Thursday, May 31, 2007

EPA Requires Air Compliance for Old Town, Maine Facility - Clears Way for Possible Ethanol Production

EPA Requires Air Compliance for Old Town, Maine Facility - Clears Way for Possible Ethanol Production

Release date: 05/30/2007

Contact Information: David Deegan, (617) 918-1017

(Boston, Mass. – May 30, 2007) – EPA is taking enforcement action through an administrative order that will require Red Shield Environmental to come into compliance with federal and State air emission limits after restarting pulping operations at a former pulp and paper mill in Old Town, Maine. The order also regulates Red Shield’s efforts to extract ethanol from wood cellulose. As the facility resumes production, EPA is requiring extensive monitoring of air emissions resulting from the pulp operations.

Because the plant has been closed since March 2006, it is unclear what measures and types of control equipment will be necessary to operate in compliance with air emission limits. If necessary, Red Shield will install state of the art pollution control equipment. EPA and the Maine Dept. of Environmental Protection (DEP) will provide robust oversight to ensure that public health and environmental quality are not jeopardized while the plant proceeds with emission testing and installing any necessary controls.

Red Shield is planning to produce pulp (but not paper) at the Old Town mill. Additionally, Red Shield will be installing a new organic chemical manufacturing process to produce acetic acid and ethanol from wood cellulose, a priority of the President’s 2007 Energy Plan. Restarting the Old Town mill could create 400 jobs in an economically depressed part of the state.

Maine’s government actively supports innovative technologies to produce an alternative fuel source – ethanol. In 2006, the University of Maine received a $6 million grant from National Science Foundation to explore methods of extracting ethanol from wood cellulose. Red Shield will be installing an experimental ethanol production process developed with assistance from the University of Maine using material from the pulping process. This innovative technology is projected to reduce air emissions of methanol and "total reduced sulfur" at the mill and it is possible that the facility will be able to comply with federal and state air quality requirements without additional controls.

EPA's administrative order requires Red Shield to reach compliance with air emission requirements within 12 months at the latest, and to use best practices to minimize emissions during the interim period. After 12 months EPA will evaluate whether penalties or other actions are appropriate to address noncompliance and any excess emissions.

Tuesday, May 29, 2007

Defining China's Economy

Defining China's Economy
May 29, 2007

Since the U.S. Commerce Department imposed preliminary duties on Chinese paper imports in March, it's had a troubling question on its hands: What is China today, a market economy, or a nonmarket economy?

For over two decades, U.S. law has considered China a "nonmarket" economy. That makes sense to us, given that credit on the mainland is still largely doled out by state-owned banks, with little nod to market forces. The Party may have welcomed the creation of private companies -- and there are many -- but its grip on the levers of power remains firm.

The paper case, however, implied that Commerce thought Chinese companies, in some cases, can be evaluated as operating in a market economy. That put the Department in an awkward spot. For antidumping cases, when a U.S. firm alleges that a Chinese firm is selling at "below market" costs in the U.S., Commerce uses "surrogate" prices to estimate the Chinese company's costs. But in the case of countervailing duties, Commerce is now saying it can use Chinese prices -- implying the mainland is a market economy.

Now, Commerce is trying to mop up this mess. Last week, the Department filed a notice asking for advice on whether it "might grant market-economy treatment to individual Chinese respondents, and, if so, how this might affect our antidumping duty calculations for such enterprises."

If Commerce decides that some China firms aren't subject to surrogate price analysis, that could reduce the sting of some antidumping cases. But the fact remains that the paper case opened up a whole new world of protectionist filings, anyway, in the form of countervailing duties.

It's conceivable that Commerce could, someday, hit Chinese companies with both duties and dumping charges, a form of doublecounting. No matter how Commerce defines China, it's protectionism that's defining Washington these days.

Sunday, May 27, 2007

'bioactive' paper would detect and destroy disease organisms

Canadian-made 'bioactive' paper would detect and destroy disease organisms
Published: Wednesday, May 23, 2007 | 9:49 PM ET

TORONTO (CP) - Imagine masks and gowns for hospital workers that could detect and destroy various infectious diseases, or a paper towel that would change colour when it comes in contact with a surface contaminated with potentially deadly bacteria like E. coli.

The concept may seem futuristic, but a Canadian research and industry consortium is already working on developing such "bioactive paper" products that would home in on dangerous bacteria and viruses, then repel or deactivate them.

The Sentinel Bioactive Paper Network is comprised of researchers at 10 universities across Canada, government agencies and nine business partners that include pulp-and-paper companies.

Working with a five-year, $12-million grant from government and industry, the group hopes to develop a variety of products to decrease the threat from communicable diseases, food-borne illnesses and water contamination, while boosting Canada's forest-products industry.

The paper would be "printed" or embedded with chemicals that would recognize specific pathogens, and possibly other chemicals that would kill them, said Robert Pelton, a professor of chemical engineering at McMaster University in Hamilton and scientific director of Sentinel.

Pelton, one of four Canadian scientists who came up with the bioactive paper idea, said the concept was born out of the SARS epidemic that hammered Toronto in 2003.

TORONTO (CP) - Imagine masks and gowns for hospital workers that could detect and destroy various infectious diseases, or a paper towel that would change colour when it comes in contact with a surface contaminated with potentially deadly bacteria like E. coli.

The concept may seem futuristic, but a Canadian research and industry consortium is already working on developing such "bioactive paper" products that would home in on dangerous bacteria and viruses, then repel or deactivate them.

The Sentinel Bioactive Paper Network is comprised of researchers at 10 universities across Canada, government agencies and nine business partners that include pulp-and-paper companies.

Working with a five-year, $12-million grant from government and industry, the group hopes to develop a variety of products to decrease the threat from communicable diseases, food-borne illnesses and water contamination, while boosting Canada's forest-products industry.

The paper would be "printed" or embedded with chemicals that would recognize specific pathogens, and possibly other chemicals that would kill them, said Robert Pelton, a professor of chemical engineering at McMaster University in Hamilton and scientific director of Sentinel.

Pelton, one of four Canadian scientists who came up with the bioactive paper idea, said the concept was born out of the SARS epidemic that hammered Toronto in 2003.

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"One could imagine health-care workers wearing disposable gowns and face masks, and it would have been better for them if perhaps these gowns and face masks were able to tell the person when they became contaminated," Pelton said Wednesday from Ottawa after a news conference to announce Sentinel's plans.

"So if you had a face mask that changed colour or gave off a smell when it came into contact with the virus, it would alert the worker that they had a problem."

Other conceptual products include food packaging that would warn grocers and consumers of salmonella or E. coli lurking in meat or produce and "dip sticks" to test for bacteria in drinking water.

"A simple application that intrigued us right from the beginning is the idea of having a very simple water filter that you could use in disaster scenarios after hurricanes and things like that just to filter water on a small scale and purify it," he said.

While systems exist for large-scale water filtration, "what would be different about a bioactive paper filter is that it would give you some indication . . . that the water it was producing was safe to drink."

Such filters could be easily air-lifted into disaster zones to help individuals immediately, whereas larger systems can take many days to arrive, he said.

Pelton predicted that simple products like bacteria-flagging paper towels could be on the market within five years, but he conceded that others - including disease-detecting masks, gowns and gloves - require much more research and would take at least a decade to develop.

Complicating marketing forecasts is the feasibility factor: each product would have to be pathogen-specific, meaning that detection chemicals would have to be identified for each health-threatening bacteria and virus before they could be incorporated into any product.

Dr. Andrew Simor, an infectious disease specialist at Sunnybrook Health Sciences Centre in Toronto, called the bioactive paper idea intriguing but ambitious.

"The SARS one is more complicated, whereas a dip stick for looking for growth of E. coli or salmonella from water is much more straightforward," he said. "If you're talking about field-testing masks that are impregnated with chemicals, you need to know not only do they work and under what circumstances . . . but also are they safe?"

Such testing would take a long time, said Simor, noting that the team of scientists assembled across the country is impressive but may need expanding to test and validate certain products.

"Even their group, I think, would acknowledge that all of this is still dreaming - but if you don't dream you can't start to address the problems."

Still, bioactive paper could be a dream product for Canada's pulp-and-paper industry, which is under duress because of intense global competition, a high loonie (which hurts exports), high energy costs and a lumber industry depressed by low U.S. housing starts.

"It's too early to say whether this is going to be a huge money-maker, but the Canadian paper industry is going through probably its most challenging time ever," said Peter Ham, vice-president of product development for the pulp group of forestry company Tembec Inc.

"Sentinel is an exciting opportunity, it's one of those things we need to take a look at because of all of these factors that we're facing and needing to look at ways to make different products than the industry has been historically making," said Ham, chairman of Sentinel's board.

"If the Canadian pulp-and-paper industry's really going to survive and thrive in the future, we're going to need to branch out into really different things."

© The Canadian Press, 2007

Paper industry targeted over environment impact

Paper industry targeted over environment impact
Reporter: Timothy McDonald
ELIZABETH JACKSON: To make paper, manufacturers often need to cut down trees, pulp the wood, and then bleach what's left.

A new report from Access Economics says making a humble sheet of A4 paper has significant environmental consequences.

The paper industry concedes that there are environmental costs, but says the industry is a relatively clean one.

Timothy McDonald reports.

TIMOTHY MCDONALD: Computers have so far failed to make the workplace paperless.

In fact, Australia consumes well in excess of one and a half million tonnes of office paper each year.

The Director of Access Economics Steve Brown says making all that clean white paper can be a dirty business.

STEVE BROWN: Paper manufacturing has got a number of dimensions to its process where it can inflict some damage on the environment, whether its through the sourcing of pulp or the emissions of greenhouse gases or other effluents into river systems.

TIMOTHY MCDONALD: Manufacturer Double-A paper commissioned Access Economics to write a report on the environmental costs of making paper.

It found that paper from the developing world usually has the biggest environmental cost.

Australian companies do better, but they often leave a bigger carbon footprint than European manufacturers, because they're more reliant on fossil fuels.

Even recycled paper incurs environmental costs, because it needs to undergo a bleaching process and it requires considerable energy to produce.

Steve Brown says it's up to the government to do something about those costs, through regulations that would see them included in the consumer price.

STEVE BROWN: If all the environmental costs were taken into account then the price of paper would actually go up between four and 39 cents a ream, depending on where you got your paper from.

One of the issues with environmental costs is that they're not often factored into the end price.

TIMOTHY MCDONALD: The Australian Plantation Products and Paper Industry Council says the environmental impact of paper is tiny when compared to other industries.

The Manager of Pulp and Paper Miles Prosser says Australian manufacturers are well regulated, and environmentally conscious.

MILES PROSSER: It's a renewable resource, plantations are grown for the purpose of paper and they're grown and re-grown. In Australia we have very high rates of paper recycling, more than 50 per cent of the fibre we use to make paper in Australia is recycled.

And any of the industries or paper mills that are manufacturing paper are very tightly controlled in terms of what can happen.

TIMOTHY MCDONALD: Environment groups say one way to reduce the impact is to consume less.

John Dee runs Planet Ark, an organisation that encourages practical steps to reduce environmental impacts.

He says that the paperless office isn't common yet, but he's now gone paperless, and he's spoken to many corporations who've done the same.

He says most companies do it because it reduces costs, but there are also environmental benefits.

ELIZABETH JACKSON: Timothy McDonald with that report.

Friday, May 25, 2007

NAPM warns of further paper price hikes in '07

NAPM warns of further paper price hikes in '07
Helen Morris, PrintWeek, 24 May 2007

National Association of Paper Merchants (NAPM) chairman Ian George has forecast further paper price increases for fine paper during 2007.

George said that papermakers and merchants must improve their bottom-line figures in order to invest in the future.

His comments follow a series of paper price rises over the past year, most recently a significant hike in March.

George said: “Further increases for 2007 cannot be ruled out as the inevitable consequences of the challenging manufacturing environment paper suppliers are operating in globally, combined with resulting
consolidation and closure of UK and European mills.

“Merchants will have little to no control over these further increases predicted for the papermaking industry.”

George acknowledged that the news would not be welcomed by many printers that are struggling to maintain any profit margin and are facing customers who continue to resist prices increases.

“There would appear to be little alternative if the paper industry is to survive, as few would argue that
current levels of profitability are not sufficient to sustain any real long-term investment,” he said.

The fundamental problem, George said, lay in the in-balance of supply and demand in Europe, combined with increasing costs.

He said that since 2000, the four largest European manufacturers of fine paper, UPM-Kymmene, Stora Enso, M-real and Sappi, had suffered significant falls in profit levels.

However, some 2.5m tonnes of capacity have been removed from the European paper market in the past 18 months. Eight mills closed in the UK in 2006 alone.

“The considered view of the NAPM is that it is preferable for the market to now see steady, measured price increases, with all parties working together to manage the inevitable in a stable and consistent way,” said George.

September 2006 mills revealed increases of 5-6%
March 2007 increases of 2.5-8%; a significant increase in pulp, raw materials and energy costs blamed for the rise

Thursday, May 24, 2007

St. Marys vital part of history – the Sault's and the Zeppas'

St. Marys vital part of history – the Sault's and the Zeppas'

Dan Bellerose
Local News - Wednesday, May 23, 2007 Updated @ 4:57:57 PM

"It's sad to think that a place with so much history, so many memories, could be closing for good after more than 100 years," said Zeppa, a retiree residing on Mark Street.

Her late father, Joseph Pohrybunk, began work at the mill no later than 1920, three years after the Lake Superior Paper Co. amalgamated with the Spanish River Pulp & Paper Mills Ltd.

Her late husband, Joseph Zeppa, worked nearly 40 years for the Abibiti Power and Paper Co., which took over from Spanish River Pulp & Paper in 1928, retiring in 1984 at about the time St. Marys Paper Inc. was launched by Chicago entrepreneur Dan Alexander.

Her son and daughter found summer employment at the mill, her son as a student worker and her daughter as a tour guide.

The 111-year-old paper mill isn't history yet.

A court-appointed receiver is currently reviewing offers for the company assets, including one from potential local suitors wanting to resume operations at the specialty papermaker, idle for about a month.

The cash-strapped, 380-worker mill underwent an unsuccessful six-month restructuring process.

"The community would be devastated if it were to close," said Zeppa.

"From what I read, it sounds like the majority of workers are too young to retire and too old to go looking for other work."

She has memories of long-forgotten Spanish River Pulp & Paper.

"I remember as a child taking hot meals for my father right into the mill itself . . . Sometimes he would give me a small container of fresh pulp I could use on school projects," she said.

"A lot of fathers from the neighbourhood (the Pohrybunk's lived in the vicinity of the mill) ended up working there."

Among her mementos from Spanish River Pulp & Paper are an engraved silver cup, company service pins, photos from company picnics, and her father's International Brotherhood of Paper Makers No. 133 badge.

"Every employee got an engraved silver cup from Patterson's Jewelers to commemorate the birth of a child, the engraving would include the child's name and birth date," said Zeppa.

Spanish River Pulp & Paper was founded in present-day Espanola, located on the Spanish River, a company town in the early 1900s.

It had a second mill in Sturgeon Falls at about the time of amalgamating with Lake Superior Paper Co., which commissioned the area's first newsprint paper machines in the summer of 1912.

One-hundred-forty-two employees from the three mills served in the armed forces during the First World War, 16 never to return.

Abitibi Power and Paper, with eight pulp and paper mills in three provinces, merged with Spanish River in 1928.

The stock market crash and ensuing Depression forced Abitibi, founded in 1914 in Iroquois Falls, into bankruptcy in 1932, but demand for newsprint kept the paper machines humming until the Second World War.

Zeppa remembers work being scarce in the Depression years, under the ownership of Abitibi Power and Paper.

"People would only be working a couple days a week but they kept people working until times got better," she said.

Zeppa herself was among more than 100 pioneering women who went to work at Algoma Steel Inc. for the last three years of the Second World War.

It marked the first time in the history of the steelmaker that women had advanced beyond clerical pools and onto the shop floor.

"There was a shortage of labour and we were replacements for the men who went off to war," said Zeppa, who got in three years as a tester and recorder in the open hearth mill.

"All the women on production jobs were let go in late 1945 when the guys started returning."

Abitibi's 56-year ownership of the Sault paper mill ended in the spring of 1984, when a consortium headed by Alexander purchased the closure-threatened mill from Abitibi Price Inc.

New ownership immediately began investing $17 million into converting the oldest of Abitibi's 13 Canadian operations from a groundwood to supercalender producer, for the more lucrative glossy publication market.

Paper machine No. 5, the current workhorse of St. Marys' three machines, was commissioned in 1988 at a cost of $145 million and bumped annual production from 120,000 tons to 220,000 tons.

Monday, May 14, 2007

Sappi’s new CEO, at last

Sappi’s new CEO, at last
Sappi captures Ralph Boëttger, a passionate aviator, and executive director at Imperial Holdings.

Barry Sergeant
14 May 2007

Sappi, the world's leading maker of fine paper and dissolving pulp, has announced the appointment of Roeloff Jacobus "Ralph" Boëttger as its new CEO, following 13 months when Sappi stalwart Eugene van As reverted to executive from non-executive chairman to fill the interregnum after the sudden, and shock, departure of previous CEO Jonathan Leslie.

On Monday Sappi also announced that Van As would retire from the board of Sappi at its annual general meeting in March 2008. Boëttger, 45, a chartered accountant by training, was at age 34 appointed CEO of Safair, and appointed the next year to the executive committee of SAFREN Limited. Since 1998 he has been with Imperial Holdings, following the acquisition of Safair; since 2002, he has been an executive director of Imperial Holdings.

The new moves at Sappi should not only resolve a period of executive instability at the group, but should also see the group continuing to capitalise on recent evidence that fortunes may at least have changed in the global forest products sector.

The sector has recorded a rotten century to date, but in the divisions, fine paper has suffered the most. In Europe, prices for coated fine paper may at last be turning around, after six years of decline. In North America, the fine paper sector has been hurt by Asian imports, but these have recently been hit by a levy, and may soon be subject to a further one.

Against this background, on March 6 last year Sappi made the shock announcement that Leslie tendered his resignation from the group with immediate effect. Leslie had joined Sappi in April 2003 from a senior position at Rio Tinto, a senior global diversified resources stock. Subsequent to leaving Sappi, Leslie re-emerged as the CEO of London-listed Nikanor, which is involved in rehabilitation of a number of material copper cobalt mines in the Democratic Republic of the Congo.

For some time, investors have been anticipating a change in Johannesburg-based Sappi's fortunes. Its latest quarterly results, released last week, appear to have justified the move in the stock's price to record highs of $18,65 a share on the New York Stock Exchange, from a low of $10,67 over the past twelve months.

Sappi reported adjusted quarterly operating income (which attempts to show like-on-like figures) for the three months to March 31 2007 (the second quarter of Sappi's 2007 financial year) of $74m, the best in four years. Sappi's results were significantly boosted by sharp increases in the price of pulp, the material derived from trees and used as the essential ingredient in papermaking.

Sappi is long of pulp in southern Africa and North America, but short of pulp in Europe. Sappi manufactures 46% of its product in Europe, 29% in North America, and 25% in southern Africa.
Given the group's global operations and exposure, Boëttger's experience in that field clearly boosted his chances of selection as new Sappi CEO, a process that was both drawn out and meticulous. At Imperial Holdings, Boëttger has been responsible for the local and international logistics operations, the aviation division and the heavy commercial vehicle distribution operations. His field of responsibility encompasses businesses operating in southern Africa, numerous European countries, the Middle East and Asia.

Friday, May 11, 2007

St. Marys down to last hope of survival; Union enters talks with potential new ownership group

St. Marys down to last hope of survival; Union enters talks with potential new ownership group

Dan Bellerose
Local News - Friday, May 11, 2007 Updated @ 6:32:04 AM

The final chapter of bankrupt St. Marys Paper Ltd., be it new ownership or liquidation, likely won't be written for a couple more weeks.

The court-appointed receiver of the Sault Ste. Marie speciality papermaker, currently reviewing expressions of interest in the company's capital assets, has confirmed he will make no recommendation before the Ontario Superior Court of Justice today for asset(s) dispersal.

Meanwhile, the Communications, Energy and Paperworkers Union of Canada (CEP), representing 335 of 380 workers in the idle mill, entered formal discussions Thursday with a potential new ownership group.

According to Cec Makowski, CEP's Ontario Region vice-president, the as-yet-unidentified buyer appears to be the cash-strapped company's last hope for survival. It submitted the only offer to continue operations by last week's tender deadline.

"Thirteen submissions were made on company assets but only one of the offers was to operate on a going-forward basis; the other dozen were some shape or form of liquidation," said Makowski.

He refused to comment on where the talks were taking place, but Sault This Week said on its website Thursday that discussions were taking place in the Sault.

The suitor entered the process late, said Makowski, with less than two weeks left in the five-week capital asset sales process.

The two parties, which have had preliminary discussions prior to Thursday, are negotiating the possibility of a contract should the bid move forward.

"It might be a long-shot, there's no certainty we can agree to terms on a new contract, but it appears this could

the last shot at saving the mill," he said.

The union believes a tentative agreement will better position the suitor's ownership bid going forward but it must come together quickly. "The clock is ticking. . . . We cannot drag things out."

The union claims to have been in discussions with several potential ownership groups since their membership's near-unanimous rejection of the company's 11th-hour offer to salvage the then five-month restructuring process seven weeks ago.

Two interested buyers, which the union says were involved in active, ongoing, discussions for more than a month, walked away.

One party pulled out less than two weeks before the tender deadline, after a month of due diligence, and the second party advised the union it was exiting on deadline day itself, said Makowski.

Meanwhile the company's court-appointed receiver, Bob Kofman, of RMS Richter LLP in Toronto, says it could be "a couple of weeks" before he finishes his review and comes forward with a recommendation on asset dispersal.

"I don't know where people got the notion that (today) was decision day on the assets," said Kofman, in a telephone interview. "We are under no obligation to appear before the court (today) . . . We will make an appearance when there is something to recommend; maybe in a couple of weeks."

The seventh report of the court-appointed monitor in the Companies' Creditors Arrangement Act process, submitted April 3, set out 5 p.m. May 4 as the deadline for tenders in the capital assets sales process while it was "further hoped that court approval of a sales transaction can be achieved by May 11."

Makowski believes Kofman's recommendation will come sooner than later, "days not weeks."

"We received 13 offers but are limiting the review to the handful that appear the most workable," he said.

He doubts potential participants, buyers or liquidators will parachute onto the scene at the last moment.

"The process states that offers had to be made by last Friday. . . . It will be a challenge for anyone who missed the deadline to get back in the process."

Whenever Kofman does make his court appearance he will make a recommendation to the presiding Superior Court Justice, who will either approve on the spot, after consultation with the secured creditors, or delay the decision no more than a few additional days for further review.

The company, declared bankrupt two weeks ago, distributed information on the capital assets sales process to more than 70 identified parties, strategic industry players, financial investors, auctioneers, liquidators and persons recommended by the various stakeholders, including CEP.

Assets were offered in nine separate packages including: papermachines, supercalenders, winders and rewinder, woodroom and groundwood mill equipment, wrap line, and 38.5 acres of land with four buildings and more than one million square-feet of various-level floor spaces.

Packaged under "other assets" were items such as spare parts, office furniture and fixtures, computer equipment, trademarks and customer lists.

St. Marys, which emerged from 19 months of bankruptcy in 1994 with its acquisition by current ownership, including a 28-per-cent minority stake by employees, is one of 11 supercalender paper mills in North America, one of five such mills in Canada.

It produces about 240,000 tons of glossy supercalender paper annually for catalogues, flyers and advertising inserts.

The mill, with nearly a decade of profitability after exiting bankruptcy, claims to have lost money each of the past three years, staggered by the surging Canadian dollar, rising energy costs and spiraling pension obligations.

The company, which terminated the vast majority of its workforce three weeks ago, has an annual payroll in excess of $25 million.

Cascades withstands perfect storm of price increase and low fibre generation

Cascades withstands perfect storm of price increase and low fibre generation

MONTREAL (CP) - Packaging company Cascades Inc. (TSX:CAS) recorded a first quarter profit after surviving a "perfect storm" that saw Asian demand dramatically boost recycled fibre costs in light of a seasonal North American slowdown in material generation.

The price of recycled fibre, which represents 75 per cent of Cascades' fibre input, more than doubled after Christmas to US$150 a tonne. It has now settled at US$90.

"Old recycled fibre, whether it be corrugated cardboard or office paper, all categories skyrocketed," president and CEO Alain Lemaire told a news conference Thursday following the company's annual meeting.

The change cost Cascades $33 million in the quarter. Yet it earned $22 million, or 22 cents a share for the period ended March 31, thanks to special items such as proceeds from the sale of a U.S. boxboard plant.

That compared with seven cents a share when it made $6 million a year earlier.

Excluding one-time items, Cascades earned $5 million in the quarter, down $1 million from 2006. The five-cent earnings were below market expectations.

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The impact of the fibre cost increase was severe because the world's ninth largest user of recycled paper consumes 2.5 million tonnes of the waste per year.

Asian demand, particularly from China, surged when producers looked to build inventory before starting up large new mills.

Analyst Pierre Lacroix of Desjardins Securities called the confluence of Asian demand and weaker North American generation a perfect storm that will weaken in the coming months.

"The results in the first quarter were impacted by one-time items or temporary factors such as waste paper price surge," he said in an interview.

"At the same time product prices are going up in boxboard, container board and tissue, so the end products are healthy, prices are rising and you have a softening of the cost pressure."

Cascades' diversified portfolio should help it confront the pulp and paper industry's ongoing challenges of weaker demand, Lemaire said.

"We are lucky to be in different sectors that will be more equal," he told reporters.

Looking ahead, Lemaire said he expects continued challenges as the company moves ahead this year, but it will focus on growing its business and keeping costs under control.

"We intend to evaluate our assets and remain on the lookout for acquisitions that allow us to reinforce our position in our best sectors," he told shareholders.

"We clearly demonstrated in 2006 that we could adapt and excel in difficult business conditions and we will continue to do so."

Cascades said it had one-time gains in the quarter, notably a $25-million gain before taxes on the January sale of its 40 per cent interest in GSD Packaging to Rock-Tenn Co. for US$32 million.

The company also benefited from its move to acquire the other half of its former joint-venture unit Norampac, Canada's largest cardboard producer, from Domtar (TSX:DTC).

But it was also hit by a boiler failure that shut down production at its coated recycled boxboard mill in Toronto.

Quarterly revenues jumped to just over $1 billion for the first time, from $818 million.

Cascades' drive to be an industry leader on the environmental front was marked last quarter by the launch of a degradable polystyrene foam tray. Popular Quebec restaurant chain St. Hubert has become among its first customers for takeout containers.

Lemaire said the company continues to prove that pushing sustainable development can also be profitable.

"If some companies rush to adopt responsible behaviour, Cascades can boast to them that it has been green for more than 40 years," he told shareholders.

Founded in 1964, Cascades produces packaging and tissue products composed mainly of recycled fibres. The company employs nearly 14.000 people at 100 mills and production centres in North America and Europe.

The board of directors declared a four-cent quarterly dividend to be paid June 14.

On the Toronto Stock Exchange, Cascades shares gained 26 cents to $11.97 in Thursday trading.

© The Canadian Press, 2007

Tuesday, May 08, 2007

NewPage reports $20M 1Q loss

NewPage reports $20M 1Q loss
Dayton Business Journal - 10:13 AM EDT Monday, May 7, 2007
Paper company NewPage Corp. posted a $20 million loss in the first quarter on lower sales.

Sales were down 6 percent to $476 million from $507 million in first quarter 2006, the company reported Monday.

The loss, however, was narrower than the $60 million loss in the same quarter last year.

Volume and price were down as the company continued to see negative effects of imports of coated paper from China, Indonesia and South Korea, said Mark Suwyn, chief executive officer and chairman.

The Dayton company filed petitions with the U.S. Department of Commerce and U.S. International Trade Commission last year seeking antidumping and countervailing taxes on coated paper imports from the three countries. Countervailing taxes help restrict international trade where imports are subsidized by a foreign country and hurt domestic producers. Dumping happens when a country exports a significant amount of goods at prices much lower than in the domestic market.

The commerce department imposed preliminary countervailing taxes on the countries in March. An answer on the dumping cases is expected this month.

"We are willing to compete with anyone in the world as long as we have a level playing field," Suwyn said.

NewPage has been planning an initial public offering since 2006 but has yet to go public. The company has about 4,300 employees, including 250 at its Dayton headquarters. The company produces coated paper at plants in Michigan, Maryland, Maine and Kentucky.

Friday, May 04, 2007

Analysis: paper

Analysis: paper
Helen Morris,, 22 March 2007

Industry braces for yet more increases, with 15% rises on the cards.

Come September, printers could be paying 15% more for paper. March has brought a rise in paper prices of up to 8% and there is no obvious sign of a let-up.

A few years ago, price rises were described as unpredictable, which some say made things worse. Now they’ve become a bi- or even tri-annual event printers have to factor in.

This month’s increase has been blamed on a fall in capacity following the closures of loss-making mills and equally rising energy and pulp costs, which have conspired to drive manufacturers to raise prices.

Many in the industry feel that the price increases will continue this year. Freddie Kienzler, managing director of Essex-based commercial printer Formara, says paper costs are certainly an important factor for any print business. He cites as an example his firm, which has already had two increases this year on business papers and one on other stocks. Kienzler adds that printers are also being warned of further increases later this year. He says: “That is potentially a 15% rise during 2007. I don’t know of any printer that can pass that 15% on to their customers.”

Prepared for worse
Alasdair Browne, managing director of trade stationery printer Abbot Print in Hemel Hempstead, agrees. He says that day-to-day, he needs to deal with the reality of the situation, and believes the price rises will continue year on year. Those tied into contracts to print a particular product over a period of time need to have put a caveat in place. “It needs to say they can then pass on the cost of a paper increase. Those that have not got this, or are unable to make their customer appreciate this, are going to suffer.”

Many believe that mills are just reacting to a decline in the market and shutting operations and switching capacity.

Browne says mills need to work at marketing and advertising paper. “We all hear of the paperless office, but nothing is being done to promote paper to the end-user and reverse this trend.”

For example, he says that carbonless is a far cheaper and quicker way of producing month-end statements for a medium-sized company than reams of blank A4 and loads of ink cartridges and this should be promoted.

He adds that he believes there is no concerted effort to respond and suggest that pre-printed is actually more cost effective and better quality. “They have something to sell, so sell it. Carbonless should be a good news story. At the very least, the mills should promote the particular product.”

Kienzler says that stability is a another issue that needs to be addressed. “How about customers who are willing to pay a little more for a service that offers something a cut above the usual. Now, that would make a change.”

But there could be light at the end of the tunnel.

One commercial printer thinks the number of increases cannot continue in the next couple of years, blaming the mills for creating an artificial shortage in order to boost prices. He says: “If they go up too much, then Far Eastern mills will all of a sudden be interested in supplying Europe again and the prices will have to fall.”

Browne says the simple answer is to help the mills pass on the costs. He would be happier with a price increase if it was part of a broader strategy that in­cluded marketing what printers and mills sell. He says: “Unfortunately, the reality is that mills will reactively cut costs and increase prices in a downturn, not proactively spend on marketing to reverse it. How many other industries have this approach and survive?”

The First Coated Paper Made With 100% Post-Consumer Waste

New Leaf Paper Sets New Environmental Standard With New Leaf Sakura 100 - The First Coated Paper Available In The U.S. Made With 100% Post-Consumer Waste

San Francisco, CA - New Leaf Paper has set a new environmental standard with the national launch of New Leaf Sakura 100, the first coated paper manufactured from 100% post-consumer waste (PCW). Most recycled coated papers in the U.S. fall well below this standard, containing only 10% to 30% PCW. New Leaf Paper set the previous standard with their product lines New Leaf Reincarnation Matte and New Leaf Primavera Gloss and Silk, made with 50% PCW and 40% PCW respectively.

New Leaf Sakura 100 is the latest in a long history of environmentally superior product innovations at New Leaf Paper, a company well respected for its leadership in driving sustainability in the paper industry. New Leaf Sakura 100 is praised for exceptional printability and detailed imagery reproduction. "Sakura 100 has a beautiful surface quality," says Jeff Mendelsohn, President of New Leaf Paper. "Designers like the sheet because of its ability to reproduce vibrant photography and graphic imagery, and printers appreciate how well it runs on press."

Environmental attributes of New Leaf Sakura 100 reflect New Leaf Paper's holistic approach to sustainability:

100% post-consumer waste, which preserves forests and reduces landfill and greenhouse gas emissions
Processed chlorine free, which helps keep rivers free of poisonous bleaching products
Designated Ancient Forest Friendly, which reflects the highest environmental standard in North America
Manufactured with 100% Green-e certified renewable wind energy, which helps reduce the nation's output of the greenhouse gases that cause global warming
Designated ANCIENT FOREST FRIENDLY, the environmental gold standard Ancient Forest Friendly represents the most comprehensive standards for environmental responsibility in the paper industry. To earn the Ancient Forest Friendly (AFF) designation, a paper must be manufactured with a high percentage of post-consumer waste and not contain any virgin fiber from old-growth, ancient or endangered forests. If there is virgin fiber in the paper, it must be both FSC certified and assessed to not originate from endangered forests. This coveted designation was created by Markets Initiative (, an organization instrumental in stimulating the market for environmentally responsible papers, which in turn has had measurable benefits to human health and the biodiversity of forests.

SOURCE: New Leaf Paper

Thursday, May 03, 2007

Tumut pulp mill expansion gets planning green light

Tumut pulp mill expansion gets planning green light

Planning approval has been given for the $450 million expansion of a pulp and paper mill at Tumut, in southern New South Wales, but there is still doubt about the project because local roads will need to be upgraded.

Visy plans to more than double the capacity of its mill is expected to create 900 jobs, 400 of them ongoing.

But a company spokesman, Tony Gray, says $24 million is needed to bring local roads up to scratch.

"The issue of roads and transport management is definitely one of the major stumbling blocks to definitely proceeding with the mill," he said.

"We have already put a lot of work into the traffic plan and we'll be attempting to minimise the number of truck movements wherever possible."

Tumut Mayor Gene Vanzella says he is also concerned about roads.

He says the expansion will put a lot of pressure on local resources.

"Last time when they built the stage one, accommodation was booked out as far as Wagga. There was buses coming in with guys from Wagga, Gundagai, Adelong, Batlow, Tumbarumba - even Talbingo was heavily booked," he said.

Tuesday, May 01, 2007

Ahead of the Bell: MeadWestvaco

Ahead of the Bell: MeadWestvaco

NEW YORK (AP) - Packaging company MeadWestvaco Corp. holds a meeting for shareholders on Monday, ahead of first-quarter results on Wednesday.

Analysts expect MeadWestvaco to report earnings 3 cents per share on sales of $1.55 billion, according to a Thomson Financial poll.

MeadWestvaco didn't fare too well in the fourth quarter, as profit declined 34 percent. Although pricing on its high-quality paperboard and productivity at its paperboard mills both improved, hefty restructuring charges offset results.

Elsewhere in the sector, paper company Bowater Inc. recently widened its first-quarter loss and missed Wall Street estimates by a wide margin. Bowater said weakness in newsprint demand and a seasonal slowdown in the coated paper market weighed on profit.

Bowater's results provided further evidence of weakness in newsprint demand and a seasonal slowdown in the coated paper market, analysts said.

Shares of MeadWestvaco declined 16 cents to $33.04 on the New York Stock Exchange on Friday, and are up 33.5 percent since a 52-week low of $24.76, hit in August.

© 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

From Bad To Worse: Newspapers' Circ Declines

From Bad To Worse: Newspapers' Circ Declines
by Erik Sass, Tuesday, May 1, 2007 8:00 AM ET

AMERICA'S FLAGSHIP NEWSPAPERS ARE STILL afloat, but their crews may want to don swimsuits soon. The Audit Bureau of Circulations posted numbers Monday showing that in the six months ending March 2007, total daily circulation fell 2.1% to 44,961,066. Sunday circ fell 3.1% to 48,102,437, compared to the same period last year.

The ABC FAS-FAX numbers follow a litany of bad industry news over the last few weeks, including weak first-quarter earnings from leading newspaper companies, and a decline in the housing market, with ominous implications for newspaper classifieds.

This marks the 17th straight year of decline for both weekday and Sunday circs; this is an industry in distress. Indeed, the latest ABC FAS-FAX numbers look almost identical to previous figures, released biannually in what has become a grim drumbeat of contraction. In the September 2006 report, daily circ fell 2.8% as Sunday circ dropped 3.4%; in March 2006 they fell 2.5% and 3.1%, respectively; September 2005, 2.6% and 3.1%; and March 2005, 1.9% and 2.5%.

As in previous years, big metro dailies took some of the biggest hits, with The New York Times down 1.9%, the Los Angeles Times down 4.2% to 815,723, The Washington Post down 3.5% to 699,130, Chicago Tribune down 2.1% to 566,827, Houston Chronicle down 2% to 504,114, Dallas Morning News down 14.3% to 411,919, the San Francisco Chronicle down 2.9%, Long Island's Newsday down 6.9% to 398,231, and The Boston Globe down 3.7% to 382,503.

These figures actually contain (relatively) good news for some of the big titles, as their percentage rate of decline appears to be slowing. In the September 2006 ABC report, the New York Times' daily circ was down 3.5%, Los Angeles Times 8%, San Francisco Chronicle 5.3% and The Boston Globe 6.7%. On the other hand, losses accelerated slightly at the Chicago Tribune and The Washington Post, increasing by about half a percentage point.

In this gloomy environment, publications that hold their own are success stories: USA Today's circ is up 0.5% and The Wall Street Journal grew 0.6%. The biggest standouts were New York City's two daily tabloids, as the New York Daily News grew 1.4% to 718,174, and the New York Post jumped a remarkable 7.6% to 724,748.

In recent weeks, the nation's biggest newspaper companies have posted weak first-quarter results, citing revenue declines due to Internet competition. In the first quarter of 2007, the New York Times Company saw print ad revenue decline 3.4%, compared to the same period last year, as total profit fell 9.9% to $54.5 million. At the Tribune Company, overall operating revenues slipped 4% to $1.2 billion and operating profit was down 16% to $181 million. Gannett saw total revenues decline slightly from $1.88 billion in 2006 to $1.87 billion in 2007, as net income fell from $235.3 million in first quarter 2006 to $210.6 million in 2007, a roughly 10.5% drop.