Greg Maule
US Supply Chain.
Most recently, Maule was Vice-President, Manufacturing
Operations at NewPage Corporation. He holds a Master
of Science, Pulp and Paper Engineering from the Institute
of Paper Science and Technology. McClinchy most recently
held the position of Vice-President, Customer Service at
NewPage Corporation. She holds a Master of Business
Administration from Lake Superior State University.
nBarry-Wehmiller said that William Kuhn has been promoted
to Vice President of Finance. He succeeds Jim Lawson,
who served as Vice President and CFO since 1997, and
is retiring. Kuhn, a CPA, brings more than 14 years of
experience at Barry-Wehmiller to this role, most recently
as Director of Financial Reporting.
n Northern Pulp has promoted Bruce Chapman to the
position of General Manager of Northern Pulp Nova Scotia
Corporation. Chapman fills the position formerly held by
Don Breen, who retired in February
of 2014. Chapman joined Northern
Pulp’s operations as a process engineer
in August 1996 and has held the positions of assistant engineer, fiber line
team leader, utilities team leader,
operations manager and, recently,
Bruce Chapman
acting general manager.
nThiele Kaolin Company’s Board of Directors recently
announced that Paul Kirschling will retire as the company’s
President effective Feb. 1, 2015. Eric Tillirson, Senior
Vice President and Director of Sales Development for
the company, has been named as Kirschling’s successor.
Tillirson joined Thiele in 1999 as Marketing Manager
and was promoted to Director of
Marketing in 2002. In 2004, he was
appointed Vice President of Sales,
Marketing and Technical Service.
Tillirson earned his Bachelor of
Science degree in Chemistry from
Presbyterian College and Master of
Eric Tillirson
Business Administration from Georgia
College & State University. Thiele also announced that
Mike Markillie was appointed Vice President of Sales,
Marketing, & Technical Services, effective Jan. 1. Markillie
has been with Thiele since 2005.
n
Sappi Europe has named Thomas Kratochwill as the new
Sales and Marketing Director for Specialty Papers. He
succeeds Rosemarie Asquino, who is retiring after 38
years with the company. Asquino will be available until
the end of July 2015 as an advisor on strategic issues.
Kratochwill joined Sappi in 1995 in the Finance department, following his studies at KPMG.
n Södra announced that Laila Rogestedt
has been appointed Head of Innovation
and New Business, effective March
1, 2015. At that time she will also
become a member of Group Senior
Management. Rogestedt succeeds
Karin Emilsson who, as previously
announced, will be leaving Södra.
14
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
Laila Rogestedt
nKemira announced that Petri Helsky,
President of Paper segment and Asia
Pacific region will leave the company
to take up the position of CEO of
Metsä Tissue. Helsky will continue in
his current position and as a member
of Kemira’s Management Board until
the end of June 2015.
Petri Helsky
n Valmet has appointed Bertel Karlstedt as President of
Pulp and Energy business line,
effective Feb. 1. He succeeds Jyrki
Holmala who left the company at
the end of November. Karlstedt joins
Valmet from Nordkalk Corporation,
where he served as President and
CEO. Karlstedt holds a Master of
Bertel Karlstedt
Science degree in Thermodynamics.
calendar
JANUARY 29-30, 2015
Paper Recycling Conference India
Recycling Today Media Group
Taj Palace Hotel
New Delhi, India
www.RecyclingToday.com
FEBRUARY 2-5, 2015
Paper Week Canada
PAPTAC
Fairmont Queen Elizabeth Hotel
Montreal, Quebec Canada
www.paperweekcanada.ca
FEBRUARY 25-27, 2015
ASPI Spring Meeting
Association of Suppliers to the Paper Industry
La Playa Beach and Golf Resort
Naples, Florida, USA
www.aspinet.org
MARCH 15-17, 2015
Paper2015
AF&PA and NPTA
Trump International Hotel
Chicago, Illinois, USA
www.paper2015.com
APRIL 16, 2015
Converters Expo
Packaging Strategies
Lambeau Field Atrium
Green Bay, Wisconsin, USA
www.convertersexpo.com
APRIL 19-22, 2015
PaperCon
TAPPI
Georgia World Congress Center
Atlanta, Georgia, USA
www.papercon.org
MAY 3-6, 2015
International Pulp Week
Pulp and Paper Products Council
Fairmont Hotel Vancouver
Vancouver, British Columbia, Canada
www.internationalpulpweek.com
MAY 6, 2015
28th Annual Global Forest & Paper
Industry Conference
PwC
Fairmont Hotel Vancouver
Vancouver, British Columbia, Canada
www.pwc.com
MAY 11-14, 2015
Pulp and Paper Reliability and
Maintenance Conference
IDCON
The Conference & Event Center
Niagara Falls, New York, USA
www.pprm.net
JUNE 10-13, 2015
PACWEST Conference
Western and Pacific Coast PAPTAC Branches
Fairmont Chateau
Whistler, British Columbia, Canada
www.pacwestcon.net
JUNE 22-25, 2015
International Conference on
Nanotechnology for Renewable Materials
TAPPI
Hyatt Regency Atlanta
Atlanta, Georgia, USA
www.tappi.org
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PaperAge J A N U A R Y / F E B R U A R Y 2 0 1 5
15
market grade
Containerboard Outlook Spurred By
Box Data, but New Capacity a Worry
In late 2014 box shipments improved for three consecutive months during a typically
slow period following several months of sluggish demand. While it may only be a short
term blip if demand has improved it would be welcome news. New capacity continues
to be a nagging worry that could pull down prices if producers don’t manage supply
but the overall outlook remains positive.
By Harold M. Cody
U
ntil recently, discussions
Inventories fell and ended
about the state of
November at 3.6 weeks
the containerboard
of supply.
market would often center
Three consecutive months
on worries about a surge in
of growth in corrugated
new board capacity in North
container shipments was
America. New tonnage from
unexpected, particularly
several conversions plus new
given the time of year, and
capacity being added over a
was welcome news to say the
two-year period has cast
least. Leading up to this most
doubt about the direction
observers had been focused
of the market this year. The
on whether the market would
concern obviously is that
slip over this seasonally slow
oversupply would tip the
period. Nevertheless, the jury
An uptick in box shipments began in September as
balance in the market away
is still out on the significance
shipments surged 6.6% vs. the prior year and were
from producers over to buyers.
of these data as it may simply
up 1.5% on an average week basis.
But at least for a while
be a short term spike.
the discussion took a turn in direction following a surge in
However, it’s also possible that the surge is in line with recent
box shipments in late 2014 that brought a bit of excitement
strength in the economy and thus growth could continue.
and hope to the sector. The uptick began in September as
The economy appears to have stepped up a notch based on
shipments surged 6.6% vs. the prior year and were up 1.5%
several factors such as growth in industrial production of
on an average week basis. Thru the first nine months of the
nondurables, improved consumer confidence indicators, and
year shipments are up 0.4%. Total containerboard production
a drastic drop in energy prices. GDP growth, at 5% in the
jumped 4.7% and was up 0.7% for the year while containerthird quarter of 2014, was the strongest gain posted in 11
board inventories fell by 54,000 tons vs. the prior month.
years. It’s possible in turn that box use could pick up from
The September surge was followed by consecutive gains
recent flat levels.
in October and November. November shipments were down
Other news also makes it clear not everything is on track
on an actual basis but up 3.6% on an average week basis bringing
for 2015. Prices were under some pressure through the fall
year to date shipments up 0.4% on an average week basis.
and into early 2015 despite the improved box plant data in
16
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
market grade
“ Linerboard exports remain a key pressure release value for U.S. mills
as producers are able to divert tonnage from domestic markets in
order to sustain a balanced market in North America. ”
part because recycled board prices have fallen relative to
virgin grades. As a result, the major integrated mills, i.e.
Kraft mills, were under increasing pressure to lower prices
to avoid losing market share. Kraft liner prices in the east
are reported in the $600/ton range. Lower energy and fiber
costs are a key factor behind the decline.
New Capacity
The other factor, as noted, is a major surge underway in
containerboard capacity. This is a particularly noteworthy
since the predominant trend for years has been the shutdown of capacity. More than 925,000 tons of new capacity
entered the North American containerboard market in
2013 via new capacity and conversions from grades such
as newsprint. Another 750,000 tons of capacity or more
was expected to hit the market in 2014 and an additional
360,000 tons of new capacity will come online during 2015.
A range of projects large and small that total over two
million tpy have or will startup over the 2013 to 2015
period. This is a gain of over 5% and it is probably somewhat understated owing to swing capacity for paper. Major
projects include the conversion of two newsprint machines
to containerboard (SP Fiber and Atlantic Packaging), a new
recycled linerboard mill by Norampac in New York and SP
Fiber’s ongoing conversion to linerboard in Newburg, OR.
Pratt Industries is building a new 350,000 tpy recycled
containerboard mill in Valparaiso, IN and PCA planned to
startup its 350,000 tpy conversion at the DeRidder mill in
late 2014.
And finally, IP said it would restart a liner machine at its
Valliant, OK mill late this year adding about 360,000 tpy of
containerboard although the net will be less as IP stated it
will reduce capacity at other mills to offset about half of the
new capacity.
Strong Export Market
In contrast to concerns about supply, other factors continue
to support a solid market outlook including continued
strength in the export market. Linerboard exports remain
a key pressure release value for U.S. mills as producers are
able to divert tonnage from domestic markets in order to
sustain a balanced market in North America. The strength
in exports continued despite a recent uptick in the value of
the U.S. dollar which rose to a two-year high last fall against
the Euro.
Liner production for export in November jumped nearly
10% resulting in a gain of almost 9% year to date. Export
prices have been a bit mixed but posted gains in Europe
during the third quarter of last year. The price increase
helped offset the drop in dollar return on sales to U.S. mills
that had fallen due to the surge in the dollar.
The export market is fragmented, however. Kraft liner
exports to Central America remains solid, up over 3% through
July, including a surge of 10% to Mexico. Exports to Asia
remain good while shipments to Europe were up 5.3%.
However, new capacity coming on stream in Mexico could
slow tonnage going over the border and shipments to South
America were weak.
Cautious Optimism
The bottom line is that the 2015 outlook appears promising,
but the range of possible outcomes seems to be wider than
normal. If box demand has in fact shifted gears to a somewhat
higher level following several years of flat growth following
the recession it would certainly support the case for 2015
being a notable year. But at the same time the question of
the impact of new capacity lingers and whether it might
lead to a slip in prices. This is a particular concern during
the early part of 2015 when prices often slip historically.
Falling costs are also likely to continue to favor recycled
grades, which may also maintain pricing pressures.
However, if exports remain solid and the U.S. economy
keeps humming, the containerboard industry’s track record
of managing supply has been such that I wouldn’t want to
bet against them. Producers have shown the ability to sustain
market balance either via selective downtime or capacity
curtailments. It’s shaping up to be a very interesting year no
matter what. n
Harold Cody is a contributing writer for PaperAge. He can be
reached by email at: [email protected].
PaperAge J A N U A R Y / F E B R U A R Y 2 0 1 5
17
heads up
What the Industry is Thinking
About
By David Price
A number of industry conferences rounded out the year here in
Europe and the speakers’ presentations gave me a general idea
of what industry leaders are thinking.
A
lthough there were far
too many topics to list
here, the year-end paper
and forest products industry
conferences hit on five themes
that caught my attention:
continued overcapacity,
skepticism over the rush
into biofuel, the impact of
digital technology may
possibly be slowing, more
planning and less reaction,
and Russia.
place in the industry for
biofuel as mills have been
using the stuff for years
for CHP (Combined Heat
and Power) and other
generative purposes.
However, a German
executive said, “We are
papermakers not energy
companies. I don’t sit in
conference with Arab and
Russian oil companies, we
don’t have tankers or fuel
storage depots. If we can’t
The underlying truth is that there
Overcapacity in Europe
make money from paperremains serious overcapacity in
The talk was of capacity cuts
making how can we make
in Europe by UPM, Stora
Europe in publication paper grades.
money from energy? . . .
Enso, SCA and Spain’s ENCE.
especially now that the
UPM, for one, plans to close four machines in Finland, two
price of that commodity is falling through the floor!”
in France, and one in the UK, cutting 805,000 tpy of news I’m reaching a point where I am being convinced by both
print, SC paper, and coated mechanical, with the loss of 550
supporters and opponents of the biofuel trend and right
jobs. UPM’s closures will take place at the end of March.
now have no idea which direction to follow
It will also shift major supply chain and order fulfillment
Digital Impact
operations to Augsburg and Dorpen in Germany. The proAt one of the conferences was a speaker from the UK’s
cess is called ‘profit improvement targets’ but the underlying
Royal Mail. It had conducted research how print mail and
truth is that there remains serious overcapacity in Europe in
email work together. The results were surprising:
publication paper grades.
¾Email is seen as quick and informal but mail grabs
ENCE’s hardwood pulp mill at Huelva will also cease
attention and is informative
production.
¾Mail drives people to connect with business online
Biofuel
¾Sales campaigns by mail deliver more results and gain
Very little criticism was expressed publicly about the rush
market share than email
by the industry into biofuels. I blow hot and cold on this
¾86% of mail receivers connect with business
issue, but listened to German and Swedish papermakers
¾54% engage in social media
who voiced their concern in private. They agree there is a
¾78% said they get too many emails
18
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
heads up
The EU, spearheaded by the European paper and print
chain, also started a campaign in July last year called ‘Keep
Me Posted EU.’ It is a campaign promoting people’s right to
choose how they receive important information such as tax
forms, election documents, bills and statements, etc. Paper?
Digital? Both? The campaign, by the way, was inspired by
the UK campaign, ‘Keep Me Posted UK.’
The EU points out that it is not an anti-digital campaign
but a pro-choice campaign. At the root of the movement
is the fact that in 2013, 21% of European households lack
internet access.
I admit that I respond instantly to email, but in answering
a letter, especially from family or business, I take a little
more time to prepare a reply — on paper.
Prepare, Don’t React
Years ago, Pete Correll, former chairman, president and CEO
of Georgia-Pacific (1993-2005, held the position of chairman
thru June 2006), told me that “…no one plans in this industry
any more. We get a crisis, we make cuts; the crisis eases and
then we ramp up production again. This is not the way to
make money in this business. When your product leaves the
mill gate you need to know who’s going to buy it. And after
that who will be the next wave of customers?”
Interestingly, a speaker in Brussels took 40 minutes to
echo what Correll said 21 years ago in just 30 seconds.
Russia, not China!
To my surprise it was Russia, not China, as the country on
the minds of many conference-goers. As you may know,
Russia’s economy is heavily dependent on oil and gas
exports, and has taken a major hit since oil prices collapsed
more than 60 percent since last June. In addition, geopolitical
tensions in Ukraine and sanctions imposed by Western countries
have added to its problems. Although Russia’s economic
challenges were not discussed in any of the conference
forums, it was certainly a topic away from the podiums.
How long this economic downturn in Russia will continue
is anyone’s guess, and the big question for our purposes is:
How will it affect the country’s pulp and paper producers
and will it deter foreign investment in the industry? n
David Price is a contributing writer for PaperAge. He can be reached
by email at: [email protected].
PaperAge J A N U A R Y / F E B R U A R Y 2 0 1 5
19
Stora Enso is in the midst of transforming itself from a European producer of
pulp and paper into is a value-creating renewable materials company.
By John O’Brien, Managing Editor
A
s the popularity of digital media continues to grow and
demand for a number of grades of commercial printing
paper lessens as a result, paper manufacturers worldwide
have to ask themselves ‘Where do we go from here?’
Stora Enso, for one, came to grips with this difficult
quandary and decided not to simply make adjustments
to its production capacity of paper grades it deemed ‘in
decline’, and instead focused on what it considers to be
markets of the future — some of which are relatively new
to the company, but may hold great potential.
A QUICK LOOK BACK
Stora Enso traces its roots back to the Swedish copper
mining company Stora Kopparberg (“great copper mountain”)
in Falun, Sweden. According to information on a number of
websites, some historians claim Stora Kopparberg to be the
oldest existing corporation or limited liability company in
the world. The company was granted a charter from King
Magnus IV of Sweden in 1347, although the first share in
the company (granting the Bishop of Västerås 12.5% ownership of the copper mine) date back to 1288.
In 1862, Stora Kopparbergs Bergslags AB was incorporated
as a ‘modern shareholder’ company. Towards the end of the
20
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
19th century, Stora Kopparbergs diversified from copper
mining and got into pulp and paper manufacturing. In 1984,
it shortened its name to Stora AB, and in 1992 the copper
mine closed down. In 1998, Stora merged with Enso to form
Stora Enso.
The other half of the merger involved the company
formerly known as Enso-Gutzeit, whose origins date back
to 1872 when Norwegian industrialist Hans Gutzeit built
and opened a sawmill on the island of Kotka, off the southern
coastline of Finland at the estuary of the Kymi River. Around
the turn of the century, a sulfate pulp mill was built at the
Kotka site (known as Aktiebolaget W. Gutzeit & Co,) which
used the waste-wood from the sawmill. However, the most
significant event came about with Gutzeit’s acquisition of
the Finnish groundwood pulp manufacturer Enso (“Enso”
is derived from the Finnish word ensi, meaning “first”). The
deal not only expanded the company’s pulp capacity, but
also led to papermaking. In 1927, the company was officially
renamed Enso-Gutzeit.
SWEDISH-FINNISH MERGER
In late-November 1998, the European Commission authorized
the merger between Sweden’s Enso and Finland’s Stora. At
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stora enso
Stora Enso’s and Arauco’s joint
operation, Montes del Plata
Pulp Mill at Punta Pereira in
Uruguay, started up in June
2014. The pulp mill has an
annual production capacity of
1.3 million tonnes of bleached
chemical eucalyptus pulp.
that time the EC said, “The merger will create the number
one paper and board manufacturing company in the world.”
Shortly after the merger, Stora Enso made its first big
move. In February of 2000, it announced plans to buy
U.S.-based (Wisconsin) Consolidated Papers for 4.9 billion
euros, or $4.8 billion, in stock, cash and debt. At that time
Consolidated Papers was one of North America’s largest
producers of coated papers. The combined company would
arguably be the largest producer of paper and board by
capacity world-wide at some 15 million metric tonnes per
year. (Note: International Paper at that time also had a
global capacity around the 15 million tpy mark).
Stora Enso North America (SENA), as the acquired
company was called, however, faced the pressures of a
recession that took hold shortly after the deal was finalized,
along with the secular decline in demand for coated papers.
In 2007, Stora Enso decided to strengthen its focus on Europe
and announced that it would sell its U.S. coated papermaking
operations to NewPage.
NEW CEO and FOCUS
The year 2007 also marked the departure of CEO Jukka
Härmälä and the arrival of Jouko Karvinen, the company’s
new CEO. With Karvinen came a different approach to the
way Stora Enso operated and, as importantly, a re-evaluation
of the products the company produced with an eye on future
products more so than market share. Karvinen took a proactive
approach, always insisting that the company not wait for
better times to come, but to build its own better times.
Tough decisions were made including divestments, mill and
machine closures, restructuring programs and a de-layering
of the organization.
Towards the end of 2011, Karvinen announced the creation
of a group of 12 “Pathfinders” who would be tasked to
22
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
“challenge the status quo” at Stora Enso. The 12 Pathfinders
were selected from over 150 applicants through a process
open to all Stora Enso employees.
“We have promised at Stora Enso to rethink, challenge
and renew everything we do. We see a momentum in the
Group accelerating change, which is never over. And this is
where I believe the Pathfinders — a very diverse group of
Jouko Karvinen
served as CEO of
Stora Enso from
March 2007 to
August 2014 and
took a proactive
approach, always
insisting that the
company not wait
for better times to
come, but to build
its own better times.
colleagues from all regions with different amounts and types
of professional experience — can make a real difference,”
Karvinen said. “I have asked them to be direct, constructive
and brave, and to challenge everybody, including myself, the
Group Executive Team and each other.”
Selected as one of the Pathfinders, Fredrik Lundeborg,
said, “Stora Enso is facing big challenges as the world and
consumption trends are changing. Our objective is to focus
on some of these challenges and find ways to turn them into
exciting business opportunities.”
stora enso
Wood Products provides wood-based solutions for living
and housing. Its product range covers all areas of urban construction. The further-processed products include massive
wood elements and housing modules, wood components
and pellets, including a variety of sawn timber goods. Wood
Products has more than 20 production units in Europe.
Paper offers Woodfree Coated (WFC) and mechanical
grades, Newsprint and specialty grades, and Supercalendered
(SC) papers. The division’s mills are located mainly in
Europe, but also in Brazil and China. Three of the 16 mills
produce paper based on 100%-recycled fiber.
WORLDWIDE OPERATIONS
Europe. Most of Stora Enso’s sales, production capacity
In an equal joint venture, Stora Enso and Fibria
own Veracel Celulose, a 1.1 million tpy eucalyptus
pulp mill in Bahia, Brazil.
A RENEWABLE MATERIALS COMPANY
Today, Stora Enso is in the midst of transforming itself from
a European pulp and paper company into a “value-creating
renewable materials company focusing on growth markets.”
The company consists of five divisions: Consumer Board,
Packaging Solutions, Biomaterials, Wood Products, and Paper,
and has some 29,000 employees in more than 35 countries
worldwide.
Consumer Board is a global provider of high-quality boards
for printing and packaging applications. The boards are used
by brand owners for liquid packaging, food service and food
packaging, pharmaceuticals, cigarette, chocolate, cosmetics
and luxury packaging. The division operates five mills located
in Finland, Sweden and Spain. It is also expanding in growth
markets such as China, India and Pakistan.
Packaging Solutions works with converters, brand owners
and retail customers. The division operates in every stage of
the value chain, from pulp production, material and packaging production to recycling. Its containerboard mills are
located in Finland and Poland, with converting plants in ten
countries in Europe and Asia.
Biomaterials offers a variety of pulp grades to meet the
demands of paper, board, tissue, textile and hygiene products
producers. The division is focused on finding new, innovative
ways to maximize the value extractable from wood, as well
as other kind of lignocellulosic biomasses. Biomaterials
includes three Nordic stand-alone pulp mills and two Latin
American joint-venture operations.
and personnel are in Europe, where the group is a leading
producer of pulp, paper and board. Eastern and Central
Europe are important areas for the manufacturing of
corrugated packaging and wood products. Stora Enso has
faced structural issues in Europe due to overcapacity in
paper production. As a result, the company is investing
selectively in its mills with long-term potential in order to
secure a competitive cost structure and renewable materials.
Brazil. In an equal joint venture, Stora Enso and the
Brazilian company Fibria own Veracel Celulose, a 1.1 million
tpy eucalyptus pulp mill. The company has 211,000 hectares
of land, of which 90,000 hectares is planted with eucalyptus.
In addition, Stora Enso owns Arapoti paper mill jointly with
the Chilean company Arauco. The mill has the capacity to
produce 185,000 tpy of lightweight coated paper. In the
state of Rio Grande do Sul, Stora Enso owns 43,000 hectares of land, about half of which is planted with eucalyptus.
The use of CLT (crosslaminated timber) has
moved increasingly
towards urban construction,
i.e. high-rise buildings,
towers, bridges. The office
building in Italy looks like
a building made entirely
of wood. The facades are
characterized by wooden
glulam slats and interior
design is based on the
Stora Enso CLT.
PaperAge J A N U A R Y / F E B R U A R Y 2 0 1 5
23
stora enso
Uruguay. Stora Enso’s and Arauco’s joint operation, Montes
Stora Enso’s other operations in China include a 245,000
tpy coated fine paper mill in Suzhou, a 170,000 tpy uncoated
magazine paper mill at Dawang, two core factories and
majority shareholding in Inpac International, a packaging
company with production operations in China and India,
and service operations in Korea. Stora Enso also has trial
plantations in Laos.
In addition, Stora Enso and Packages Ltd. of Pakistan
in May 2013 completed the process of establishing a joint
venture called Bulleh Shah Packaging (Private) Limited.
Stora Enso’s initial shareholding is 35%. The joint venture
includes the packaging operations of the Kasur mill and
Karachi plant.
del Plata Pulp Mill at Punta Pereira in Uruguay, started up in
June 2014. The pulp mill has an annual production capacity
of 1.3 million tonnes of bleached chemical eucalyptus pulp.
Stora Enso’s share of Montes del Plata pulp is 650,000 tpy,
which is sold as market pulp.
Asia. Stora Enso is building a consumer board machine at
Beihai city in Guangxi, southern China, scheduled to be
operational in the beginning of 2016. After the board mill
is completed, the Group will construct a pulp mill at the
same site. When ready, the mill site will include a 450,000
tpy paperboard machine and pulp capacity of 700,000 tpy,
including necessary energy plant and auxiliary facilities. The
board and pulp mills will be self-sufficiently integrated with
wood supply from 90,000 hectares of self-managed plantations.
Karl-Henrik Sundström took
the helm of Stora Enso in
August of 2014 and has
continued to steer the
course of what has been
termed “growth engines of
the Group” which include
Consumer Board, Packaging
Solutions and Biomaterials.
24
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
GROWTH ENGINES
In April of 2014, Jouko Karvinen announced his desire to
leave his position as CEO after heading Stora Enso for seven
years, and in August 2014, Karl-Henrik Sundström took the
helm and has continued to steer the course of what has been
defined as “growth engines of the Group” which include
Consumer Board, Packaging Solutions and Biomaterials.
Cost and capacity adjustments have also continued. Some
of the more prominent moves in 2014 include: the shutdown
of PM 1 at Veitsiluoto Mill (Finland) removing 190,000 tpy
coated paper; an investment of EUR 110 million to convert
a fine paper machine at Varkaus Mill (Finland) to produce
containerboard; the divestment of the Uetersen specialty and
coated fine paper mill (Germany); and the sale of its Corenso
business operations to Powerflute.
On the biomaterials forefront, in June 2014 Stora Enso
acquired 100% of the shares of US-based Virdia, a leading
developer of extraction and separation technologies for
conversion of cellulosic biomass into highly refined sugars
and lignin. Then, in September, Stora Enso announced that it
will invest $43 million (EUR 32 million) in a demonstration
and market development plant to be built in Raceland,
Louisiana. The plant will be used to test the commercial
viability of Virdia’s technology to convert cellulosic biomass
into highly refined sugars.
Stora Enso’s transformation will be ongoing and challenging. However, the company has had the backbone and determination to step back and look at itself and its surroundings,
evaluate what it does and what it could do, and ask: ‘what
will consumers want in the future and how can we produce
those products?’ If it has found the answer to this question,
then it may very well be on the way to building better times
for itself. n
PAPER
Convention Daily
M
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Schedule of Events
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John Williams,
Chairman, AF&PA
Travis Mlakar,
Chairman, NPTA
C
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2
4
,
Paper2014 will provide a
number
of opportunities to exchange
insights, gain new perspectiv
es and
expand networks with fellow
paper
industry executives.
We hope you are joining
us at this
afternoon’s Industry Leadership
Session, where five CEOs will
provide
their unique perspectives
on issues
of importance to the paper
industry, and the Paper2014
Reception
immediately following
where we
look forward to speaking
with you.
Company suites are open
over the
next two days allowing us
to check
in with our key clients and
suppli-
2
0
1
PAP
4
The Future Success of Mail
Last year came and went
without
Congressional action on
postal reform. The financial condition
of the
U.S. Postal Service (USPS)
puts the
future of mail in jeopardy.
While
some reforms are in the
hands of
the USPS, others must be
adopted
by Congress to bring solvency
back
to the Postal Service. The
political
gridlock has resulted in
stopgap
efforts by the Postal Service
that will
result in an even greater
threat to
the long-term viability of
mail.
A Postal Service in Peril
In 2006, a lame-duck session
of Congress legislated that USPS
prepay 75
years’ worth of future retiree
health
benefits over the following
ten
years. As a result, a law designed
to
keep the Postal Service solvent
over
the long-term is bankruptin
g it. In
the past six years USPS has
incurred
$41 billion in net losses,
including
$32 billion for the aforement
ioned
prefunding requirement.
The USPS has been executing
its
five-year financial improvem
ent
ers and connect with existing
and
potential business contacts.
Paper2014 will provide a
number
of opportunities to exchange
insights, gain new perspective
s
and expand networks with
fellow
paper industry executives.
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3/10/14 11:13 AM
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incentiv nts contines and
(conti
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page 13)
On behalf of the American
Forest &
Paper Association (AF&PA)
and the
National Paper Trade
Association
(NPTA), we are honored
to welcome
you to Paper2014.
This annual event is where
our
industry meets.
Thank you for joining
us at
Paper2014. We look forward
to
exchanging, expanding and
experiencing with you.
John Williams is President
& CEO
of Domtar; and Travis
Mlakar is
President, Millcraft.
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Place an ad in the Paper2015 Convention Daily
Due to comprehensive networking of Paper2015
attendees, the Paper2015 Convention Daily offers
a unique advertising opportunity for:
The Paper2015 Convention Daily will be
distributed to all attendees at the convention
and feature editorial content such as:
• Pulp producers
• A
complete, up-to-date schedule
of meetings and activities
• Paper manufacturers
• Tissue manufacturers
• Paperboard producers
• Paper converters
• Paper merchants
• Suppliers of equipment and service
• Program reviews
• Session reports
• Industry news and statistics
•
Hospitality suite locations and
contact information
Paper2015 will take place in the
Trump Hotel Chicago, March 15–17, 2015
For further information on advertising opportunities in the
Paper2015 Convention Daily, please contact:
Mike O’Brien, Publisher • O’Brien Publications, Inc./PaperAge • 20 Schofield Road • Cohasset, MA 02025-1922
Telephone: 781.923.1016 • Fax: 781.923.1389 • e-mail: [email protected]
The Paper2015 Convention Daily will be published in three separate editions (March 15, March 16, and March 17) and distributed to all attendees of the convention.
The Paper2015 Convention Daily is published by O’Brien Publications, Inc.
BUILD STRENGTH
IN YOUR TISSUE,
PAPER AND BOARD
Multifunctional strength additives enhance
strength properties, optimize furnish costs
and increase productivity.
By Harold Goldsberry
W
hen it comes to producing paper, one of the most
critical areas of optimization is the sheet strength,
which is achieved through the appropriate selection of
fibers, refining level, and dry and wet strength aids. A variety
of strength chemistries are available in the market, including
natural polymers (starch, CMC) and synthetic resins (PAM,
GPAM, PAE).
Natural polymers have been dominant in the market
due to their availability and a relatively low price. However,
synthetic strength resins have been gaining the market share
due to their unique benefits, ease of use and versatility.
The choice of a strength aid depends on a number of factors, including their effectiveness (or impact on a specific
quality parameter), the program cost, the effect on machine
runnability and productivity, ease of use, product availability
and shelf life.
Kemira offers multifunctional dry strength additives such
as FennoBond 3000 (GPAM) and FennoBond 85E (anionic
PAM), the effective permanent wet strength product line,
FennoStrength (PAE), and the unique temporary wet
strength product line, FennoRez (GPAM).
•D
ry strength aids, based on starch or polyacrylamide,
are most commonly used in both board and tissue
production.
26
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
• Permanent wet strength aids, based on polyaminoamideepichlorohydrin (PAE) resin, are limited to moisture
resistant grades such as liquid packaging, napkin and
paper towel.
• Temporary wet strength, based on glyoxalated
polyacrylamide (GPAM), is a niche application for
producing sanitary products intended for disposal
into a septic system.
Beyond reinforcing the sheet, some strength aids can play
an important role in balancing charge on fines and fibers,
providing benefits for improving efficiency of other process
and functional additives and improving sheet dewatering.
DRY STRENGTH
Dry strength additives are critical components for manufacturing of board and tissue. They provide not only the
required strength quality to paper products but can also
improve machine productivity and process efficiency.
Kemira’s FennoBond product line series includes the
entire array of water soluble, cationic, anionic and nonionic
charged formulations designed to impart dry strength
properties while improving sheet drainage and fines and
filler retention to all grades in the tissue towel market.
paper chemicals
Dry strength additives provide not only the required
strength quality to paper products but can also improve
machine productivity and process efficiency
Key features and benefits:
¾
¾
¾
¾
¾
¾
¾
improved sheet characteristics such as strength and bulk
reduced basis weight
fiber substitution
energy savings
increased machine speed
productivity gains
reduced consumption of other chemicals such as starch,
wet strength resins, and defoamers
WET STRENGTH
Kemira also offers effective permanent wet strength product
line, FennoStrength (PAE), and the unique temporary wet
strength product line, FennoRez (GPAM).
Fennostrength product line series are water soluble, highly
charged cationic, alkaline cure thermosetting polyamide resins
that impart wet tensile properties for towel, napkin, facial and
specialty grades. Benefits also include improved sheet quality
and machine production rate, less linting and fiber substitution.
Fennorez product line series are specially formulated water
soluble cationic polyacrylamide based resins that impart both
temporary wet strength and dry strength sheet properties.
Wet strength benefits include improved
sheet quality and machine production rate,
less linting and fiber substitution.
CASE STUDIES
Tissue & Towel Production
A tissue and towel producer was challenged in several ways
to achieve acceptable levels of profitability for its tissue production. The tissue grades at this mill were being produced
at above budget fiber costs due to higher than target basis
weight and higher than target softwood content. Adding to
this problem was the fact that the primary tissue grade was
stuck at 9.6-9.8 lbs basis weight versus a target of 9.2 lbs
due to strength and bulk issues. The machine at this mill
was also experiencing snapoffs at the reel during roll
changes due to marginal strength.
It is required that the tissue grades produced at this mill
exhibit no wet strength properties, even temporary.
Solution: For this application, Kemira recommended
Fennobond 711 for its ability to enhance dry tensile strength
properties while contributing no wet strength properties to
the sheet.
Results: A dosage of 3.0 – 5.0 lbs/ton of solids (1.5 – 2.5
kg/mton solids) of Fennobond 711 applied to the thick stock
PaperAge J A N U A R Y / F E B R U A R Y 2 0 1 5
27
paper chemicals
delivered value added performance for this tissue producer.
The enhanced dry tensile strength achieved from Fennobond
711 was converted to tangible profit improvement benefits
for this mill.
Fennobond 711 strength enhancement allowed the mill
to save on fiber costs through reduction in basis weight to
the 9.2 grade target. Additionally, with Fennobond 711 the
mill was able to increase purchased hardwood by 10%, from
60% to 70%.
Fennobond 711 is now used on a commercial basis for
tissue production at this mill.
Brown Recycled Towel Production
This mill was faced with the challenge of improving machine
productivity and reducing chemical cost for high wet strength
and regular recycled brown towel production. To achieve
these results, Kemira and the mill partnered to implement a
Fennorez 110 program in brown towel production.
Solution: For this application, Kemira recommended the
use of Fennorez 110 and Fennostrength 4063.
Kemira’s Fennorez 110 dosage level was stabilized at
2.8-3.2 lbs/ton (1.4-1.6 kg/mton) solids basis.
Results: Kemira’s Fennorez 110 delivered both dry tensile
and wet tensile strength that allowed a 50-60% reduction in
PAE wet strength and the elimination of CMC in high wet
strength brown towel. This performance resulted in a 41%
total chemicals reduction for high wet strength brown towel.
In addition, approximately an 8% in savings in fiber costs was
realized. The total chemical cost for regular brown towel was
reduced by about 15%. Additionally, savings have been noted
through reduced drying energy cost.
Printing and Writing Grades
The pulp mill operation at an integrated mill site converted
from Kraft pulp production to dissolving pulp production,
meaning the mill had to purchase Kraft pulp for their coated
freesheet paper production. The paper machine operation
incurred significant speed/production losses with the
purchased baled Kraft pulp versus mill slush pulp.
Additionally, sheet quality on this machine was very
sensitive in terms of sheet formation. Many chemistries
trialed for increasing machine production failed due to
their negative effects on sheet formation.
Kemira’s FennoBond products are typically applied in the
wet end or by sheet spray application, and can be used
with virgin, recycled or mixed fibers for production of various
grades, including paperboard, fine paper and tissue.
lbs/ton solids basis (0.5 -1.5 kg/mton) was added to the
thick stock at the machine chest stock pump. This application point was a balance between drainage, drying, and
machine productivity benefits while maintaining desired
sheet formation.
Results: Fennobond 3000 delivered 30 fpm of speed
for each 1.0 lb/ton solids dosage level. Fennobond 3000
at 1.0-3.0 lbs/ton solids delivered 3-10% machine
production gain depending on grade and product dosage
level. This was achieved while maintaining sheet formation
at acceptable level. Floc intensity increased by 0.05-0.10
units with increasing dosage levels of Fennobond 3000.
However, this returned to original floc intensity number
by speeding up the machine, increasing table activity,
and/or by adding more water to the head box.
CONCLUSION
Without a doubt, strength additives play a critical role in the
production of paper and board grades. Kemira’s new developments in the strength area bring papermakers a complete
solution, allowing them to achieve not only desired quality
attributes and reduced environmental impact but also to help
improve the efficiency and economics of their processes. n
Solution: For this application, Kemira recommended
Fennobond 3000, which was being used commercially in
another mill operation producing similar grades. 1.0 – 3.0
28
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
Harold Goldsberry is Marketing Manager, Paper, Americas,
Strength Additives Product Line for Kemira. He can be reached
at: [email protected].
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Take out a classified ad and reach thousands
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Cell: (920) 915-1845
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Contact: Mike O’Brien:
781-923-1016, or email: [email protected]
Edwin X. Graf, A.P.M., LLC
•3
0+
index of advertisers
COMPANY
Aldon Company
Page
19
WEBSITE
www.aldonco.com
Buckman
2www.buckman.com
CanGlide
9www.canglide.com
ColorLok
11www.colorlok.com
Edwin X. Graf
29
IES
13www.iesclean.com
Kemira
32www.kemira.com
Paper2015
31www.paper2015.com
Papermachine Service Industries
29
Sandar Industries
Souhegan Wood Products
Thiele Kaolin Company
Valmet
9
15
5
[email protected]
www.papermachine.com
www.sandar.com
www.souheganwood,com
www.thielekaolin.com
21www.valmet.com
PaperAge J A N U A R Y / F E B R U A R Y 2 0 1 5
29
policy matters
AF&PA Advances Industry Policy
Priorities in Washington, D.C
By Donna Harman, President and CEO, American Forest & Paper Association (AF&PA)
Sixty-four new members of Congress
have arrived in Washington, D.C., and
we are putting on our most comfortable
shoes to walk the halls of Congress and
educate newly-elected and returning
Senators and Representatives about paper
and wood products manufacturing.
Our industry is one of the largest
manufacturing sectors in the country,
representing nearly 900,000 jobs and
ranking as a top ten manufacturer in 47
states with product sales of more than
$200 billion per year. Consequently, our
industry’s perspective on legislation
carries sway.
For 2015, we see opportunities
to advance our agenda on important
economic and environmental policy
issues. We believe Congress needs to
tackle issues such as regulatory and tax
reforms to unleash the power of the
U.S. economy. From new greenhouse
gas (GHG) regulations to pending air
and water regulations, we expect the
administration to accelerate its push
to finalize several new rules before
Obama’s term ends. Many of these new
rulemakings could fly in the face of our
efforts to become more efficient and
improve our global competitive position.
Work Continues with EPA
Last fall, the U.S. Environmental
Protection Agency’s (EPA) asked for
public comments on its proposed
Existing Source Performance Standards
(ESPS) for power plants, which call for
a 30 percent GHG emissions reduction
by 2030. AF&PA submitted a lengthy list
of concerns, including increased purchased
30
J A N U A R Y / F E B R U A R Y 2 0 1 5 PaperAge
electricity costs to our facilities and setting a bad precedent for how biogenic
emissions will be treated in regulations
going forward. Biomass was given some
lip service in the proposed rule, but in
the end, there was no meaningful
distinction from fossil fuels.
Fast forward to Nov. 19 when EPA
released its draft Framework for Assessing
Biogenic CO2 Emissions from Stationary
Sources. Although the framework and
accompanying memorandum say many
good things about biomass — including
recognizing black liquor as carbon neutral — we still lack full clarification on
how our industry’s use of manufacturing
residuals will be regulated. And so, our
work continues in 2015 to have EPA
fully recognize biomass-based energy
as carbon neutral in the upcoming
final ESPS for existing power plants
and revisions to the Prevention of
Significant Deterioration and Title V
permitting regulations.
Another major concern we will be
taking to Congress and the administration
is the EPA’s December 2014 proposed
ozone national ambient air quality
standards (NAAQS). This proposal calls
for tightening the standard to between
65-70 parts per billion (ppb) from the
current standard of 75 ppb. Although
the agency also acknowledged retention
of the current standard as an option for
comment, the fact that the NAAQS
have been reopened at all when the
science shows the current standard is
protective of health and the environment does not bode well. The 2008
standards have not yet been fully
implemented. We will ask the agency
to focus its attention on completing
implementation of the current standards
and to not move the goal post midgame, which will risk stranding capital
and disrupting investment planning.
While Congress and the administration
are likely to disagree over these and
other environmental policies, we expect
both will focus on an infrastructure
bill to address the nation’s crumbling
highways. This may create an opportunity for AF&PA’s long-standing transportation priority of increasing trucking
efficiency with a higher weight limit
on federal interstates. A Department of
Transportation study is expected to be
released shortly. We hope it will show
higher truck weights pose no additional
risk to safety when the trucks are outfitted with a sixth axel, and, in fact,
there is less wear and tear on the roads
because the weight is better distributed.
This would help our industry gain
efficiency when transporting our
finished products by using fewer trucks
to deliver the same amount of goods.
AF&PA isn’t waiting to hear from
Congress or the administration to advocate on our industry’s most pressing
issues. We’re proud to work on your
behalf to advocate for responsible environmental regulations as well as a
variety of other public policies that will
ensure a strong and sustainable paper and
wood products manufacturing sector
into the future. n
To learn more about AF&PA, please visit:
www.afandpa.org.
MAPPING OUR
FUTURE
REGISTER BEFORE FEBRUARY 20TH AND SAVE!
AF&PA and NPTA members receive a
10% discount on registration fees.
See the most up-to-date list of participating
paper mills and distributors at
Paper2015.com
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