It just doesn’t add up

In an article that I wrote back in February about 3 new newsprint mills in the U.K., one of my concerns was the lack off raw material (old and over-issue newspapers & magazines) to feed these plants. Time has told a different story, witness my article of 17th. of November.

 

But for a moment I should like to return to my main concern: availability of raw material. UPM Shotton, on Deeside in North Wales, has been recognized by the Welsh Assembly for ‘Best Practice in Supply Chain Projects’, basically for all their (UPM Shotton’s) work over the past five years turning the mill from raw wood as a source of fibre, to 100% waste paper consumption, for the production of recycled newsprint. Well done UPM Shotton, an award richly deserved!

 

As part of the press release, UPM stated that they currently recycle about 30% of the UK’s household recovered paper, i.e. 650,000 tonnes per annum, in the production of 520,000 tonnes UPM News fully recycled newsprint.  Aylesford Newsprint’s 2 machines use 500,000 tonnes of waste to produce 400,000 of Renaissance recycled newsprint. Palm Paper at Kings Lynn will, it is anticipated, use up to 500,000 tonnes of that same waste material to produce 400,000 tonnes of Palm News recycled newsprint.

 

As my friends in the U.S. would say, “You do the math!” why do they leave off the ‘s’ in their abbreviation of mathematics? (And why is abbreviation such a long word?).

Thus there is no spare fibre around for Ecco or PM15 at Aylesford, though the latter would have replaced the aging PM13 ‘tis true.

 

But there is another factor to consider: until recently the U.K. exported vast quantities of waste paper to the Far East. Now I know that the market there has collapsed, and it will be a year or two before we see anything like the same figures again, if ever, and there is even talk of former customers in China etc. actually charging their former waste paper suppliers for the destruction/disposal of the waste.

 

Finally, you’ll be pleased to know, these newsprint mills are not the only users of waste newspapers and magazines. There is also AbitibiBowater’s Bridgewater Paper Company at Ellsemere Port that uses something like 200,000 tonnes for their recycled newsprint production.

As an aside, the former M-Real New Thames mill at Kemsley near Sittingbourne in Kent uses office waste, printers waste and woodfree magazine waste in their fabulous RCF (recycled fibre) plant for conversion to white office papers at the adjacent New Thames Mill (which in January 2009 will become a brown waste-paper packaging grades mill, under it’s new owners D.S.Smith’s subsidiary St.Regis who own another mill just around the corner already) and instead of simply pumping wet pulp more-or-less straight on to the paper machine (over simplification I know), are contracted to continue to supply the same recycled pulp, wet-lapped on lorries, through the Channel Tunnel to the M-Real Alizay Mill in France for the manufacture of those same papers previously made at New Thames. The logistical figures that this author has recently heard beggar belief!

And Then There Was One

“…upon whose track it is expedient to follow with hurried steps, lest this history should be chargeable with inconstancy, and the offence of leaving its characters in situations of uncertainty and doubt…” Charles Dickens, The Old Curiosity Shop)

 

In an earlier article, ‘New U.K. Recycled Newsprint Mills’  – February 9^th. 2008 – I spoke of my scepticism about the possibility of three new massive recycled newsprint manufactories that were scheduled to be made underway this year. My concern at that time was the genuine availability of sufficient waste material for these as well as existing users, to say naught of a proven market for the production itself. No-one expected the bottom to fall out of the financial world – or if they did they locked their money tightly down at a fixed rate of interest and watch the turmoil fall about them – which has caused so much upheaval, not least in the world of pulp and paper.

 

There were, at the beginning of 2008, new plants and machines destined for Palm Paper at Kings Lynn in Norfolk; Ecco Newsprint at Wilton, on Teeside in North-East England; and a new machine on Aylesford Newsprint’s existing site near Maidstone in Kent.

 

As is my wont, I’ll start with the last one first, Aylesford Newsprint. The new machine, PM15 will not now be built, a) because of the current financial situation and it’s knock-on effects on commerce and industry, and b) because they have only recently completed (very successfully I might add!) Project Jura, which was the almost total rebuild of the wet-end on their current leviathan, the (then) 310,000 tonnes per year 9.4 metre wide machine that “went bang” last November. Early reports were that the headbox slice had been bent but all was now well again (RISI November 27, 2006). In truth, it took the use of a 1000 tonne jack to pull the headbox back into shape. This and a few modifications allowed the machine to carry on production, short-term, but a major overhaul was required, and what an ideal opportunity to bring the machine bang up-to-date?

 

A year later (5^th –17^th. November 2007) the machine was stopped and the pre-fabricated new headbox was installed, along with numerous other bits of kit, and 68,000 engineering man-hours later, Renaissance Newsprint was again being made on a revamped machine “..now firmly in the 21^st. century.”  Please go to http://www.aylesford-newsprint.co.uk/PDFs/Project_Jura_Book.pdf and be awestruck and inspired! But the millions of pounds that project Jura must have cost, as well as the increased and improved production, coupled with a declining market and worldwide over-capacity (thank you China) meant there was no money, nor yet need, for the proposed PM15 at Aylesford. One down, two to go.

 

Ecco Newsprint have signed a 125 year lease for the land in Wilton on Teeside, and a Letter of Intent for Metso “ …to purchase a very efficient, environmentally important and highly productive PM1 newsprint line for Ecco’s new recycled newsprint mill in Teeside which is to be started up in the first quarter of 2009. The Letter of Intent includes an order to start engineering work.” But there it all grinds to a halt, it seems, although a spokesman for Ecco (not to be confused with ECO, a suffix brand name for supercalendered – ask me later — publishing grades from the embattled Norske Skog of Scandinavia) said in May of this year that “It’s taking longer than it might have, but these sort of investments are a marathon, not a sprint.”

 

But this author certainly doesn’t see any paper rolling out of the North-East during the first quarter of 2009, if at all. Metso are keeping tight-lipped too. When there is massive unemployment and lay-offs announced on a daily basis in the U.K., perhaps Ecco Newsprint should ask Britain’s Prime Minister to step up to the mark with guaranteed funding so the scheme can press ahead, with all the guaranteed jobs the build, and new mill even once completed, will provide, as well as the environmental benefits of recycling waste newspapers and magazines. Perhaps Mr. G. Brown or Mr. A. Darling (both of Downing Street, London SW1) should visit http://www.ecconewsprint.co.uk/default.htm for ideas. Of course if ‘Two Jags’ was at the helm……

 

And then there was one, and that one is Papierfabrik Palm’s English adventure which is storming ahead on an old sugar beet factory site in Kings Lynn, in Norfolk. All credit to Dr. Palm and his people for sticking to their guns and forging ahead with this wonderful off-shoot of their recycled newsprint and packaging papers based company. Their mill at Eltmann in central Germany currently produces 520,000 tonnes per year of high-grade re-cycled newsprint from waste newspapers and magazines. Kings Lynn will house a 10.6 metre (trimmed width) machine producing 400,000 tonnes per annum. And I mean that, the Kings Lynn mill WILL house that machine, the ‘topping-out’ ceremony for the buildings is scheduled for December the 11^th. of THIS year, entry by invitation only though, so that’s me and you out. But at least we can go to http://www.palmpaper.co.uk/index.php?call=home and look from a distance. There’s even a pdf gallery of progress so far worth checking out.

 

One out of three isn’t bad for a country officially in recession, AND there’s to be a new packaging grades mill built in Lancashire by SAICA of Spain. But that’s another story.

Coated paper’s coated paper, right?

No-one has taken me to task for my earlier blog comment that “..coated’s coated after all” in relation to the wonderful Mr Dermot Smurfit having a potential interest in the real-art coated business Papierfabrik Scheufelen GmbH after his brush with blade coated Fineblade (oh all right, FAB as well, but I reckon that brand killed-off the coated business at Snodland!) when Smurfit Paper owned Townsend Hook mill in Kent. My rash statement really was a baited ‘hook’ because of the whole real-art coated graphic papers subject.

 

Our cousins across the pond in North America have no concept of real-art graphical printing papers (unless they import them from Europe). Over here, throughout Europe and Scandinavia, the quality of a coated sheet has always (ninety-nine times out of a hundred) been decided by the depth of the final coating, and that it had to be applied off-machine, and usually made with extra special ingredients. In The States the quality of a grade has formerly been determined by it’s (G.E.) brightness, and the brighter a sheet, apparently, the better the quality.

 

With the addition of O.B.A.’s/F.W.A.’s (that’s Optical Brightening Agents and Fluorescent Whitening Agents to you) a grade’s brightness can go through the roof, without necessarily improving it’s quality. Then along came genetically modified chalk, P.C.C. (precipitated calcium carbonate) and even the use of titanium dioxide instead of calcium carbonate partly or completely, and all of this increases the whiteness (different to brightness but that’s for another day) but still did not automatically make a grade fit to be called ‘Real Art’.

 

As previously discussed, Job Parilux, the Phoenix range from Scheufelen, and Consort Royal from Donside in Scotland, were the market leaders. This was not to dismiss the excellent Real Art sheets Idéal from Arjo, Larius from Burgo, or Zanders Ikono, though I’m still not convinced of the latter as a real art grade.

 

Donside Paper in Scotland shut up shop in August 2001, after various owners and prospective owners in it’s dieing days, but still had considerable support from U.K. merchants Howard Smith Paper Group, who bought the Consort Royal brand name and took it to Germany to ask Dr. Scheufelen if he could merchant label their real-art for HSPG.

 

The timing was a little difficult because at about that time Scheufelen had bought-out it’s French competitor Societé Job, not for it’s fag papers (and for my American readers, that’s papers for cigarettes not homosexuals) but because of the greatly loved Job Parilux Real Art paper that they made. Subsequently the Germans closed the French mill and took all the business home with them – though what became of the cigarette papers business I know not. I have a beautiful 1920’s art nouveau poster for Job cigarette papers on my wall, and one wonders how Job got into coated papers…. I must try and look into that.

 

But with all of the Scheufelen machines stopped, albeit temporarily one hopes, and Zanders not knowing whether they are going to belong to ArjoWiggins, M-Real again, and now SAPPI, or will M-Real retain them for their new Special Papers Division, at least Burgo and Arjo have their feet firmly planted in the Real Art soil. Or have they?

 

Today, fantastic papers are available in the ‘prestige premium coated’ bracket, which used to be just a percentage point or two further down the ‘quality’ scale than the Real Art’s, yet are more competitively priced. With these grades, usually a very high quality base sheet is on-machine coated for the ‘sub’ layer, so something like the former G-Print is created (different to the new G-Print). Then the paper is re-reeled as is customary, and then played through a much slower running off-machine coater with two coating stations, and a coating colour (forgive the use of correct terminology, but it is called coating colour even if it’s only white!). Post-coating finishing will provide either a gloss, satin, or matt finish. And boy oh boy, those grades print just as well as a real art sheet.

 

Which grades? Well, take a look at Idéal from Arjo, and the more recent addition to their range: Absolut (also an excellent vodka but Stora had used the link years ago on a promotion for Chromoboard I think it was, so Arjo didn’t follow suit); Larius from Burgo; Arctic from Arctic; Accent from Vida; Condat from Condat; Creator from Creator (no, I’m joking, just to see if you are paying attention!) Creator from Torraspapel; Garda from Garda (yes it is!) which is an exquisite sheet of paper for anybody’s money; Magno from SAPPI, and so on and so on. Look on www.paperbuyersonline.com for a full choice, but make sure you mark the Europe radio button before you enter “premium quality graphical printing” and have fun from there. You will be astounded.

 

So no, not all coated papers are the same, and as for Powerflute OY taking over Scheufelen, I wish Mr Smurfit and his friends every success, I really do. I admire his business acumen, and if anyone can turn an ailing mill around, he can (witness Pankaboard and Savon Sellu if you have any doubts!). Mr. S, I take my metaphorical hat off to you.

Rip Van Winkel Awakes

Rip Van Winkel Awakes

 

I have been forced to be out of touch with the Paper Industry (still worthy of those initial capital letters) for three and a half months – and no, it was not a prison sentence! – where I was stuck in a cyber-vacuum and unable to keep in-touch with what had been going on in the trade since, well, really, the middle of July 2008. Then there was the usual catch-up period, and now I just look back on what has occurred, what is still happening, and what is about to happen (to say naught of the fallout from the first two of these) with shock and dismay.

 

What have the paper companies of Europe, nay, The World, got themselves into? There are multiple-choice answers, and for many of the mills and merchants, the boxes for more than one is going to be ticked. Of course, smug people could say “Well, I saw that coming, I’m surprised they didn’t!’, but the truth is, no-one really has the right to be smug when there are so many in the industry feeling the pain.

 

As my American friends would say, “Where to start?” For a long time now, the vast majority of pulp and paper mills have been hurting because of the massive hike in oil and purchased power. The same can be said of the chemical suppliers that furnish the industry, so their prices went up as well. The cost of living went up and up, largely on the back of rising fuel and food prices, and so staff costs went up. Imported timber (especially from Russia) went through the roof, hurting Finnish pulp producers and forcing skywards the factory gate prices for their finished (no pun intended) product, to the dreaded $1000 tonne for NBSK, and then up from there.

 

The cost of borrowing money soared, so if a mill was tied-in to a contract for improvements, expansion, or even just repair, they had to borrow at often ridiculous rates of interest if they had no money of their own. If I sat here and thought longer, the list would grow accordingly, but for now it’s enough to say that the Paper Industry, from pulp to merchant (and even printer) was already in a desperate situation.

 

Therefore, when the economic bubble burst internationally, our industry was not exempt from the effects! If of course a company was already in a pretty bad way before the global economic crisis, then they were the ones who felt it most and had to take the most drastic action, ranging from selling-off arms and legs, to committing suicide and closing up shop completely. A good example would be M-real (and I do not highlight them out of malice even if they did close one of my local fine paper mills and sell another for making cardboard box papers — though none the worse for that).

 

M-real had been heading for melt-down for some time, and had been shedding mills two or three a year for a couple of years. Then they decided to relieve themselves of their Zanders Reflex mill and it’s 4 papermaking machines and associated brands to ArjoWiggins, which was something of an unexpected new master. Truth to tell, it was not an ‘easy’ fit for Arjo, because, apart from anything else, the carbonless paper produced by Zanders (Autocopy) is a market-place competitor for that produced by Arjo (Idem) to the extent that the European Competition Authority said “No way José” – apparently unaware of the huge slice of the carbonless market in Europe enjoyed by such worthy competitive products as Giroform (Mitsubishi Hi-Tech), Reacto (Koehler), and Eurocalco (Torraspapel). Tracing papers would have been another conflict too, with Gateway and Spectral/T2000. But the E.C. put the mockers on it, just at a time when Arjo were beginning to see the way the financial world was about to turn, and I think, in truth, Arjo were pretty pleased to be out of the deal, likewise some of their own mills that might have been frightened for their future if the deal had gone ahead.

 

However, Arjo, via their merchant arm, Antalis, did buy M-reals merchant business, though again the Euro-Burghers of Brussels or Strasbourg or whichever one of the two E.C. government offices they were occupying at that time (can you really believe that they still up-sticks and move from one city to another hundreds of miles away on a regular basis? Or that the 27 European Commissioners who are there to make sure that the European Treaties on this and that are upheld, have a staff of twenty-four thousand, yes twenty-four followed by three zeros! Europhobe, moi?) that the Euro Burghers said “Non” unless Arjo sold-off one of M-real’s British merchants, Premier Paper. Arjo found a willing and worthy buyer in the family owned Beswick Paper Group, wherein Premier fits very nicely thank you, and should do well.

 

But this European Union stop on selling to Arjo was not to stop M-real in their cost-cutting efforts, and the M-real Graphical Printing Papers Division is to be bought by SAPPI, well, kind of, because M-real still want to keep Reflex and Gohrsmühle but not the coated papers that they produce (?) which I guess means that SAPPI will pick-up Chromolux, and bring them (SAPPI) back into the cast-coated market, after they got out of it when they sold the Astralux brand to Favini of Italy a few years ago.

 

Just for a moment, while on our European Grand Tour, let’s stop-off and take a quick look at Favini, and oh dear, they are in desperate trouble themselves. Both of their plants in The Netherlands have been sold off or closed, when the prospective new owners of Meersen Mill (rumoured to be Cordenons of Italy), offered a price too low for Favini’s liquidators that they said something to the effect of shove it where the sun don’t shine, and closed the place down themselves! But the loss of the Apeldoorn and Meersen mills was not enough to strengthen Favini, and it looks as if a ‘new’ company (Cordeneons and Orlando) are set to buy Favini’s mills in Italy, at Crusillano and Rossano Veneto.

 

Now it gets even more complicated because Cordenons once had a mill in Belgium that made fine papers on one machine, and one-side coated papers on another (mostly for labels and posters). In 2005 Cordenons decided to sell the latter machine and the space it took-up at the plant at Malmédy to a new company called Adapack which had taken over the Souché labels paper plant in France from International Paper (and we’ll meet I.P. again in a moment). All this happened three years ago, but Adapack went belly up early in 2008 and Cordenons bought the label paper machine back from the liquidators (well, it was just sitting there in their mill anyway!) while Souché enjoyed a management buy-out and might, just might, still make it. As for Malmedy, well, opinion differs as to whether Cordenons ever did start the ex-Adapack, ex-Cordenons machine again, but it was not running when they stopped the fine paper machine for the summer shut, and decided not to restart either machine, possibly ever again. This would make sense if they need the money they can raise from selling the Belgian site and machines, and use the funds for their stake in the Favini Italian enterprise.

 

Favini I mentioned earlier with regard to Astralux, a cast-coated grade, the brand that they bought from SAPPI who wanted to walk away from that grade, to devote all their activities at their Blackburn Mill to quality coated graphical printing paper. SAPPI had always given a glowing report for their Blackburn, Lancashire, U.K. mill, but guess what? Yep, it’s to go. Some watchers were very, very surprised at the news — after all, SAPPI had been good masters and had spent a bundle on the mill to keep it up to date, and this was reflected in the quality of the papers it produced and the place they held in the market. But those same people saw how it all made sense when it was announced at roughly the same time – which some felt in very bad taste — that SAPPI was to take over the coated papers business from M-real’s Graphical Papers Division.

 

With the closure of SAPPI Blackburn, SAPPI removes itself completely from British papermaking, especially since M-real had finally closed their British papermaking operations with the sale of Kemsley Mill to D.S. Smith, world-beating recycled fibre plant et al. Now here’s something crazy, part of the M-real deal with D.S.Smith calls for the mill to continue to produce 100% waste recycled graphical-paper quality pulp, ship it to M-Real Alizay mill in France, where it will be made into the office papers that used to be made at Kemsley. Some of these papers (the lions share initially) will be shipped back to the U.K. where the brand (Evolve) is very well established. The main merchant customer for Evolve would in the past have been the M-real merchant group, including McNaughton and Premier, but now the former is owned by Antalis, and the latter by Beswick, both of whom have established brands of their own already, one wonders what future there is for Evolve. (An inside story says that M-real have still been unable to offload the site of their former Sittingbourne Fine Paper mill because part of the deeds for the site state that because of the low-lying position of Sittingbourne, the site is responsible for the constant pumping and use/disposal of groundwater to prevent Sittingbourne high street from flooding on a regular/permanent basis. That’s fine if you are a paper-maker and use much and plenty water, but a housing estate, or a Tesco’s, or anything else, hmmm, it makes you wonder.)

 

M-real sold-off their French mill at Pont-Sainte-Maxence (formerly Mo-Do P.S.M.) a few years ago, but it has struggled ever since. I do so hope they can keep going. Most of the other former Aussedat Rey mills have gone to the wall, and even Papeteries du Lana has been bought-out by Hahnemuhle, who are no longer anything to do with Schleicher & Schuell who went to the venerable Whatman paper company of Maidstone, Kent, a couple of years ago. Ah yes, but because Whatman’s speciality is now  in clinical filtration products (and has been for years by the way which is why they bought S & S, their German competitors), they were a natural acquisition for G.E. Medical of the U.S.A. and there is talk of the historically important Whatman Springfield Mill at Maidstone being sold for what the Americans call ‘real estate’.

 

A mill of similar historical precedent was William Sommerville of Scotland, which was merged with the business of Culter Guard Bridge paper mill some years ago, I think in the days when James River, again of the U.S.A., owned them both. Then in more recent times under the management buy-out company, Curtis Fine Papers, production was centred on the one mill at Guardbridge, and now that has gone, in the blink of an eye. It was weird, because at one moment, May 2008, Curtis were announcing a wonderful new antimicrobial paper created in league with Xerox, that could kill 99.9% of any bacteria on it’s surface (the paper’s, not your photocopier) within six hours of contact, an absolute boon for hospitals and clinics, and just the latest in a line of innovative new products. Yet in July the Curtis Fine Paper administrators laid-off 180 staff at Guardbridge and closed the mill.

 

And so it goes on.

 

When I first joined the commercial papers business in the U.K. there were three grades which were revered as the best of the best, real-art, European produced graphical printing papers: Job Parilux (French), Scheufelen Phoenix (German), and Consort (Scottish). Donside at that time was part of U.K. Papers Ltd (ex.Bowaters) and closed down; Job Parilux was bought out by Scheufelen and production moved to Germany, closing the French mill, and the crash of 2008 took Scheufelen down with it after hundreds of years of family ownership, well, since 1855 anyway!

 

But all is not lost. In the midst of all this gloom and doom there is hope. Rather strangely Scheufelen has been bought by a company called Powerflute OY of Finland. This same Powerflute bought the Savon Sallu corrugated case materials mill (fluting paper) from M-real (yes, them again) several years ago, and have made such a great job of it they have the money to buy Scheufelen. Highest quality coated papers and corrugated case materials (CCM) look like strange bed-fellows, but not so much when you learn that one of the key investors in Powerflute OY (the Powerflute mill in Finland has now reverted to it’s former Savon Sallu name) is none other than the dynamic Dermot Smurfit, who a) built-up the Jefferson Smurfit Group which eventually merged with Kappa, and b) was a key player in the Smufitt purchase of England’s Townsend Hook mill, which until recent years, made CCM and quality coated graphical printing papers. Further, Mr. Smurfit’s portfolio of mills also includes Pankaboard of Finland, another ailing mill that has been turned-around. Fineblade was no Parilux, but coated paper is coated paper, right? Oh dear, I deserve to be shot at dawn for that remark, which, for the time being will be my last, other than to mourn the loss of Matussière et Forest of France and its mills Des Échelles, Papeterie de Voiron, Papeteries de Lancey, Meylan 50, 60 and 70. Will it never end?

Oh yes, while I still remember, International Paper. They have a mill in Scotland, Thomas Tait’s mill, and they are going to close it! You’ll be pleased to read, words fail me!