Diversifying into tissue

When Resolute Forest Products, headquartered in Montreal, entered the tissue market in June 2015, its decision was based on the growing tissue market and a “challenging” newsprint market, according to the company’s U.S. Public Affairs Director Debbie Johnston

“Historically, Resolute and its predecessors have been in newsprint,” a market Johnston also describes as “shrinking.” With this reality in mind, she says, it was “clear we needed to get into other growth markets.”

Growth in tissue

Resolute is building a tissue machine and converting operations at its Calhoun, Tennessee, pulp and paper mill, which the company says will be one of the most competitive and efficient tissue operations in North America. The project has a cost of $270 million, which Resolute says is its largest investment since 2010.

As of the fall of 2016, construction of the Advantage-NTT machine, the latest innovation in tissue manufacturing, had begun, with Richard Garneau, president and CEO of Resolute, saying at the time, “We are proud to have one of the most modern and flexible NTT machines, specifically designed for the retail market in North America. It is important to position ourselves as a preferred supplier to major private-label retailers by delivering the highest quality product for their store brands.”

The tissue machine is expected to start running in the first quarter of 2017. (See the sidebar, “Resolute Efficiency,” below.) However, Resolute decided to speed its entry into the tissue market by acquiring Atlas Paper Mills, Miami, a manufacturer of branded and private-label tissue products for the at-home and away-from-home markets, in November 2015.

At the time of the purchase, Resolute issued a press release that quotes Garneau as saying, “This is a step-change acquisition that provides us with an immediate position in the multibillion-dollar North American consumer tissue market. We’re following through on our strategy toward the Resolute of the future with an acquisition that capitalizes on our unique ability to capture synergies by integrating forward our U.S. market pulp assets. This acquisition also gives us immediate tissue industry experience as we work toward bringing our Calhoun tissue project online by early 2017.”

Regarding the Calhoun operation, Garneau says, “For the first time in our history, we are producing and selling products directly for the consumer market. However, we are confident that we have put the building blocks in place to be successful.”

While Resolute’s Calhoun tissue operation will use virgin fiber to produce tissue, its Atlas Paper Mills consume recycled fiber as well as virgin material. However, in both cases, Resolute says it sees opportunities to take advantage of its vertically integrated production operations.

Integrated production

Resolute owns and operates more than 40 pulp, paper, tissue and wood product facilities in the U.S., Canada and South Korea, as well as power generation assets in Canada and the U.S. With this number of facilities, Resolute says it can create a circular supplier system for itself and its acquired companies, including Atlas Paper Mills.

“One of the benefits we have with the acquisition [of Atlas Paper Mills], and that we will also have when we start our tissue production in Tennessee, is vertically integrated systems,” Johnston says.

She says this means that Resolute is supplying Atlas Paper Mills with recycled pulp from its facilities. This allows the company to control the quality of the pulp and create cost benefits for itself and its customers.

“When we’re talking about sustainability, it goes into social and economic terms,” Johnston says. “If you’re going to be a sustainable company, you’re very respectful of your environment, natural resources and how you impact them, but you also want to make sure that you support the communities you’re located in and your employees,” she continues. “You have good relationships with your employees, and you work to be financially stable because you have a responsibility to your shareholders, as well. Making recycled products adds to that sustainability commitment.”

Resolute currently purchases sorted office paper (SOP), coated freesheet, packaging grades and shredded hard cover (shredded hardcover books collected by offices, libraries and other generators after they have become obsolete or damaged) from brokers and packers for its recycled pulp mill in Fairmont, West Virginia. The West Virginia mill supplies its recycled pulp to the Atlas Paper Mills’ Hialeah, Florida, plant outside of Miami to be used in the production of its tissue products.

For 2017, the company says it plans to purchase approximately 250,000 tons of recovered fiber for its West Virginia mill.

Certified recycled content

Atlas Paper Mills began using 100-percent-recycled fiber in its tissue in 1979, says Jeff Kuenn, director of marketing and technology for the company. Atlas Paper Mills sold the tissue to away-from-home—napkins, bath tissue, kitchen towels, hand towels and facial tissue found in public spaces, such as hotel rooms and public restrooms—market suppliers before it was “in vogue,” he says. The success the company found in the away-from-home sector led it to create its Green Heritage at-home tissue product line—found at retailers for consumer use—in 2010.

“We always looked at consumers making a choice between using recycled paper that’s a lower quality just to feel good about purchasing a recycled product and using a virgin product,” Kuenn says. “So, we created a recycled product that’s made of 100-percent-recycled fiber that’s soft and premium grade, and we relieved that tension of sacrificing quality for comfort.”

Using three tissue machines and 12 converting lines, Atlas Paper Mills can produce 65,000 tons of products per year. While Green Heritage is sold directly to consumers, Green Heritage Professional serves the commercial, or away-from-home, market.

Atlas Paper Mills also creates what it calls private-label tissue for large, private retailers that sell the product under their own brand names. This includes products for the away-from-home and at-home markets, which have three grades of tissue production quality: premium, value and economy.

Premium grades represent tissue products with high levels of softness, strength and brightness. Value grades meet customer standards of quality without a high cost; and economy grades are an economically priced product that mostly appear in the away-from-home market.

Customers that purchase from Atlas Paper Mills and Resolute seek certification from Green Seal, Washington. Green Seal develops life cycle-based sustainability standards for products, services and companies and offers third-party certification for those that meet the standard.

For example, Green Seal-certified bathroom tissue must be made of 25 percent postconsumer materials, while facial tissue must contain 15 percent recycled fiber. Toilet covers must have 25 percent recycled content, and napkins, paper towels and other general purpose wipes require 50 percent postconsumer material. Most of the Atlas Paper Mills’ Green Heritage product line is Green Seal certified.

“Historically, we’ve seen [the desire to be certified] with the away-from-home market, but with retail, recycled content has always been important,” Kuenn says.

Being mindful

Sales on both the commercial and retail sides of the market are increasing for the company’s recycled tissue products, but Kuenn says the retail side is continuing to grow in terms of both recycled and virgin product sales. Kuenn says the Green Heritage line’s premium quality line, not usually seen among recycled tissue products, spikes the interest of customers.

“The green market is overall being touted and [is] more attractive to the younger generation,” Kuenn says. “The millennials are more [environmentally] conscious, but they don’t want to sacrifice quality. That’s why it’s important for Green Heritage to meet those quality needs.”

The author is assistant editor of the Recycling Today Media Group and can be reached at hcrisan@gie.net.