Mill News

Simpson Paper completed the sale of its pulp and paper mill in Anderson, Calif., to an affiliate of Plainwell Inc., Plainwell, Mich.
   The mill manufactures pulp and coated and uncoated printing papers. Simpson announced plans to sell the mill in July, 1997.
   Plainwell acquired another Simpson mill in 1997. . .
   Greif Bros. Corp. announced the formation of the Containerboard & Corrugated Products Group. The Creative Packaging and Corrugated Container Operations have been combined into a single new operating unit, Corrugated Products & Services, within this Business Group. Also included in the Group is Containerboard Mills, Operations and Sales.
   Jerry Nolder and Bruce Miller have been named to head Corrugated Products and Services. Nolder is vice president, Manufacturing, Corrugated Products & Services, and is responsible for operations of the plants and manufacturing processes. Miller is vice president, Sales and Marketing, Corrugated Products & Services, and is responsible for sales and marketing of all products produced or sold in the plants within the new operating unit. Containerboard Mills will continue to be led by William R. Mordecai, vice president, Containerboard Sales and Marketing, and Michael A. Giles, vice president, Containerboard Mill Operations.
   Charles R. Chandler, vice chairman-Greif Brothers, commented, “Establishment of Corrugated Products & Services enables us to continue growing our converting business by producing top quality products and providing customers with the same level of service they have come to expect from Greif Bros. Corporation. As a result, we will be able to pursue strategies to sell corrugated products nationwide and support sales growth with appropriate production capabilities.”
   Greif Brothers manufactures and markets a broad variety of superior quality industrial packaging and components including steel drums, fiber drums, plastic drums and multiwall bags. The company is integrated, from its timberlands to corrugated sheet and box operations, including both virgin and recycled paper mills. . .
   Frank Dottori, president and CEO of Tembec Inc. and Jim Shepherd, president and COO of Crestbrook Forest Industries Ltd. signed a definitive agreement between Tembec and Crestbrook which calls for Tembec to acquire all of the outstanding shares of Crestbrook by way of a plan of arrangement.
   In addition, Crestbrook shareholders will receive a Contingent Value Right which may entitle the holder to receive a one-time payment on March 31, 2000 of up to a maximum of $1.50 per Crestbrook share depending upon the amount by which the average price of NBSK pulp for calendar 1999 exceeds $549 per metric ton. The current quoted price for these purposes is approximately $500 per metric ton.
   Completion of the transaction is subject to certain conditions, including receipt of the approval of Crestbrook shareholders at a meeting anticipated to be held on or about March 23, and receipt of all applicable regulatory approvals including in particular approval of the Minister of Forests under the British Columbia Forest Act.
   Champion International entered into an agreement with Bucksport Energy LLC to construct and operate a 174 megawatt, natural gas-fired turbine generator on the property of its paper mill in Bucksport, Maine. Once constructed, the turbine is expected to provide low-cost electricity and steam to the mill and result in the elimination of the use of coal as a fuel, reducing the mill’s overall air emissions by half.
   Champion and Bucksport Energy will co-own the project. Champion will own 28 percent and Bucksport Energy 72 percent. Bucksport Energy will be responsible for the design, financing and construction of the facility and for the sale of electricity from the turbine to customers in Maine and elsewhere in New England. Champion will be responsible for the day-to-day operation of the plant. Bucksport Energy is owned jointly by an American subsidiary of Hydro-Quebec International and by MEG International.
   Richard E. Olson, chairman and CEO of Champion, said, “This project is consistent with the strategy Champion announced in October, 1997 to find new ways to generate economic profit and increase shareholder value. It is an excellent example of the type of innovative approach we need to be successful over the long term in a highly competitive global market.” He added, “I believe this project helps to enhance the long-term viability of the Bucksport mill. By becoming more energy self-sufficient, we are demonstrating our strong commitment to the coated paper business and to the Bucksport mill and its customers.”
   Bucksport Energy recently benefited from a Federal Energy Regulation Commission ruling which paved the way for a competitive market for electricity in New England. With the announcement, the principal remaining step towards construction of the natural gas energy plant is to obtain financing for the project. Financing is expected to be in place early next year.
   Overall, this project is expected to contribute approximately $40 million to the Maine economy in wages and supplies for engineering and construction of the facility. All the necessary permits have been obtained by Champion and the generator is expected to start-up in October, 2000.
   Pam Person, vice chairman, Coalition for Sensible Energy, said, “Natural gas is a cleaner fuel than oil and coal and is safer than nuclear. Gas fuel will help improve the air quality in Maine. This project leverages the efficiency of gas and the efficiency of cogeneration to benefit the environment and the company.” . .
   Caraustar Industries and Paccess announced a sales/marketing agreement to provide direct access to Caraustar’s products to converters west of the Rocky Mountains.
   Grades included under the agreement include clay coated news/whiteback/kraftback, carrrier, cylinder kraft, bending and non-bending chip, clay coated two sides, coated and uncoated detergenet board, blister board and greaseproof boards.
   Paccess is a supplier of materials and converted products throughout the world. Offices include Portland, Ore.; Tacoma, Wash; Los Angeles; New York, Lugano, Switzerland; Hong Kong; Shanghai, China; Taipei, Taiwan and Jakarta, Indonesia. . .
   Willamette Industries will permanently shut down the #3 paper machine at its Kingsport, Tenn., pulp and paper mill. The machine makes 50,000 tons of coated one side paper and forms bond annually. Willamette will take a $5 million pretax charge against earnings during the fourth quarter of 1998 to account for the closure.
   The paper machine, built in 1939, is too small to effectively compete in a shrinking market. It is Willamette’s only C1S machine, and therefore not part of its core business. The on-site woodyard operation will also close because it is outdated, inefficient and expensive to maintain. Layoffs will affect 150 of the 570 employees working at the site.
   Consolidated Papers, Inc. announced a corporate commitment to the voluntary, third-party verification program established by the American Forest & Paper Association for its Sustainable Forestry Initiative. The company pledged to voluntarily align its corporate Environmental Management System to ISO 14001 international standards, and adhere to AFPA’s Environmental Health & Safety Principles Verification Program.
   President and CEO Gorton Evans commented, “This pledge places Consolidated Papers on the cutting edge of responsible forestry and environmental health and safety management practices. Several years ago, we pledged our commitment to SFI. Third-party review will extend commitment and confirm the results of internal audits of forest management efforts on our own lands, and the promotion of SFI principles on forestlands we do not own. It will demonstrate that we truly are stewards of our natural resources.”
   In November, the AFPA approved the voluntary verification program as part of its SFI program. Under this component, individual members determine their willingness to participate.
   Once that decision is made, independent consultants conduct a rigorous verification of the members’ internal documentation related to forestry practices.
   Third-party review follows an earlier decision by Consolidated, which, as part of its wood procurement practices, requires logging contractors to receive SFI core curriculum training. This program will provide training to loggers in SFI principles, Forestry Best Management Practices for Water Quality and logging safety issues. Failure to participate will seriously impact a contractor’s or purchased wood supplier’s ability to receive a pulpwood contract from Consolidated after September 1, 1999.
   Evans went on to say, “Consolidated made a commitment to sound forest management practices many years ago. For us, it began in the 1930s and has continued to the present day.
    Consolidated owns more than 330,000 acres in the United States, which includes 316,000 acres in Wisconsin, about 3,000 acres in the Upper Peninsula of Michigan, and about 13,000 acres in Minnesota. The company obtains the fiber required for its papermaking operations from these renewable forests, from private, national, state and county forests, and from sawmill byproducts and recycled paper.
   Evans also stated that Consolidated is dedicated to environmental quality, the protection of natural resources, and the safety and health of its employees and the surrounding communities. To carry forward this commitment, the company has pledged to adhere to the comprehensive code of AF&PA’s Environmental, Health & Safety Principles. . .
   Gaylord Container said it will raise the prices for linerboard and kraft paper by $50 per ton on February 1st.
   Smurfit-Stone Container said earlier in the company the company plans to raise its price by the same amount. . .
   The CanFibre Group Ltd. and Kafus Environmental Industries completed financing for CanFibre’s second AllGreen medium density fiberboard manufacturing facility now under construction at Lackawanna, N.Y.
   CanFibre received $135 million in cash and cash equivalents upon financial closing which occurred Dec. 31.
   The ALLGREEN MDF facility was funded by $90 million of non-recourse bonds underwritten by Merrill Lynch & Company of New York in association with Greenwich Capital Partners and E.C.T. Securities.
   Additionally, $25 million of non-recourse subordinated debt was purchased by Enron Capital and Trade Resources Corp., Houston; $9.5 million of equity was placed with HSB Engineering Finance Corp., Hartford, Conn.; $4.25 million of equity letter of credit were guaranteed by CanFibre and $6.75 million of equity and/or loan guarantees were provided by Kafus Environmental Industries and The Samarac Corp., controlling shareholder of Kafus.
   The Lackawanna project finance program was created, managed and brought to closing through the services of Kafus’ Boston-based Project Finance Group. The non-recourse nature of the debt is a benefit to CanFibre in that the debt is secured only by the assets of CanFibre of Lackawanna with no direct liability to CanFibre Group. . .
   Weyerhaeuser Co. announced it would close its chlor-alkali plant in Longview, Wash. as part of the long-range plan by the forest products firm to narrow its portfolio and streamline operations.
   Following closure of the plant by the end of the first quarter, Weyerhaeuser will no longer operate chemical facilities.
   The company will report a charge associated with the closure. When combined with previously announced changes to the company’s British Columbia lumber facilities and the streamlining of pulp and paper operations company-wide, this will result in an after-tax charge of approximately $45 million against fourth quarter earnings.
   Approximately 100 jobs will be eliminated by the Longview closure
   Seeking to improve its environmental performance, the Longview mill, as well as other Weyerhaeuser facilities and the pulp and paper industry, has moved away from using chlorine as the principal chemical in the pulp bleaching process. The plastics industry, the other major user of chlorine, is oversupplied in the world markets. Weyerhaeuser chose to close the facility because of current market conditions and the need to invest significant capital to ensure continued safe operation of the plant.
   Simpson Tacoma Kraft Co. permanently shut down its number three recovery boiler, the oldest boiler at its Tacoma pulp and paper mill. Since acquiring the pulp and paper mill in 1985, Simpson Tacoma Kraft has committed more than $250 million in capital for ongoing production and environmental improvements.
   Simpson completely shut down the recovery boiler in December 1998 when the mill reached a sustainable level of consumption of recycled fiber that no longer economically justified consuming raw wood in connection with its number three recovery boiler. . .