Green Thinking

The statistics have been discouraging in recent years regarding the number of paper mills operating in the U.S. In the late 1990s and so far this decade, paper companies have been slashing capacity, with more than 50 mills in North America shutting down from 2000 to 2003, according to Atlanta consulting firm Moore & Associates.

To open a new mill in these circumstances might seem to be a contrarian maneuver, but the leaders of SCA Tissue North America say there are sound reasons why they opened a new $240 million recycled fiber tissue mill in Barton, Ala., in 2004.

SOUTHERN EXPOSURE. Capacity cuts in the U.S. paper industry have often been made because demand for many types of paper has stabilized.

At the same time that overall demand for paper has been relatively static, though, there have been changes within the market that caused SCA North America to reposition its mill capacity.

The demographic population center of the U.S. has been moving steadily south for the past few decades. Much of SCA’s North American mill capacity, however, was in the northern U.S.

SCA North America is headquartered near Philadelphia in Eddystone, Pa., and its SCA Tissue division is based in Neenah, Wis., the site of one of the company’s tissue mills. According to SCA Tissue Division President and CEO Joe Raccuia, though, the Southeast was becoming the company’s largest and strongest market for its tissue and packaging products.

Transportation and logistics issues dictated a production shift from the North to the South. "Our Barton facility positions the company to serve our Southeast markets," says Raccuia. "Barton is the regional manufacturing platform for a 10-state area with the fastest growing demographics in the nation," he comments.

When the Barton mill came online in 2004, Don Lewis, SCA Tissue senior vice president of sales and marketing, said, "This is good news for SCA and for our customers. We are strong in Southeast markets today, and an integrated facility will create supply chain efficiencies which will ensure the highest level of service to our customers."

SCA Tissue converted the first reels of paper at its Barton mill in April of 2004, just 17 months after announcing plans to build the tissue mill in October of 2002.

At the time, Raccuia called the feat, "A remarkable team effort. SCA has gone from ‘shovel in the ground’ to cases of Barton-produced paper products on the truck in 17 months. We are very pleased with this accomplishment."

The timetable went like this: SCA broke ground on the Barton tissue facility in late October of 2002. Tissue converting operations began in April 2003; the distribution warehouse opened in December of 2003; paper production began in late March 2004. The first case of Barton-produced paper products was sold to Dee’s Paper Supply in Mobile, Ala., in early April of 2004.

The Barton mill is producing white and brown paper towels and napkins, primarily for the away-from-home market, such as restaurants, commercial office buildings, schools and hospitals. The production line features a tissue machine made by Voith-Andritz.

The company uses a variety of secondary paper grades as feedstock, according to SCA Tissue Director of Fiber Procurement David Knight, including office grades as furnish for its white towels and napkins and OCC and residential mixed paper for its brown towel products.

HUNGRY FOR FIBER. The opening of a new mill that may consume more than 100,000 tons per year of recycled fiber has meant a lot of work for Knight and the buyers who work along with him.

Knight works out of SCA Tissue’s Neenah, Wis., offices but spent a considerable amount of time in 2003 and 2004 working to secure supply lines for the Barton mill.

With the plant’s ability to accept office grades, OCC and curbside mixed paper, Knight has the ability to knock on many different types of doors. "We’re working with a pretty good variety of suppliers," he says. "Suppliers include paperstock plants and some municipalities, plus we have been working with the document destruction industry, as we see it as an evolving source of furnish."

The mill’s front-end (pre-pulping and fiber-prep) system has been designed with sufficient screening capacity to handle mixed paper and shredded grades produced by confidential shredding firms, says Knight. "Because we have a state-of-the-art cleaning system, we can handle a lot of things that other mills can’t handle," he remarks.

This designed-in ability can offer an advantage to SCA’s buyers. Knight says that curbside programs and document destruction firms produce grades with "contaminants that are small and hidden, but that are there in fairly great number—things like plastic cover sheets that accompany the scrap paper."

Knight sees the mill’s ability to pulp grades produced by document destruction firms as particularly important. "We see the document destruction industry growing by leaps and bounds," he says. "I don’t have a precise projection of what percentage of our furnish will be shredded paper, but that percentage is going to increase in the next few years," Knight ventures.

Sourcing fiber for a new mill has provided additional work for Knight and other members of the SCA Tissue North America team, which is spread out in several locations throughout the United States (plus one office in Oakville, Ontario, Canada).

The tissue mills that SCA acquired are in Flagstaff, Ariz.; Alsip, Ill., South Glens Falls, N.Y.; and Menasha, Wis. There are also converting operations in Bellemont, Ariz.; Gary, Ind.; and Greenwich, N.Y.

The ramping up of the Barton mill has prompted SCA to increase its purchasing presence in the Southeastern United States from a combination of sources, including not only document destruction firms but also municipal programs and traditional paperstock dealers.

Sourcing in the Southeast has been a little bit different, says Knight, because a high percentage of fiber is already being harvested by mill-owned recycling subsidiaries. "The biggest difference down here is the smaller number of packing plants that are owned independently," he notes. "A lot of fiber is collected by integrated mill groups with packing plants that they manage."

The domestic competition presents just one challenge. The other comes from increasingly hungry Asian buyers. "I see challenges there. The Chinese demand is growing and changing," says Knight. "Their purchasing methods are getting much more sophisticated."

The reach of Chinese buyers into the interior of the United States is also apparent to SCA North America. Knight notes that he and his buyers "compete against export containers out of Nashville, Tenn., Columbus, Ohio—really it’s anywhere, even in the Midwest."

START TO FINISH. The papermaking machinery in place in Barton is among the newest to be found in the United States. "The automation and the speed of the machines when they are in operation is pretty amazing," says Knight.