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Contents
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June 25, 2009
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FROM THE WIRE
TURNAROUND OF MARCAL PAPER MILLS, Elmwood Park, N.J., USA, this week won a team of attorneys the Global M&A Network's 2009 Turnaround Atlas Award of the Year for deals above $100 million. The award recognized the performance of Dallas, Texas-based law firm Haynes and Boone LLP in the complex asset purchase and reorganization of Marcal, a fourth-generation family business bought out of bankruptcy last year by Highland Capital Management, and now outperforming projections, even in a troubled economy.
Marcal was purchased out of bankruptcy in May 2008 with a transactional value of more than $184 million in assets and $149 million in liabilities. Before the close, the Highland private equity team worked for five months with Haynes and Boone to negotiate environmental settlements, obtain new labor contracts, and reject unprofitable leases and contracts. Highland leveraged its relationships to improve purchasing power and reduce costs. The post-closing turnaround plan included identifying improvement opportunities, upgrading the senior management team, and creating organizational alignment around the key drivers of value.
Marcal is currently restaging with an environmental focus to build on its 59-year heritage of being green. Since 1950 the company has used recycled paper to make its products. The new management is in the process of re-launching the Marcal brand with an environmental focus under the "Small Steps" name.
THIS WEEK'S MARKET ROUNDUP
UNCOATED FREE SHEET PRICES continue falling, but at a very modest rate, according to a report his week by Mark Wilde, senior analyst at Deutsche Bank. June saw lower prices for offset rolls, cut-size, and converting grades. Most declines were in the $5-10/ton range. Prices on 50-lb offset rolls fell $10/ton to $810-855/ton, while spot and import prices are below $800/ton. Prices on cut-size grades were down $5/ton to $1,020-$1,080/ton (still above year-ago prices), while spot and import prices are below $1,000/ton. As a result of reduced advertising and commercial printing (volumes in April were down 17.2% year to-year), and increased competition plus a shift to coated free sheet, the gap between roll and offset pricing continues to widen. The two market leaders, Domtar and IP have been taking significant downtime. May preliminary shipment data show volumes down 14.7% year-to-year and down 15.8% year-to-date, according to Wilde.
NORTH AMERICAN CONTAINERBOARD PRICES, meanwhile, remained flat in June at $540/ton, after falling $70/ton since its peak last fall, Wilde reports. Producers are showing discipline by keeping inventories increasingly lean and operating rates at historical lows, despite black liquor incentives. Export prices declined slightly ($0-15/ton), though some traders reported a pick-up in export volumes. "However, given weak domestic volumes and our estimate of 4 million tons of capacity overhang, permanent closures appear inevitable," Wilde warns.
U.S. BOX SHIPMENTS in May fell a disappointing 10.3% year-over-year on a "blended" basis, in-line with the year-to-date "blended" decline of 10.7%. Despite weak shipments, inventories declined dramatically, down 96,000 tons month-to-month. Producers, Wilde notes, continue to take extensive downtime, with an estimated 1.4 million tons taken in the second quarter (1.69 million tons in the first quarter). Smurfit recently announced three months of downtime at its 524,000-tpy Seminole mill in Jacksonville, Fla.
ATLAS PAPER MILLS, Miami, Fla., USA, has named Joseph Tadeo its president and CEO. Tadeo was previously with Scott Paper Co.'s Away-From-Home Division, and most recently was senior VP and GM of Jarden Consumer Solutions, Personal Comfort and Wellness unit, Boca Raton, Fla. Atlas has two papermaking machines and seven converting lines producing bathroom tissue, facial tissue, and paper towels from 100% recycled papers.
CASCADES INC., Kingsey Falls, Qué., Canada, has been recognized by state-owned Recyc-Québec, which issued a "level 3 performance" certificate to the company for responsible management of "residual matter" at its entire industrial complex in Kingsey Falls (six plants and 11 service units). The distinction is the highest of the ICI ON RECYCLE program that recognizes ICI establishments (Industries, Commercial, Institutions) that have attained the program's objectives. To obtain a "level 3 performance," Cascades demonstrated that it has implemented measures to reduce, reuse, recycle and manage the beneficial use of residual matter that is contained in the Québec Policy on the Management of Residual Matter (1998-2008). The "performance" level requires an 80% beneficial use of potential residual matter, and Cascades attained a 99.2% level. To date, only 179 Québec establishments have acquired a level 3 certificate and Cascades owns the only industrial complex to have received this distinction in Québec.
CATALYST PAPER, Richmond, B.C., reports that its Snowflake recycle newsprint mill in northeast Arizona, USA, will be idled for an additional 10 days in July as the black liquor tax rebate for U.S. kraft mills impacts the mill's order book. This will bring Snowflake curtailments in July to approximately 20 days with nearly 300 employees affected by layoffs. "The U.S. black liquor tax credit puts recycled paper mills at an enormous competitive disadvantage," said Richard Garneau, Catalyst president and CEO. "Snowflake makes an environmentally desirable paper product in an environmentally friendly way, but cost-efficiency cannot overcome the subsidy represented by the tax credit. It is ironic that the black liquor tax credit arose from legislation that was supposed to help the environment and now threatens the well-being of an environmentally focused enterprise. Snowflake is already operating at less than full capacity due to the weak economy. A level playing field is critical to the future of this mill." Catalyst manufactures diverse specialty printing papers, newsprint, and pulp, with a combined annual production capacity of 2.5 million metric tons. The Snowflake mill is a 100% recycled newsprint manufacturing operation and the second largest private employer in northeast Arizona.
Jérôme Grassin CENTRE TECHNIQUE DU PAPIER (CTP), Paris, France, reports that it has elected Jérôme Grassin president of its new board of directors. Grassin has an extensive paper industry background, having worked with Papeteries de Condat, at Papeterie de la Seine, as well as Stora Enso Corbehem (was also responsible for magazine paper activities for the Stora Enso Group). He also previously served as director of Copacel, of FCBA, and of CTP. Grassin succeeds François Vessiere, who has fulfilled more than two 3-year periods as CTP president. Additionally, Rémy Ruppel, R&D VP at Georgia-Pacific Europe (Kunheim-France), was elected VP of CTP's board.
ENERGY OPPORTUNITIES IN THE N.A. PULP AND PAPER INDUSTRY, a new market report available from TAPPI and BDA (Business Development Advisory), examines:
- New business and development opportunities for suppliers of energy-related equipment and services
- The potential for expanded energy production and the development of energy islands, bio refineries, and energy sales to the grid
- Regions, industry segments, facility types, and process areas that offer the best energy development opportunities
- How much and what types of fuel are consumed by segment and how this mix will change over the next five years.
INTERNATIONAL PAPER, Memphis, Tenn., USA, this week announced the expansion of its Forest Stewardship Council (FSC) Chain-of-Custody certification to include a majority of its U.S. pulp and paper mills and a number of converting facilities across its businesses. The increase gives IP the largest global FSC manufacturing platform. With its expansion, IP's FSC Chain-of-Custody certification worldwide includes three coated paperboard mills and six associated converting facilities, four pulp operations, six industrial packaging mills, seven printing papers mills and related sheeting operations, and a number of manufacturing facilities associated with the company's foodservice and Shorewood businesses.
KIMBERLY-CLARK CORP., Dallas, Texas, today announced that it will cut its worldwide salaried workforce by approximately 1,600 positions by the end of this year. The company had previously reported that it was planning to streamline its organization and that it would also accelerate its cost reduction programs, particularly for sourcing and supply chain activities. The organizational changes announced today are expected to generate annualized pre-tax savings of about $150 million. Reductions in the workforce will come from all regions and business segments of Kimberly-Clark's global operations and will primarily affect salaried and non-production jobs. The company does not plan to close any of its manufacturing facilities as part of these actions.
MOHAWK FINE PAPERS, Cohoes, N.Y., USA, reports that beginning next Wednesday (July 1) and ending December 31, 2010, it will host a fundraising event, in collaboration with the Arbor Day Foundation, to plant new trees in our nation's forests. Donations can be made at the checkout of Mohawk's new e-commerce site. For every $1 contributed, the Arbor Day Foundation will plant one new tree, and because Mohawk plans to match each dollar up to $8,000, two trees will be planted for every dollar donated. This means that 16,000 trees could be planted during the year-and-a-half event.
PHARMACEUTICAL PACKAGING demand will rise 5.3% annually to more than $47 billion globally in 2013, according to a new report by Reportlinker.com, titled World Pharmaceutical Packaging. The developed countries of Western Europe, the U.S., and Japan will continue to account for nearly three-fourths of this amount. However, China will provide the strongest growth opportunities based on rapidly expanding pharmaceutical manufacturing capabilities and the phasing-in of an extensive government program designed to upgrade the quality and integrity of nationally produced medicines. Among other major developing economies, India and Brazil will also evolve into fast-growing pharmaceutical packaging markets as drug-producing sectors are upgraded and diversified, especially in the area of generic ethical drugs.
SMURFIT-STONE CONTAINER CORP., Chicago, Ill., USA, reported today that four of its facilities received top honors and a total of 34 were recognized for outstanding safety achievement at the Pulp & Paper Safety Association's (PPSA) 66th annual Safety and Health Conference. Smurfit-Stone's Richmond-North, Va., container plant and Seattle, Wash., recycling plant were recognized with "Best One-Year Safety Record" awards for having the lowest incident rates in their categories in 2008 as defined by the U.S. Occupational Safety and Health Administration (OSHA). Both plants completed the year without any injuries. The company's Coshocton, Ohio, containerboard mill and Ft. Lauderdale, Fla., recycling plant received "Most Improved" awards for having the most improved incident rates in their categories compared with their weighted average over the previous three years. Smurfit-Stone completed its safest year in company history in 2008 by achieving a 0.94 recordable case rate (RCR), or less than one recordable injury per 100 full-time employees.
TEMBEC INC., Temiscaming, Que., Canada, this past week cancelled a planned two-week shutdown at its Skookumchuck, B.C., pulp mill due to improvements in the overall operating environment and the Canadian government's C$1 billion black liquor credit aid for its chemical pulp industry. The company had previously announced that it would begin at least two weeks of market downtime on June 29, citing not only market conditions but also the strengthening Canadian dollar, shortages of fiber, and the U.S. black liquor tax credit as key factors behind the curtailment. "While market conditions remain difficult, the recently announced Green Transformation Program and some modest improvement in pulp pricing and in fiber economics have sufficiently altered operating conditions to the point where running the mill is a better course of action," said Yvon Pelletier, executive VP. The Skookumchuck mill has an NBSK production capacity of 650 metric tpd.
paper NEWS
VERSO PAPER CORP., Memphis, Tenn., USA, has introduced Clarity, its new brand of supercalendered (SC) papers, expanding its SC product portfolio, providing SCA+, SCA, and SCB grades in a wide range of basis weights for both rotogravure and offset printing. Clarity will be produced on the No. 1, No. 2, and No. 3 paper machines at Verso's mill in Sartell, Minn. The Sartell mill is certified to both the Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) Chain of Custody standards. Verso also will offer Clarity recycled-content options. Clarity will replace Verso's Trilogy brand of SC papers.
published price increases
WHITE BIRCH PAPER CO., Greenwich, Conn., announced today it will raise the price for its 48.8g newsprint effective August 1, by $50 per metric ton. All other basis weights will be increased accordingly. White Birch is the second largest newsprint manufacturer in North America, with approximately 1.25 million metric tpy of uncoated groundwood production capacity. In addition to newsprint, White Birch produces uncoated specialty paper, directory paper and paperboard at its mills in Quebec City, Riviere-du-Loup, and Gatineau, Quebec, and Ashland, Va.
TAPPI NEWS
William H. Aiken Prize nominations
The TAPPI Research Management Committee is seeking nominations for its Research and Development Award and the William H. Aiken Prize. The $500 prize is funded by an endowment from the estate of Dr. Aiken, TAPPI President in 1967-1968 and recipient of the TAPPI Gold Medal, the association's highest honor, in 1971. He was VP of technology for the former Union Camp Corp. at his death in 1974.
The award is given for outstanding accomplishments or contributions which have advanced the technology of the paper and related industries in the field of research and development.
The nomination deadline is August 1 for both the Research and Development Award and the William H. Aiken Prize. The form for TAPPI Division Technical Awards should be used; links to either interactive or pdf versions of this form can be found on the TAPPI Division Honors page. The form will require a summary of the nominee's technical achievements, personal data (education and work history), and information about other pertinent activity (such as TAPPI activities or professional achievements in other associations). Completed forms should be sent to David Bell either by postal mail (TAPPI; 15 Technology Parkway South; Norcross, GA 30092, USA), by fax +1 770-446-6947, or by email (dbell@tappi.org).
TAPPI PRESS Sizzling Summer Sale
Here in the Northern Hemisphere it's summer, and in the Southern Hemisphere it's winter - but whatever season it is where you are, it's savings season because TAPPI PRESS is having a Sizzling Summer Sale on some great titles.
You can save 15%, 25%, or even 50% off regular prices - TAPPI members save even more! This special sales event includes some of TAPPI's most popular releases from the industry's top technical people. For example, there's the Finnish series on Papermaking Science and Technology, a salary survey report from 2007, and the Making Pulp & Paper Series.
This is content that you can review on your laptop or desktop in the comfort of air conditioning from the summer heat or gathered around a warm fireplace. But like the best things in life, it's a limited time offer: order by July 15 to get YOUR savings. Full details are online - order while quantities are available.
Call for papers in Flexible Packaging
Because India is one of the emerging leaders in the flexible packaging industry, the 2009 Flexible Packaging - Trends and Technology Developments Symposium will be held in India for the first time. The dual-located event will take place November 10-11, 2009 in Mumbai AND November 13-14, 2009 in New Delhi, India.
The symposium will be designed for professionals from all areas of the flexible packaging and converting industries. Abstracts are now being accepted on the following topics:
- New Trends in Flexible Packaging and Market Applications
- Retort and Aseptic Systems and Material Applications
- Environmental Issues and Recycling Technologies
- New Materials and Equipment Development
2010 PLACE Conference: Call for Papers
TAPPI invites all industry professionals to participate in the 2010 PLACE Conference Technical Program, April 18-21, 2010 in Albuquerque, New Mexico, USA. Full details about the Call for Papers, plus other information about the event, can be found online.
Sponsored by TAPPI's Polymers, Laminations, Adhesives, Coatings and Extrusions (PLACE) Division, this conference is tailored for attendees from all areas of the flexible packaging and converting industries. TAPPI's PLACE Division is made up of hundreds of technical professionals working in flexible packaging, laminations, adhesives, coatings, and extrusions.
Key topics for the 2010 conference include:
- advances in materials and equipment,
- product design innovations,
- new applications and how these relate to product end-use, and
- additional proposed topics
TAPPI PRESS Feature of the Week:
Troubleshooting
the Papermaking ProcessList Price: US$106
Member Price: US$161
Product Code: 0101R298
This fact-filled book by authors Jerome M. Gess and Paul H. Wilson takes the reader through the process of making paper, pointing out where interruptions can occur and where elements added to the system can cause problems in that part or subsequent parts of the papermaking process. Filled with expert commentary, this book will give papermakers and those involved in the papermaking process the specific information they'll need to understand how to track down and solve problems at their source. 2001. 165 pages, soft cover.
Order this valuable report online through our secure website; TAPPI Members receive a discount on the price. Also, check our list of new releases for other great titles from TAPPI PRESS.
Cover picture for item above can be picked up from last week
FPL hosts 6th Symposium
Date: July 14-15, 2009
Location: Madison, WI
The USDA Forest Products Laboratory in Madison, WI is hosting the 6th International Symposium: Moisture Effects on Paper, Board and Containers. TAPPI is co-hosting this informative event. The expert-led program features topics related to moisture and heat transfer, container design and performance pertaining to lifetime estimations, material characterization and selection, durability and degradation as affected by environment, and new materials, products and processing to enhance container performance.
This symposium will provide an opportunity for research and industry communities to gather and share information. This symposium is sponsored by the International Paper Physics Committee and TAPPI. Contact John Considine, Program Secretary at jconsidine@fs.fed.us to learn more. Early registration ends July 26. We hope to see you there!
EPE, IBBC will form dual event
Seamless scheduling, special registration discounts, and complementary programming make it easy and affordable to attend BOTH of the following events, which are being held consecutively at the same venue. Save these dates now!
EVENT: 2009 Environmental, Pulping & Engineering ConferenceA special bridge session open to all attendees of both events will take place on Wednesday October 14, 2009 to end the EPE Conference and begin the IBBC event. The bridge session providing additional networking opportunities and a seamless conference experience for those attending both events.
Date: October 11-14, 2009
Location: Memphis, Tennessee, USA
The 2009 EPE Conference will feature an excellent peer-reviewed technical program focusing on Innovations in Energy, Fiber and Compliance. A trade fair, Hot Topic Breakfasts, and more round out this popular event.
EVENT: 2009 International Bioenergy & Bioproducts Conference
Date: October 14-16, 2009
Location: Memphis, Tennessee, USA
The International Bioenergy & Bioproducts Conference will focus on biomass supply and demand development, technology and conversion pathways, biochemicals and bioproducts, yeasts and microorganisms, and practical biorefineries, for an in-depth look at these industry-changing technologies.
PLUS: Your customers in pulping, recycling, bleaching, biorefining, non-woods, energy, power and recovery, corrosion and materials, environmental, reliability and process control will be in Memphis looking for ways to be more productive, more effective and more valuable as employees. Make sure you're there! Excellent sponsorship opportunities let you choose either or both of these important events. Contact Lindsay Beddingfield at elbeddingfield@tappi.org or +1.334.271.3318.
DID YOU KNOW:
Individual membership in TAPPI is only $174 for the entire year! That's only $14.50 a month, less than a single tank of gas - but you'll receive information, publications, networking and leadership-building opportunities, event discounts, and other tools to fuel your career, no matter where it takes you. Join TAPPI to receive a host of valuable membership benefits, and "fill up" on new knowledge!
Call for Papers: PAPEREX 2009
Date: December 4-6, 2009.
Venue: Hotel- Le Meridian
Location: New Delhi, India
More than 450 delegates from India and abroad - including technical experts, scientists and academicians - are expected to attend this year's Paperex Conference, which has the theme "Growth and Competitiveness of Paper Industry: Strategies and Technologies."
A call for papers has been issued for the technical program. The conference scope includes the following topics:
- Future Growth of Pulp and Paper industries
- Problems and Solutions for Raw Materials- Wood, Agro-residues and Recycled fibre; Availability of Power and Water.
- Competitiveness including production of superior and novel quality of paper using Micro/Nanotechnology
- Lower energy and water usage
- Better maintenance procedures
- Technologies on New Fibreline
- Sizing and Coating with new minerals/chemicals
- Minimum/Zero-effluent Concept
- Many other topics
Invitation to Present: 2010 ICRC
TAPPI has issued a call for papers for the 2010 International Chemical Recovery Conference. The ICRC Conference, sponsored by TAPPI and PAPTAC, is held every three years and is the preeminent conference for chemical recovery technology in the pulp and paper industry. It offers an excellent opportunity to present work to an international audience at an important and respected event.
Abstracts should be submitted via email to ICRC2010@tappi.org by August 31, 2009. Authors will be notified of acceptance by October 26, 2009 and must provide a full text manuscript by January 5, 2010 for inclusion in the conference.
The theme of the 2010 conference is "Optimizing Chemical Recovery Technology for Today's Marketplace." The event will provide an update on new technologies from around the globe as well as showcase ways to improve existing technology. The Technical Program Committee has provided a list of specific topics (see the Call for Papers), but will also consider technically sound papers on any topic related to chemical recovery.
The 2010 ICRC Conference will be held March 29-April 1, 2010, in Williamsburg, Virginia, USA.
QUOTE OF THE WEEK
"Some men see things as they are and ask why. Others dream things that never were and ask why not."Do YOU have a favorite quote that you'd like to share with Over the Wire readers? We need your contributions! Email your quote suggestions, along with your name and company information, to jbottiglieri@tappi.org. We value the input of our OTW readers.
-- Robert F. Kennedy, 1925 - 1968, quoting George Bernard Shaw.
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