January/February 2012

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PARTYS
Chemical Prices Headed Up Nova Scotia Woes AN OFFICIAL PARTNER OF THE PULP AND PAPER TECHNICAL ASSOCIATION OF CANADA

THE

Only dissolving pulp avoids the capital spending hangover

OVER

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January/February 2012 Vol. 113, No. 1 PRINT EDITION ISSN 0316-4004

A Business Information Group Publication ON-LINE EDITION ISSN 1923-3515

THE PARTYS OVER

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COVER STORY

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CapitalExpendituresReport:ThePartysOver With such an intense burst of capital spending in 2010 and 2011, a hangover was inevitable. The capital expenditures outlook for 2012 reveals that spending on energy and efficiency projects is tapering off with the end of the Pulp and Paper Green Transformation Program in March. Dissolving pulp becomes the hot area for investment in 2012.

NOVA SCOTIA WOES

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FEATURES

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NovaScotiansCaughtBetweentheDevilandtheDeepBlueSea Government, utilities, and employees are being asked for huge concessions to keep Nova Scotia mills running. End-UsersPaythePrice Our annual chemicals market report shows that high raw material prices upstream are trickling down to users of pulp and papermaking chemicals. CollaborativeResearch Forest industry research at universities across the country is now aligned under one organization: FIBRE.

RESEARCH NETWORKING

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IN EVERY ISSUE

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January/February 2012 PULP & PAPER CANADA

EDITORIAL
EDITORIAL Editor CINDY MACDONALD 416-510-6755 cindy@pulpandpapercanada.com ADVISORY BOARD Richard Foucault Greg Hay Dr. Richard Kerekes Barbara van Lierop Dr. David McDonald Dennis McNinch Dr. Yonghao Ni Bryant Prosser Dr. Paul Stuart Ross Williams ADMINISTRATION Interim Publisher JIM BUSSIERE jim@pulpandpapercanada.com President, Business Information Group BRUCE CREIGHTON Vice President, Publishing ALEX PAPANOU Executive Publisher, Manufacturing TIM DIMOPOULOS EDITORIAL AND SALES OFFICES: 80 Valleybrook Dr., Toronto, ON M3B 2S9 Phone: 416-442-5600. Toll Free: cda 800-268-7742; usa 800-387-0273 PRODUCTION Circulation Manager CINDI HOLDER cholder@bizinfogroup.ca Market Production Manager KIMBERLY COLLINS kcollins@bizinfogroup.ca Print Production Manager PHYLLIS WRIGHT pwright@bizinfogroup.ca Reprint requests: Marisa Sementilli 416-510-6829 News and Press Releases media@pulpandpapercanada.com SALES REPRESENTATION North America: Eileen MacDonell, Publisher, Phone: 416-442-5600, ext. 3639, eileen@pulpandpapercanada.com Inside Sales and Classified Ads: Jim Bussiere, Interim Publisher, Phone: 416-442-5600, ext. 3606, Fax: 416-510-5140, jim@pulpandpapercanada.com Scandinavia and Finland: Jyri Virmalainen, Exomedia Oy, Latokartanontie 7A, 4 krs, 00700, Helsinki, Finland; Phone: +358-9-61500100; Telex 121394 tltx sf (Att: Exomedia); Fax 358-9-61500106. E-mail: jyri.virmalainen@exomedia.fi Sustaining member, Pulp and Paper Technical Association of Canada; Member, Canadian Business Press and Audit Bureau of Circulation. Indexed by: Canadian Business Periodicals Index; Abstract Bulletin, The Institute of Paper Science and Technology; Materials Science Citation Index PULP & PAPER CANADA (ISSN 03164004) is published by BIG Magazines LP, a div. of Glacier BIG Holdings Company Ltd., 80 Valleybrook Dr., Toronto, ON M3B 2S9 SUBSCRIPTION RATES: Canada $52.95 per year; $71.95 for 2 years. Outside Canada $99.95 per year. Single copy $19.50. (All subscription prices exclusive of taxes.) The editors have made every reasonable effort to provide accurate and authoritative information but they assume no liability for the accuracy or completeness of the text or its fitness for any particular purpose. All rights reserved. The contents of this publication may not be reproduced in part or in full without the consent of the copyright owner. From time to time, we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods. Phone: 1-800-668-2374; fax: 416-442-2191; e-mail: privacyofficer@ businessinformationgroup.ca; mail to: Privacy Officer, Business Information Group, 80 Valleybrook Dr., Toronto, ON M3B 2S9 POSTMASTER: Please forward 29B and 67B to 80 Valleybrook Dr., Toronto, ON M3B 2S9. Legal deposit Quebec National Library. Canada Post Publications Product Agreement No. 40069240. Canada Post Canadian Publications Mail Agreement #40069240 A Business Information Group Publication Print edition ISSN 0316-4004 On-line edition ISSN 1923-3515

Were Making Business Plans for the Bioeconomy

nyone whos been at a pulp and paper industry event in the last few years has heard countless researchers and technology providers say biorefining is the direction of the future. In 2009 and 2010, when things were tough in the traditional forest product segments, evangelism on biorefining was rampant. Everyone was encouraged to put their faith in making products for which no markets yet existed. Then, the message became more market focused. The Forest Products Association of Canada measured the value of the bioeconomy, and encouraged companies to look for the right bio-pathway. As we begin 2012, the studies, the modeling, the theories, have become reality. We have a pilot plant in Thunder Bay extracting lignin from a mills black liquor, using made-inCanada technology. We have a pilot plant in Windsor, Que., producing nanocrystalline cellulose using made-in-Canada technology. We have a tissue mill in New Westminster, B.C., producing syngas from biomass to fuel its boilers, using madein-Canada technology. And we have solid evidence, courtesy of IFIT, that the industry is ready to invest in the bioeconomy. IFIT is the Investments in Forest Industry Transformation program, a $100-million funding initiative of the federal government. The program lead, Jean-Franois Levasseur, recently reported that IFIT received 107 responses to the programs call for proposals. IFIT analyzed the proposals, and offers some stats in support of the argument that yes, the Canadian industry really is ready to put some money into the bioeconomy. The applications came from a range of forest products industry segments, and in total, requested $600 million of funding. Average project cost was $20 million, with only about 30% of the funding being requested from IFIT. About half the proposals related to bioenergy, another quarter were for wood products, and 14% were in the biochemical sector. The diversity and volume of submissions clearly shows that some of the zeal for the bioeconomy can hold up to the rigors of a Cindy Macdonald Editor business plan. 4
PULP & PAPER CANADA January/February 2012

We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund (CPF) for our publishing activities.

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INDUSTRY NEWS

Celluforce starting up one piece of equipment at a time

Large-scale production of a nano-sized material is spooling up at the Celluforce facility in southwestern Quebec. Celluforce, the joint venture between FPInnovations and Domtar, has completed construction of its new facility adjacent to Domtars Windsor, Que., pulp and paper complex, and is easing into production one piece of equipment at a time, says Jean Moreau, president of Celluforce. Celluforces product, nanocrystalline cellulose (NCC), had only been produced in lab-scale facilities, until now. The production process at Celluforce is a new combination of existing technologies. These pieces of equipment have never been put together before, explains Moreau. The process begins with dry pulp, which undergoes a reaction with acid in two batch reactors. From there, it begins a continuous flow of filtration down to the nano level. After the final filtration, the nanocrystalline cellulose, suspended in water, is sprayed into a dryer. It is shipped in powder form. NCC is an advanced material derived from wood fibre that can be used as an additive to improve strength, durability, and toughness. Moreau says Celluforce is currently exploring four main markets for NCC, as an additive for coatings, films and

The first large-scale production facility for nanocrystalline cellulose is ramping up operations in Quebec.

barrier products, textiles, and polymer composites. About a dozen potential clients have used samples of the material for proof of concept testing. Having the plant operational now is very exciting, says Moreau. I have to salute our employees. Everyone is working very hard right now. equipped with three newsprint machines, one machine for directory paper and one for paperboard. The facility has a capacity of 410,000 tonnes per year of newsprint.

White Birch closes Stadacona permanently after union rejects offer

The Stadacona newsprint mill in Quebec City which has been idle since December is now permanently closed, says owner White Birch Paper. The closure follows the rejection by members of the Communications, Energy and Paperworkers Union of what was termed a final offer presented by the owner on Jan. 6. The decision leaves about 600 workers without a job. White Birch president Christopher Brant said the company was forced to close the mill. The decision was not made lightly and we did everything we could to avoid this scenario. Brant continued, The mills financial situation and the economic deterioration in the newsprint industry mean the end of the road for Stadacona. The unions rejection of our final offer left us with no other choice but to close the mill for good. The Quebec government is attempting to help mill owners and the workers reach an agreement that will re-open the mill, Canadian Press reported Jan. 17. The CEP union told Canadian Press that the rejected Jan. 6 offer called for a 21% pay cut, and significant reductions to pensions. It was said that workers over age 55 would lose 45% of the value of their pension, while younger workers would lose 65% of the value. The insolvent White Birch owns two other mills in Quebec, F.F. Soucy in Riviere-du-Loup, and Papier Masson in Gatineau. It also owns a sawmill in Quebec and another newsprint mill in Virginia. According to the White Birch web site, Stadacona is 6
PULP & PAPER CANADA January/February 2012

Receiver wants quick sale of shuttered St. Marys

St. Marys Paper was forced into receivership on Dec. 30, after its insurer discontinued coverage. CEO Dennis Bunnell told the Sault Star newspaper that lack of insurance carrier caused the mills first secured party, International Forest Products, to have St. Marys put into receivership. Bunnell characterized the situation as unusual. The receiver, Ernst & Young, has obtained insurance for the mill, and is putting in place a sales process to sell the facility by March 2. It will entertain offers for sale as a going concern or for liquidation. The mill in Sault Ste. Marie has been in a cold idle state since March 2011, putting about 300 employees out of work. It had operated only sporadically in the past few years, producing supercalendered paper. The Sault Star reports that the mills unionized workers had agreed in October not to take any legal action regarding severance pay until January. With the receivership, those employees fall to the end of the list of creditors.

Catalyst gets creditors on board for recapitalization, needs new union agreements

Catalyst Paper has negotiated a deal with creditors to recapitalize, but the deal was contingent on ratifying new labour agreements with union locals at the companys Canadian mills by Jan.
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Photo courtesy Celluforce.

INDUSTRY NEWS
31. Two of the mills have reached labour agreements, but, at press time, Crofton had not. Catalyst has warned that if the restructuring plan does not go ahead it will file for bankruptcy. The recapitalization transaction will result in a significantly reduced debt burden for Catalyst. A story in the Vancouver Sun on Jan. 17 explained that the deal gives bondholders 99.5% of the companys shares, and effective ownership of the company. The proposed recapitalization has the support of the companys creditors and is expected to close by Mar. 31. Upon implementation, a new board of directors will be appointed. Catalyst will continue to operate and meet its obligations to creditor, customers, and employees as the recapitalization is arranged. an internal company investigation, which led APRIL to involve the police. During his 37-year career, van Lee has worked for global consulting engineering companies such as Amec, Ausenco, KSH Solutions, and Poyry, as well as equipment suppliers and pulp and paper producers. More information about the case can be found at freerickvanlee.com.

New marine transportation service to deliver fibre to Howe Sound Pulp & Paper

Fortress Paper begins dissolving pulp production at Thurso

The conversion of the former kraft mill at Thurso, Que. is complete. In January, Fortress Paper Ltd. announced that it had ramped up production of dissolving pulp at its Fortress Specialty Cellulose Mill to approximately 60% of final targeted capacity. The centerpiece of the dissolving pulp conversion project, a new state-of-the-art pre-hydrolized kraft cooking plant, came on line successfully Dec. 4. The cooling plant is based on a technology owned by GLV Inc. The company states that the product is meeting customer specifications and after aggregating inventory, customer shipments commenced in the final week of December. The conversion project was on budget, with the exception of costs resulting from the unexpected walkout of construction workers in October. The cogeneration project at the Fortress Specialty Cellulose Mill is proceeding on schedule, and is expected to be completed in the third quarter of 2012.

Barges of chips are a common sight at Howe Sound Pulp & Paper.

Canadian engineer Rick van Lee sentenced to three years in prison

A Canadian pulp and paper engineer has been sentenced to three years in prison in Indonesia for theft of confidential company data. The trial of Rick van Lee ended Dec. 3, with a sentence of three years, longer that the prosecutor had requested. Van Lee had been working for Asia Pacific Resources International Limited (APRIL) at the time of his arrest. In that capacity he served as technical manager for Riau Andan Pulp & Paper (RAPP), a subsidiary of APRIL. The case involved allegations that van Lee used private storage media for safekeeping company data. Timothy Inkiriwang, van Lees lawyer, said police never performed digital forensics on van Lees computer, and the defence team fears evidence contained on van Lees laptop and external storage devices has not been handled properly by investigators, according to a story in the Vancouver Sun on Nov. 27. In the same story, APRIL spokeswoman Jamie Menon said they found evidence of several months worth of collaboration with a direct competitor by van Lee. That discovery triggered
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Ledcor Resources and Transportation has invested $70 million to launch a marine transportation service to Howe Sound Pulp and Paper. The company has also acquired a producer of wood chips and hog fuel located in the B.C. Interior region. The acquisition of Renew Resources and twelve new barges represents an investment of $70 million for Ledcor, making it the only company of its kind to provide all of the related supply chain services from fibre sourcing and harvesting to the processing and delivery of that fibre to end users. Paul McElligott, former president and CEO of TimberWest, recently joined Ledcor to head up the companys resources and transportation division. The Ledcor Group of Companies is a B.C.- based, employee-owned conglomerate that operates across North America.

Resolute pledges to reduce GHG emissions and increase certified forest

Resolute Forest Products issued in November its 2010 Sustainability Report, reviewing company performance in key areas such as environmental impact, stakeholder engagement, product stewardship, fibre sourcing, community relations, human resources, and health and safety. Im proud of how far Resolute has progressed in becoming a stronger, more sustainable organization, but we know we need to keep doing better year after year, said Richard Garneau, president and CEO. In preparing the report, Resolute conducted an extensive analysis to identify sustainability issues deemed most important
January/February 2012 PULP & PAPER CANADA

INDUSTRY NEWS
by stakeholders. The report includes a series of sustainability commitments to be tackled by the company, including: achieve a 65% absolute reduction in scope 1 and 2 greenhouse gas emissions by 2015 over the 2000 base year. increase Forest Stewardship Council (FSC) certification of managed woodlands from 18% in 2010 to 80% by 2015. reduce the Occupational Safety and Health Administration (OSHA) incident rate to 1.0 or below, with the ultimate goal of zero incidents, zero injuries throughout the company. successfully ensure the next generation of the companys workforce, with the goal of recruiting between 2,500 and 3,500 employees over the next three years. rebuild strong relationships in operating communities.

Domtar buys first commercial LignoBoost plant for Plymouth , N.C., site

Fibrek advises shareholders not to accept Resolute offer

One of Canadas largest pulp and paper companies, Resolute Forest Products, has made an unsolicited offer to acquire Fibrek, a pulp producer with one mill in Quebec and two in the U.S. Fibreks board of directors has rejected the unsolicited bid from Resolute Forest Products (formerly AbitibiBowater) and taken steps to buy it time to fight the hostile bid. The Quebec-based pulp producer has adopted a shareholder rights plan and is obtaining an independent valuation of its common shares.

This is dried lignin produced at the Lignoboost demonstration plant in Sweden.

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Metso will supply the worlds first commercial installation of LignoBoost technology to Domtars Plymouth, N.C., pulp mill. The LignoBoost process separates and collects lignin from pulping liquor. This order is an important breakthrough for Metsos patented LignoBoost technology. The technology has been operating at a demonstration plant in Sweden for several years, but this is its first commercial-scale application at a pulp mill. The value of the order was not disclosed. For the Plymouth mill, separation of a portion of the mills total lignin production reduces load on the recovery boiler and allows an increase in pulp production capacity. The lignin recovered will be used for internal and external applications. According to Domtars web site, the Plymouth mill has two pulp lines with total capacity of 444,000 tonnes per year of cellulose fibres and fluff pulp. This project is a potential game changer for the pulp and paper industry because it will allow pulp mills to have a new, more profitable value stream from a product that was traditionally burned in a recovery boiler, says Gene Christiansen, general manager business development innovations, at Metsos Power Business Line for North America in Charlotte, N.C. The LignoBoost plant will be in commercial operation in early 2013. Domtar Corporation is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and is also a manufacturer of paper grade, fluff and specialty pulp.

Alberta gains ground against mountain pine beetles

Aerial surveys show Alberta is making progress in its fight against mountain pine beetle infestations in some parts of the province. This years aerial surveys show about 50% fewer red beetlekilled pine trees where control programs are in effect, primarily in west-central Alberta and east to Slave Lake. However, the number of newly attacked trees has increased in the Grande Prairie and Peace River areas, despite the aerial surveys showing no large in-flight of beetles from eastern British Columbia.
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PULP & PAPER CANADA January/February 2012

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CAPITAL EXPENDITURES

The Partys Over

With such an intense burst of capital spending in 2010 and 2011, a hangover was inevitable

The hangover effect

It was a scramble in 2010 and 2011 to get upgrades and new installations planned, approved, ordered, delivered, and installed within the time-frame dictated by the terms of the PPGTP. Now that the flurry of activity is over, theres a lull while everyone catches their breath and gathers their resources. Blair Ryberg of Tolko Manitoba Kraft Papers notes, The 2012 [capital expenditures] list is very light since we installed a great deal of capital in 2011, which resulted in the mill being down for weeks to get the capital installed. The message is similar at many other mills across the country. Tim Lanteigne of Daishowa-Marubeni Peace River Pulp, says his mills cap-ex for the next couple of years is largely geared toward wrapping up PPGTP projects. We will probably limit internal capital spending to $8-$10 million for maintenance, upkeep, and obsolescence type of projects. There were very tight timelines on the PPGTP projects, so DMI ran into cost overages related to the deadlines, Lanteigne explains. In the West, mills were competing with one another for labor and technical resources, and competing with a strong oil and gas industry at the same time. 10
PULP & PAPER CANADA January/February 2012

Completing this evaporator plant is the only capital project planned for Weyerhaeuser Grande Prairie for 2012.

We had to stretch our internal resources, and external resources were hard to get, he recalls. DMIs recovery boiler upgrade was completed last fall, and the new condensing turbine generator was in the final stages of commissioning in December. At the Weyerhaeuser Grande Prairie pulp mill, the only capital project at in 2012 will be completion of the new evaporator plant at the facility. This is a $70-million project begun in 2011. We now expect completion in the summer of 2012 because of some weather-related delays in equipment deliveries, explains Wayne Roznowsky, manager, public affairs, for Weyerhaeuser in Canada. The final two vessels for the evaporator plant were due to arrive in Grande Prairie in December. For our part we expect to see less capital spending in 2012 compared to 2011, if you consider the evaporator plant a 2011 project. There will be no new projects in 2012 at Grande Prairie.
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Photo: Rob Ganzeveld - FX Photographic Inc.

s capital spending on energy and efficiency projects tapers off with the end of the Pulp and Paper Green Transformation Program (PPGTP) in March, dissolving pulp becomes the hot area for investment in 2012. Three big ticket projects in 2012 are associated with dissolving pulp mills. The most substantial investment is the $200 million being spent to convert the Prince Albert pulp mill to a dissolving pulp facility. Fortress Specialty Cellulose, fresh from its dissolving pulp conversion, is completing an associated cogen project this year. And Tembec has earmarked $343 million for its specialty dissolving pulp business over the next five years. The other major investment taking place at many Canadian mills is in power generation projects. Most were started last year within the framework of the Green Transformation Program, which favored energy conservation and environmental projects.

CAPITAL EXPENDITURES

Roznowsky says the PPGTP did free up capital for other projects. The evaporator plant is an example. It followed the installation of a new turbine generator at Grande Prairie. Just over $32 million from the Green Transformation Program went into the new turbine generator, allowing capital that would have otherwise been used for the turbine generator to go into the evaporator plant.

Mills on a power trip

We had to stretch our internal resources, and external resources were hard to get.
Tim Lanteigne, DMI Peace River Pulp
Weve always wanted to do this but there were so many other things to focus on during our first years of operation, Sampson told the Nanaimo Daily News. Its a big financial commitment and the decision to move forward with the project was not made lightly, but we see it as another revenue stream for the mill. There are so many ups and downs in the pulp industry that the stable and secure revenue stream which this will provide will help us out in hard times.

Nanaimo Forest Products Ltd. recently announced a new 25-MW turbo-generation unit for its Harmac Pacific pulp mill located just south of Nanaimo, B.C. The project will allow Harmac Pacific to generate and sell clean power to BC Hydro. The turbo-generation unit will produce electricity from wood biomass, and use recaptured steam energy from the pulping process. Upgrades will also be made to the pulp mills boiler and hog fuel handling system. Harmac president Levi Sampson said the construction of the plant will begin immediately and is expected to last 18 months.

Big Spending on Dissolving Pulp

One of the largest projects on the books for 2012 is the conversion of Prince Albert Pulp to a dissolving pulp operation. The former Weyerhaeuser mill in Prince Albert, Sask., closed in 2006, and was sold to Paper Excellence Canada Holdings Corporation in the first half of 2011. Paper Excellence will be investing more than $200 million in the conversion of the mill. One of the first priorities is to get the biomass boiler and power turbine up and running. Prince Albert Pulp has an agreement with Sask Power to provide green energy from the mills co-gen plant to the provincial grid. The power produced on-site will also be used to heat the mill during construction. Were working to generate green energy by (some time in) May, Dale Paterson, general manager of Prince Albert Pulp, told the Prince Albert Herald in January. We started in September and were about halfway there now. Five million dollars has been spent on the project (so far) and another $5 million will be spent (in the coming months). Paterson also noted that the company is aiming to be producing dissolving pulp in the third quarter of 2013. The pulp mill portion of the facility was built in 1966. At the time it was shut down in 2006 it had an annual capacity of 145,000 t/y of bleached softwood and hardwood kraft pulp. Another major investment in dissolving pulp could come from Tembec. The company has announced a recovery boiler upgrade and co-gen project, and a possible expansion of its dissolving pulp mill. Tembec president and CEO James Lopez confirmed in October that the company will proceed with a $190-million boiler replacement at the Temiscaming specialty dissolving pulp mill. The project will substitute a new boiler for the three aging low-pressure boilers currently in use at the site. In addition to improving productivity and uptime, the upgrade will also permit the facility to sell 30-40 MW of incremental green power to the Quebec provincial electric utility. Anticipated completion for the co-gen project is Dec. 2013. It will be financed in part by a previouslyannounced $75-million loan from the Quebec government, at what Lopez says is substantially better than market cost. Lopez anticipates a four-year payback for this project. Lopez also announced last fall a possible 30,000 tonne/yr capacity expansion for the specialty pulp mill. He cautioned investors at a conference in New York that the expansion is not approved yet, but all the signs are looking very, very positive for the project. The $100-million capacity expansion would see the 11 original digesters replaced with 10 new stainless steel vessels. The project is expected to be complete in 2015, and would have a 2.4 year payback. Overall, $343 million in capital expenditures is earmarked for Tembecs specialty dissolving pulp business over the next five years. This is by far the most solid business that we have, with the brightest future and the best, most stable margins, said Lopez. The conversion to dissolving pulp undertaken by Fortress Specialty Cellulose Inc. at Thurso, Que., is effectively complete, but construction continues on a co-gen project that is expected to be complete in the third quarter of 2012. The company will receive $9.9 million from PPGTP for the thermal energy project. 11

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January/February 2012 PULP & PAPER CANADA

CAPITAL EXPENDITURES

While we all agree that the pursuit of greener technology is the right thing to do, the reality is that developing projects of this nature is often challenging

Ron Reis, Millar Western

Funding for the series of upgrades was made possible by PPGTP ($27 million) and BC Hydros Power Smart Partners Industrial Program ($1 million for a vacuum pump system upgrade). Cariboo Pulp & Paper is following the power generation path, using its PPGTP funding to install a turbogenerator and upgrade its hog boiler ($47 million). This will allow the company to export power to the B.C. grid. The second project Cariboo has underway for 2012 is a new R8 plant to upgrade ClO2 production. This is partially-funding by the PPGTP, and is expected to cost $17 million.

Bowater Mersey Paper Co. plans to install equipment to improve heat recovery from steam generated at its Brooklyn Power co-generation plant, according to the Chronicle Herald newspaper. Engineering for the biomass project, which would generate 3.3 MW of electricity, is underway, Robin Anthony told the paper. The investment is part of a $50-million deal between Bowater Merseys owner, Resolute Forest Products, and the province of Nova Scotia to keep the mill open and improve its efficiency. Pierre Choquette, a spokesman for Resolute, said the company plans to spend about $18 million on long-fibre refining at the Bowater Mersey site and roughly $7 million on a new turbine for the Brooklyn power facility. Fibrek reported in late 2011 that its co-generation project at the Saint-Flicien mill is on budget and on schedule for its target start-up date of December 1, 2012. To date, the company has received grants totalling $9.0 million and incurred $10.1 million in capital expenditures. This project will increase green energy production capacity at the Saint-Flicien mill by nearly 30%, from 33 MW to 42.5 MW. Since the mill was already self-sufficient in terms of energy, the additional 9.5 MW of electricity will be sold entirely to Hydro-Qubec Distribution beginning in December 2012.

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After completing its PPGTP-related upgrades, Tolkos 2012 projects tend to be the ongoing-maintenance type of investments. To remain compliant with regulations, $1.5 million will be spent on a landfill expansion cell and an upgrade to petroleum storage tanks and associated unloading areas ($100,000). The landfill expansion cell is expected to be completed by the end of Q2. Tolko is taking advantage of the closure of the Pine Falls mill to purchase of a used chip truck dumper from that operation. Cost of acquisition and shipping from Pine Falls to The Pas is expected to be $385,000. The new equipment will improve the cycle time of chip unloading and thus improve fibre costs. The first phase, to take place in 2012, is to get the used equipment to the mill site. Installation will follow in 2013. A paper break mitigation project, worth $485,000, will begin in the first quarter of 2012, and is expected to wrap up in the third quarter. The objective is to improve paper machine threading at the reel after paper breaks. Tolkos Kevin Scully echoes Blair Rydbergs comments on the PPGTP hangover effect. Anticipated capital spending for 2012 is much less than 2011 this is mainly due to the conclusion of the PPGTP program, and less capital funding available company-wide in 2012. However, Scully adds that the PPGTP projects will free up capital for other projects within this business unit. At Alberta Newsprint Co., there is a notable lack of PPGTP funding, since the company does not produce the black liquor needed to qualify for PPGTP credits. Gary Smith reports that the company continues to spend approximately $4.5 million yearly on capital projects to keep the mill competitive.

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PULP & PAPER CANADA January/February 2012

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CAPITAL EXPENDITURES

Biogas cuts operating costs

There are also several bio-gas projects in progress or beginning this year. Tembec Matane, AV Cell and Millar Western are investing in bio-gas systems for internal energy use, while Alberta Pacific is pursuing a totally new product line with biomethanol for sale to external clients. Millar Western Forest Products is waiting for approval for its bioenergy project, announced in June 2011 in partnership with UEM Inc. The budget for the project is reported at $35 million. Millar Western confirmed in January 2012 that it was still awaiting regulatory approvals. The project will involve the installation of anaerobic hybrid digesters at its Whitecourt, Alberta, pulp mill, to convert organic material in mill effluent to a biogas that will generate power and heat, reducing energy purchases and improving the mills environmental performance. Millar Western is currently in the process of seeking regulatory approval. If it is given approval to proceed by both the regulatory agencies and Millar Westerns board of directors, the project is expected to take 18 to 24 months to complete. The project will use wood waste from pulp plant wastewater to produce green electricity, according to an Aug. 2011 story in the Whitecourt Star. At Millar Westerns announcement of the project, Ron Reis, Millar Westerns pulp senior vice-president, thanked the governments for supporting this new venture. While we all agree that the pursuit of greener technology is the right thing to do, the reality is that developing projects of this nature is often challenging, especially for smaller and medium-sized companies like Millar Western. Projects can take years of research and development, and can often encounter many dead ends and detours along the way. And, because of the untested nature of the new technologies we are trying to adopt and commercialize, these projects are usually difficult to finance by conventional means. Funding for the project comes from the federal government through the province from Albertas share of the Canada EcoTrust for Clean Air and Climate Change. The eco-Trust has distributed $1.5 billion among all the provinces and territories. AV Cell in Atholville, N.B., is turning to biogas as its source of green energy. An aerobic reactor that was being installed late in 2011 will turn mill effluent into a methane-rich biogas. The $18-million, closed-loop system will be a renewable energy source, able to account for 25 to 30% of the mills energy, according to AV Groups corporate energy manager, Rajeev Goel. He calculates that the new reactor will displace 2.2 million litres of oil and 7,000 green tonnes of biomass each year. Tembec announced in January 2011 a biomethane project and boiler conversion worth $25.7 million for its high-yield pulp mill located in Matane, Que. Funding will come mainly from the federal governments PPGTP ($18.9 million) and the province of Quebec ($6.3 million). This investment will result in a significant reduction in costs for Matane and will allow the mill to be competitive in global markets for years to come, said Yvon Pelletier, executive vicepresident and president, Specialty Cellulose and Chemical Group. The project has two main components. The first is a new anaerobic treatment facility which treats effluent and collects
pulpandpapercanada.com

For Some Mills, the Partys not Over

West Fraser Mills Ltd. is receiving $2 million from PPGTP for its Quesnel River Pulp mill waste water heat exchanger upgrade project. The work will improve the mills energy efficiency through the installation of four heat exchangers. West Fraser Mills is also receiving $5.1 million from PPGTP to reduce greenhouse gas emissions and improve the energy efficiency of its Slave Lake Pulp mill, in Slave Lake, Alta. Kruger Wayagamack Inc. in Trois-Rivires is receiving $6.3 million from PPGTP for five projects to improve environmental performance through upgrades to mill processes. Kruger, with financial assistance from Quebecs natural resources ministry, will install a heat exchanger at its Lennoxville, Que., facility. The government assistance totals $92,000. Resolute Forest Products announced in October an investment of $4 million in PM11 at the Laurentide newsprint mill. Spokesman Pierre Choquette told the local newspaper the project would improve the quality of the pulp, thereby producing better paper. PM11 accounts for 60% of the production capacity at the mill.

the methane gas produced in the treatment process, allowing it to be used as a bio-fuel for drying the pulp produced at the site. With an estimated cost of $1.8 million, the second component involves the installation of an electric boiler that will replace the current heavy oil fuelled boiler. They will also result in a significant improvement in the mills cost structure, with EBITDA projected to increase by $6 million on an annual basis, beginning when the project is completed in mid-2012.

Al-Pac diversifies with biomethanol

A first-of-its-kind biomethanol project at Alberta-Pacific Forest Industries Inc. will benefit from the support of the federal Investments in Forest Industry Transformation (IFIT) program. Al-Pac is receiving $4.5 million from IFIT to diversify its product offerings by extracting and purifying biomethanol from its pulping process. With funding announced in October 2011, Al-Pac said it would proceed with installation of equiapment to separate and purify biomethanol, using a new technology developed in partnership with A.H. Lundberg. Al-Pac already produces unpurified biomethane which is burned as a fuel in a lime kiln. The integration of the new technology will see this biomethanol purified and used in the production of a pulp whitening agent. The remainder of the biomethanol produced will be commercially sold. The methanol purification requires the construction of a building on the mill site to house equipment. Tie-ins to existing equipment were put in place during the company maintenance shutdown in 2011, and Al-Pac expects to begin purifying and selling biomethanol in the first quarter of 2012. PPC
January/February 2012 PULP & PAPER CANADA

13

ANALYSIS

Caught Between the Devil and the Deep Blue Sea

Government, utilities, and employees are being asked for huge concessions to keep Nova Scotia mills running
By Carroll McCormick n a classic industry versus government, union, utility and anyone-else-in-sight faceoff, the Bowater Mersey paper mill in Bridgewater, N.S., has cut its employees by half, struck a deal for $50-million worth of loans, training and sale of 10,000 hectares to the province. Threats of closure also got Bowater Mersey a property tax cut, and a lower electricity rate. For Mersey owner Resolute Forest Products (formerly AbitibiBowater) it was a question of whether to cut loose an unprofitable mill. For the province, it was about protecting the backbone of its forestry industry, which accounts for about 3.6% of its employment and GDP. Unfortunately, Nova Scotias game of hardball with Richard Garneau of Resolute segues into a slam dance with Ronald Stern, president of Vancouver-based Stern Partners. Stern is also president and CEO of Alberta Newsprint Company and the man behind Pacific West Commercial Corp., which is the sole bidder for the NewPage paper mill in Port Hawkesbury, insolvent and idle since last September. It can be regarded as a good thing that Stern wants to keep the mill running if only the supercalendered machine rather than hauling it away, piece by piece. But Stern is reported to be a fierce negotiator and the provincial governments cards are all lying face up on the negotiating table. Expect a final deal to be sealed with blood drawn from concessions on power, taxes, pulpwood rates, access to fibre on crown land, staffing levels, and wages. Pulp and paper mills in Nova Scotia have been staggering under the blows of high fibre costs, a high Canadian dollar, 14
PULP & PAPER CANADA January/February 2012

distant markets, and punishing power rates. During a hearing last fall, the Nova Scotia Utility and Review Board heard that a one-cent change in the value of the Canadian dollar translated into $1.5 to $2 million a year for Bowater and $3.335 million in profits for NewPage. Both mill owners testified that Nova Scotia is the most expensive jurisdiction in which they operate in North America with respect to electricity.

Northern Pulp union shows goodwill to NewPage neighbors

Unionized workers at the now-idled NewPage Port Hawkesbury mill in Nova Scotia received a welcome Christmas present from fellow workers at the nearby Northern Pulp Nova Scotia mill. Local 440 of the Communications, Energy and Paperworkers Union delivered a $20,000 donation from its members to the former NewPage Port Hawkesbury employees, according to a story in the Chronicle Herald on Dec. 13. Were making this donation to support our brothers who are out of work and were trying to help them with the Christmas season, MacLaughlin said in a news release. The donation works out to about $50 per recipient. The NewPage newsprint and supercalendered mill has been closed since September, putting more than 300 people out of work.

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ANALYSIS

The Board later granted Bowater Mersey a load retention rate, allowing the company cheaper access to power beginning in 2012. Minas Basin Pulp & Power, a manufacturer of recycled paperboard in Hantsport, N.S., has avoided the wholesale slaughter, but it has had to make adjustments to survive these pressures. It permanently cut 13 salaried positions last fall and cut some union positions in early January. We have to downsize, redistribute duties and reduce overhead, says Terry Gerhardt, the companys vice-president, operations. For all of 2011 the cost of our fibre supply stayed high and never came down. Our supply of raw materials is very high and it is hard to compete. Minas Basin has not asked for power rate concessions; rather, it has worked hard for years to reduce energy consumption. Elsewhere in the mill, Gerhardt says, We are looking at solutions that will let us manufacture the same products, with more efficiency and lower costs. The NewPage Port Hawkesbury closure caused a full-out collapse of the pulpwood market in the eastern region, but the wreckage scattered the length of the province. NewPage was buying wood as far west as Digby. A lot of contractors that had been feeding into that supply turned to Bowater and flooded that market. We are in a bad spot, concludes Mike Hutchinson, projects coordinator, Federation of Nova Scotia Woodland Owners. Steve Talbot, executive director, Forest Products Association of Nova Scotia, concurs. Some of our members are out of business. Some [operators] have shut down. Some have gone to Alberta. When the mills start back up they might not be able to supply chips and round wood to the mills. The shakeout and the shakedown are far from over. Bowater Mersey has set the tone. The employee cuts at Mersey were an ultimatum, says Don MacKenzie, national representative for the Communications, Energy and Paperworkers Union of Canada in the Atlantic Region. How the plant will run on half-staff is an open question. As for what Stern will demand of CEP, MacKenzie could only state the obvious, We await contact from the new owner [of NewPage] to negotiate a new agreement.

Paying a high price for power: The owners of NewPage and Bowater Mersey mills told a review board that electrical power in Nova Scotia is the most expensive of all their North American operations. Shown above is Nova Scotia Powers Annapolis tidal power plant.

It is hard to envision Stern not insisting on a power rate concession, among other things, as a necessary condition for sealing the NewPage purchase, but will the mill qualify? The decision rests with the Nova Scotia Utility and Review Board. Both NewPage and Bowater Mersey were paying 6.22 cents per kilowatt hour as a general rate and, without the load retention rate, were facing an 11.9% hike for 2012. The new rate approved for Bowater brings the cost down to 6.02 cents in 2012, rising to 6.78 cents in 2014. Resolutes Richard Garneau has said the concessions from industry and government should ensure the future of Bowater Mersey for five years. For NewPage Port Hawkesbury, the future is still on the bargaining table. PPC

Owner of Alberta Newsprint sole bidder for NewPage Nova Scotia mill
The good news is that the remaining bidder for the idled NewPage Port Hawkesbury paper mill wants to keep the operation running; the not-so-good news is that the buyer still has to find a way to bring costs down to make the mill viable. Pacific West Commercial Corp. has been chosen as the remaining bidder for the mill by the monitor in the NewPage Port Hawkesbury restructuring. Pacific West is associated with Stern Partners Inc., a Vancouver investment firm that also owns part of Alberta Newsprint Co. of Whitecourt, Alta. (in partnership with West Fraser Timber Co.), and West Linn Paper Co., an Oregonbased mill, as well as two newspaper publishing businesses. According to the court-appointed monitor, Ernst & Young, the sale is subject to a number of significant conditions being satisfied as outlined in the PWCC offer. The focus will now shift to satisfying these conditions to facilitate a going concern sale of assets. Ron Stern, founder and president of Stern Partners, told Nova Scotia media he only intends to operate the supercalendered paper machine at the Port Hawkesbury mill, producing supercalendered and higher grades. The mill also houses a newsprint machine. A timeline for the sale is not clear. Ernst & Young will seek an extension until March 30, 2012 of the stay of proceedings in the NewPage Port Hawkesbury case. 15

pulpandpapercanada.com

January/February 2012 PULP & PAPER CANADA

CHEMICAL REPORT

End-users
Pay the Price
By Peter Caulfield

Rising raw material prices further upstream are trickling down to end-users of pulp and papermaking chemicals.

embers of the Chemistry Industry Association of Canada are forecasting lower growth for their industry in 2012 compared to last year, according to the associations 2011 year-end survey of business conditions. John Margeson, CIAC manager of business and economics, and the author of the survey, says 2011 was a good year for the Canadian chemicals industry. Compared to 2010, which was a recovery year after 2008 and 2009, sales in 2011 were up 18% and profits up 61%, Margeson explains. But expect only single-digit growth in 2012. In 2011, the value of shipments rose by 18% to an estimated $25 billion. But, despite strong growth last year and in 2010, industry output remained about 6% below the 2008 pre-recession peak. Survey respondents said they expect sales to increase by only 2% in 2012. Operating profits for Canadian operations rose by 61% in 2011, but survey respondents say they expect profits will be 11% lower in 2012 than 2011. Higher value of shipments and profits in 2011 were the result of greater demand for industrial chemicals, as well as higher prices, which grew by an average of 7%. The price increases reflected the stronger economy and the resulting tightening of supply. Many chemical producers which supply the Canadian pulp and paper industry announced price increases in 2011. In June, Buckman Laboratories of Memphis, TN announced a global price increase of up to 20% on all products and programs, effective July 1, 2011. The announcement said the increase was the result of growing raw material, transportation, and energy costs. Davor Mehes, vice-president of Buckman Canada in Vaudreuil, QC, says one of the reasons for the price increases was the tight supply of industrial chemicals in 2011. The overall market was snug during the first half of 2011, with periodic shortages of critical raw materials, such as acrylic acid, methylamines, bromines/bromides, ethyleneamines, natural oils and alcohols, silicones and some primary amines, he states. Strong demand coupled with stretched producer capacities continued to drive up raw material prices. In the second half of 2011, the market started moderating, as supply and demand achieved a better balance. 16
PULP & PAPER CANADA January/February 2012

Several North American chemical suppliers are continuing to impose transportation and energy surcharges in 2012.

At the same time, natural disasters, such as the Japanese tsunami and flooding on the Mississippi river, continued to disrupt both global and local supply chains, says Mehes. The global macroeconomic turmoil has also had significant impact on both the supply and demand sides of the equation. Mehes says the companys customers have generally been supportive of its requests for price increases. But we continue to struggle with dropping gross margins. Many products have seen double-digit cost increases in recent years. Average feedstock prices used in the manufacture of the raw materials we purchase and in the manufacture of our finished goods continued to increase in 2011, with the exception of natural gas. Mehes says higher feedstock prices are a sign of things to come for Buckman, which makes about 1,000 chemistries and enzymatic products for the pulp and paper industry, because there are often delays in the supply chain between feedstock prices and the prices of downstream intermediate and finished products. Crude oil, ethylene, epichlorohydrin, and methanol costs are up 55-75% since 2009 and benzene and propylene costs are up 75-100% since 2009, Mehes notes. And speculation continues to affect most commodity prices, causing exaggerated movements beyond simple supply and demand factors. Looking ahead, Mehes says Buckman expects its global paper product demand to be up by about 10% in 2012. We expect overall raw material supply and demand to remain balanced in the first half of 2012, he said. We also
pulpandpapercanada.com

CHEMICAL REPORT

think pricing behavior will be more moderated in 2012 compared to 2011, although we continue to play catch-up. All in all, Mehes says, the level of uncertainty remains high, due primarily to the macroeconomic situation and global political and social turmoil.

Chemicals demand may drop

industry with products and applications for the wet end of the paper machine, for pulp making processes, and for the management of raw, process and waste water quality and quantity. Kemiras expectations for demand are echoed by Eka Chemicals of Marietta, GA, which makes bleaching and performance chemicals for the pulp and paper industry. The demand for industrial chemicals by the paper industry has probably decreased in North America during [2011], due to optimization, cost-cutting measures, and rationalization of paper machine output, says Lee Sampson, Ekas vice-president, sales and marketing, pulp and paper North America. In some cases, paper makers do not need the benefits of certain types of output-enhancing chemistries, because of temporary softness in their order books. Sampson says the situation for bleaching chemicals is different from paper chemicals, because the former trade on a global market. As a result, we have been experiencing a quite tight market for sodium chlorate, with strong export volumes in 2010 and 2011, he explains. We expect the trend to continue into 2012. Sampson says the escalating costs of raw materials and energy continue to impact Ekas costs. Product prices have risen as a consequence. Looking ahead to 2012, Sampson says the costs of Ekas inputs will continue to be the main determinant of the prices of its products, but that new uses for wood fibre, which will affect the supplies and prices of some industrial chemicals, will also play a part. Many of our paper chemicals are focused on reducing fibre and energy consumption and increasing production efficiency, he said. We know that these are key to our customers long-term sustainability. Sampson says alternative uses of wood are growing. Product innovations will see more wood fibre being used in new types of consumer goods, especially building and packaging products, as well as better usage of by-products of pulp production through bio-refineries, he notes.

Photo courtesy CN.

Like Buckman and many others, Kemira Oyj of Helsinki, Finland announced price increases in 2011. In January 2011, the company announced price increases for its paper chemical products in all major markets. The increases ranged from 5-15%, depending on the product. In May, Kemira announced further price increases for its paper chemical products of from 5-20%. And in September, Kemira announced price increases for hydrogen peroxide of 15-25%. Kari Savolainen, Kemiras director of communications, interpreted these increases to mean that prices for the companys products strengthened to some extent between January and September 2011. But since the January-September interim report, Kemira changed the outlook for the full-year 2011 and the group gave new guidance to the market, she reports. Kemira stated that, among other things, the demand of chemicals for the paper industry in Europe and North America is expected to be lower than estimated. Savolainen says the Finnish company provides the paper
pulpandpapercanada.com

High operating rates for peroxide

In December 2011, Evonik Degussa purchased Kemiras hydrogen peroxide facility in Maitland, Ontario. In a release, Evonik said the acquisition enabled the company to increase its capacity for hydrogen peroxide production in North America by 44,000 tonnes annually, making it one of the market leaders in the region. The company said the purchase is a step in Evoniks growth strategy for hydrogen peroxide.

Average feedstock prices used in the manufacture of the raw materials we purchase and in the manufacture of our finished goods continued to increase in 2011, with the exception of natural gas. Davor Mehes, Buckman
January/February 2012 PULP & PAPER CANADA

17

CHEMICAL REPORT

Chemical Supplier Ordered to Repay $1.8 Million to Domtar

The B.C. Supreme Court has decided in favor of Domtar in a dispute between the papermaker and chemicals distributor Univar Canada over the application of force majeure in a caustic soda contract. The contract between Domtar and Univar Canada in 2008 capped the price of caustic soda at $545/dry tonne. During 2008 the global price of caustic soda rose dramatically, and Univar chose to apply force majeure. In her judgement, delivered Dec. 23, Madam Justice Fisher stated: Accordingly, I have concluded that the increased price of caustic soda in 2008 did not constitute an event of force majeure within the terms of clause 15A of the contract. Univar was not entitled to be excused from performance and it remained obligated to supply caustic soda to Domtar at the contract price until the contract expired on December 31, 2008. During the six-month period from the declaration of force majeure and the end of the contract on Dec. 31, 2008, Domtar paid the requested price, under protest, because the supply of caustic soda was vital to the operation of the mill. Prices charged by Univar during that period ranged from $730 to $860/ dry tonne. The difference between the contractual maximum and the actual prices paid is $1.871 million plus GST, which Univar must repay to Domtar. Domtar has since changed suppliers of caustic soda. According to a story in KamloopsNews.ca, Justice Fisher found it astonishing Univar could consider its desire for profit to be a force majeure. Generally, force majeure is resorted to where an event beyond the control of a party makes performance of that partys obligations under the contract impossible. It is not to be resorted to where such an event makes performance of that partys obligations commercially impractical unless the parties to the contract have expressly agreed to such a term, the judge said. Kamloops News reports that Domtar asked the judge to impose punitive damages against Univar. Domtar claimed Univars deliberate actions put it at financial risk. Domtars Kamloops Mill was losing money at the material time and Univar was aware that the mill was in tenuous financial circumstances, Domtars lawyers argued in court. Justice Fisher declined to impose punitive damages, however, noting such damages are especially rare in cases involving commercial contracts. The full text of the judgment is available at http://www.courts.gov.bc.ca/jdbtxt/SC/11/17/2011BCSC1776.htm.

A spokesman in the Parsippany, NJ, office of Evonik says demand for the chemical, which is used as a bleaching agent in the pulp and paper industry, grew at a healthy rate in 2011. Total demand for hydrogen peroxide was driven by demand in the pulp and paper industry, said the spokesman, who wished to remain anonymous. Demand by other industries was strong as well. As a result, he said, the operating rates of North American manufacturers of hydrogen peroxide averaged greater than 90%. The Evonik spokesman says that in 2012, demand for hydrogen peroxide will continue to grow, including demand from the pulp and paper industry. The strong demand for hydrogen peroxide was reflected in May 2011, when Evonik announced price increases for the chemical of 4.5 cents per pound in the United States and Mexico and $100/tonne in Canada effective June 1, 2011. The company will continue instituting transportation and energy surcharges for hydrogen peroxide sold in North America based on a basket of leading U.S. energy indices. KaMin LLC of Macon, GA, likewise announced price increases for its kaolin clay products in November and the continuation of energy surcharges.

Paper industry profitability set to improve

Whatever increases in the price of chemicals the pulp and paper industry is hit with in 2012, it has a limited ability to pass them on to customers through price increases, says Michael Burt, director of industrial economic trends for the Conference Board of Canada. So any unexpected increases in input prices generally 18
PULP & PAPER CANADA January/February 2012

detract from industry profitability, he continues. That said, it is important to keep things in perspective. Based on Statistics Canada data, we estimate that chemicals are about 3.5% of pulp and paper industry costs, so even large price changes would have only a modest impact on profits. According to the Conference Boards recently released Autumn 2011 Canadian Industrial Outlook for Canadas Paper Products Industry, the number of new orders and shipments have remained at 2010 levels amid weak global economic prospects. Thus, the near-term production outlook remains weak. According to the report, higher fibre prices may increase production costs, especially in 2012, when production is expected to pick up. However, cost control will continue to be the key for the industry. When combined with the benefits of recent investments designed to improve the industrys efficiency, the net result is that cost increases will not out-pace revenue growth, and industry profitability will gradually improve. Even with lower revenues, drastic industry cost-cutting over the past several years will enable the industry to post a pre-tax profit of $477.3 million in 2011. This marks a second consecutive year of gains and the best performance in terms of profitability since 2002 (when profits reached $646.8 million). The industry is expected to remain profitable for the rest of the forecast period, although margins will remain thin, says the Conference Board report. Tight margins and rising costs make for an uneasy balance. Whats worse is that uncertainty in the chemical industry remains high, with global supply chains influenced by macroeconomic forces, political whim, and natural disasters. PPC
pulpandpapercanada.com

BUILDING FOR THE NEW PULP & PAPER COMMUNITY

www.paptac.ca
Operations Improvements Resources

TECHNOLOGY NEWS
Kadantlevelcontrolcanconvertfloatoperatedpumpstofloat-free
Kadant Canada Corp. has expanded its LiquiMover pressure-powered pump line to include a replacement float-free level control assembly. With the replacement float-free level control assembly, major floatoperated pump brands can now be converted to a float-free assembly providing a reliable and cost effective solution for high maintenance pressure-powered pumps. The replacement float-free level control assembly has no moving parts in contact with the condensate, and no springs, linkage, or floats that are prone to wear and failure. Designed to retrofit major float-operated pump brands, the float-free assembly features a drop-in, bolt-on mounting flange creating a fast and easy upgrade. The motive pressure three-way valve is external to the tank for quick visual check of the operation. A two-probe level control and a NEMA classified control assembly are also incorporated into the float-free level control. Kadant Canada, www.kadant.com FITNIR Analyzers Inc. is the exclusive distributor of FPInnovations optically-based liquor analyzer. FITNIRs fully automated online and bench top systems provide fast and accurate measurement of a complete suite of liquor properties for process control. FITNIR Analyzers Inc. 604-221-2230, www.fitnir.com

TwomoremillschooseFITNIR analyzers
FITNIR Analyzers has gained further traction in the Canadian pulp market as two pulp mills chose the companys equipment for process control optimization. Mercer Internationals Zelstoff Celgar mill, located near Castlegar, B.C., will be implementing FITNIRs fully automated, online analyzer to optimize its recausticizer controls. Over the past six months we have been trialing a FITNIR analyzer and have already benefited from significantly reduced operational costs and improved quality, says process engineer, Shawn Russell. The results obtained from the demo were the deciding factor in moving forward to purchase a full scale system. The mill used to rely on a manual titration methodology for its recaust area. Now, Celgar will be able to automatically test more frequently from six sample lines once the FITNIR system has been implemented. Implementation was to begin in December. In addition to Celgar, a mill in Eastern Ontario has selected FITNIR equipment. Optimization of this mills recausticizer operations through FITNIR Online is expected to be completed in the spring of 2012. These two projects are yet another demonstration of the increasing awareness and confidence that pulp mills have of FITNIR analyzers, says FITNIR Analyzers president, Tom Sands.

EkaChemicalsandWetend Technologiesjoinforcesformixing systems

Eka Chemicals and Wetend Technologies Ltd. have agreed to market and deliver TrumpJet Flash Mixing Systems together with Ekas wet end chemicals to the paper industry globally. The TrumpJet brand offers a range of chemical and additive mixing systems for paper mills, including paper and board machine wet end, stock preparation, recycled fiber and mechanical pulping process applications. The combination of high performance chemicals and an advanced chemical mixing system will benefit the paper and board industry, both in terms of cost savings and environmental gains, says Lennart Nilsson, director global marketing at Eka Chemicals. This offer will definitely have a positive impact on wet end efficiency and contribute to a sustainable paper machine operation, adds Jouni Matula, CEO at Wetend Technologies AkzoNobels Pulp and Paper Chemicals business, Eka Chemicals, produces and supplies a wide range of chemicals, including the unique Compozil retention and drainage system for the paper industry globally. Eka Chemicals Canada Inc. 819-8438772, www.akzonobel.com/eka

Andritz will supply key equipment, a new automation system, and services for the upgrade of a softwood CTMP line which was transferred from Canada to China. The new line requested by Xinxiang Xinya Group Co., Ltd. (Henan Xinhai Paper Co. Ltd.) will be reconfigured by Andritz Pulp & Paper into one of Chinas largest hardwood mechanical pulping systems. Start-up is scheduled for the end of 2012. The new line will be based on the

AndritztoreconfigureCanadiansoftwoodCTMPline forhardwoodinChina

patented P-RC APMP technology. The pulp produced will be used primarily for board grades; however, the line also provides the possibility to produce printing and writing grades. The line capacity is 700 t/d. The original softwood CTMP line is reported to have come from the former AbitibiBowater mill in Mackenzie, B.C. Andritz Pulp & Paper, 514-631-7700, www.andritz.com

20

PULP & PAPER CANADA January/February 2012

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INNOVATION

Forest industry research at universities across the country is now aligned under one organization: FIBRE

Collaborative Research

Celebrating the launch of FIBRE: (l to r) Pierre Lapointe, FPInnovations; Theo van de Ven, FIBRE; Andre Isabelle, NSERC ; Catherine Cobden, FPAC; Mary Mes-Hartree, Canadian Forest Service, Natural Resources Canada.

FPInnovations Pierre Lapointe outlined how FIBRE fits with the national forest sector innovation framework.

FIBRE, or Forest Innovation by Research and Education, is the newly created organization that has been structured to build synergies among eight forest sector university R&D networks funded by the Natural Sciences and Engineering Research Council of Canada (NSERC). The mandate for FIBRE to work toward forest sector innovation comes from a partnership comprised of: FPInnovations, Natural Resources Canada, NSERC, and the Forest Products Association of Canada (FPAC). The FIBRE partnership is a unique opportunity to create and share knowledge and best practices from eight forest research university networks which draw on the R&D strengths of each other in an innovative approach, says Theo van de Ven of McGill University and spokesperson for FIBRE. Van de Ven notes that these eight networks encompass more than 400 students and post-doctoral scholars, plus more than 100 professors at 23 universities. FPInnovations has been a strong proponent of FIBRE from the outset because we believe that universities are playing a key role within the Canadian 22

Forest Sector Innovation System, states Pierre Lapointe, president and CEO of FPInnovations. FPInnovations has hired Paule Ttu as FPInnovations-University Strategic Partnership Advisor. Mrs. Ttu will be working with networks and partners to stimulate the commercializa-

The FIBRE network

ForValueNet Network led by Laval University Value Chain Optimization Network led by Laval University Bioconversion Network led by the University of Guelph Lignoworks led by the University of British Columbia Innovative Green Wood Fibre Products Network led by McGill University Sentinel Bioactive Paper Network led by McMaster University NEWBuildS led by the University of New Brunswick ArboraNano, the Canadian Forest NanoProducts Network, a Businessled Centre of Excellence

tion of R&D results generated through FIBREs university networks. Her mandate includes ongoing consultation on network programs with the forest sector, provincial governments, as well as non-traditional industries that can benefit from innovation in the forest sector. Ground-breaking research is helping transform our forest products sector into a dynamic and future-oriented industry, says Avrim Lazar, president and CEO of FPAC. This type of partnership is crucial as Canadian forest companies compete to take advantage of an estimated $200 billion market for new bio-products made from trees. At the FIBRE launch at a research symposium last fall, van de Ven said he expects the organization will be a leading force in a gradual transformation from a fuel-based economy to a green, sustainable economy. He also believes that having one organization to unite and coordinate forest products research help to secure research funding and attract non-traditional industries. For more information about FIBRE, visit: www.reseauxfibrenetworks.ca. PPC
pulpandpapercanada.com

PULP & PAPER CANADA January/February 2012

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Size Wise.
How a packaging mill saved $457,040 per year by switching to the Med allion sizing program from Buckman.
The Challenge
The mill was a successful producer of sack paper and Kraft liner from both virgin unbleached Kraft pulp and mixed pulps. Unfortunately, high rosin and alum costs were eating away at the mills profitability.

The Solution
Buckman introduced its Medallion ASA Sizing program, replacing rosin and significantly reducing the need for alum. Emulsion quality and particle uniformity were good. Retention and Cobb values remained within their target limits. Equipment functioned without any issues.

The Savings
Rosin cost elimination: from $9.35/ton to $0 Alum cost reduction: from $6.01/ton to $3.34/ton Medallion program cost: $6.98/ton Freight reduction for sizing chemicals: from 23 trucks/year to 4 trucks/year

Total ROI:
$457,040 per year + reduced carbon footprint

Find out more.

To learn more about our Medallion sizing program or to discuss any other production issues you may have, contact your local Buckman representative. Let us give you a story worth telling.

Commitment makes the best chemistry.

For more information call 1-800-BUCKMAN or visit buckman.com
2012 Buckman Laboratories International, Inc.