Pulp and Paper

KaiCell Fibers

KaiCell Fibers’ Paltamo Pulp and Bioproduct Mill Gets Environmental Greenlight by Finnish Authorities

July 22, 2020 - KaiCell Fibers said that the Regional State Administrative Agency for Northern Finland (AVI) has approved an environmental and water usage permit application for the company’s proposed pulp and bioproducts mill to be built in Paltamo in northeastern Finland.

The mill’s projected annual capacity is 600,000 ADMT (air dried metric tonnes) of which about 85% will be NBSK (Northern Bleached Softwood Kraft) pulp, and about 15% will be chemical pulp from hardwood (birch), also known as BHKP (Bleached Hardwood Kraft Pulp).

“It is very positive for the Kainuu region that the Paltamo mill project now has a clear path towards implementation,” said Hannu Heikkinen, CEO of KaiCell Fibers. “AVI’s decision further strengthens the venture’s credibility and enables us to seek financing also outside Finland. We can therefore take the next steps towards building the mill with confidence.”

KaiCell Fibers’ Chairman Eero Suutari credited the team that prepared and submitted the permit application.

“They did an extremely thorough job, and went particularly deeply into the very areas that have recently been subjected to scrutiny and tightened rules from the authorities. This way they clearly established that the future mill will operate in harmony with its environment, nature and the local community,” Suutari said.

Paltamo mayor Pasi Ahoniemi emphasized that the municipality stands firmly behind the KaiCell mill venture.

“Converting our fibre wood into market pulp locally would mean a tremendous shot in the arm for the region’s strained economy. Global pulp demand continues to grow, and the mill is projected to generate a positive effect of more than 200 million euro per year. Not only for the forest sector, but throughout our economy,” the mayor said.

KaiCell Fibers Oy/Ltd is a company funded by private investors and the Regional Council of Kainuu (Kainuun Liitto) with the objective of building and operating a state-of-the-art pulp (NBSK) and bioproducts mill in Paltamo, Finland. For further information, visit: www.kaicellfibers.com.

SOURCE: KaiCell Fibers Ltd.


Sodra Varo pulp mill

Södra Announces Plans to Increase Pulp Capacity at Its Värö Mill in Sweden

July 22, 2020 - Södra recently announced that it is planning a new investment for its pulp mill in Värö, Sweden, which will allow the mill to increase capacity from its current 700,000 tonnes per year (tpy), and move towards 850,000 tpy.

“The investment is part of Södra’s new Group strategy and means that we can continue to follow our chosen path and grow together with our customers. Increasing production will strengthen our competitiveness and our position in the global market as a long-term and secure partner,” said Peter Karlsson, Interim President and CEO at Södra.

In 2016, Värö was completely rebuilt to become one of the world’s most modern and largest softwood pulp mills with a capacity of 700,000 tpy, but it has the potential for 850,000 tpy.

“It was soon apparent that the new line had even greater potential than we had anticipated. We now see a possibility to further increase production in a cost-efficient way by the end of 2022. This is a major first step toward the 850,000 tpy that is within the framework of the existing environmental permit,” said Marcus Åsgärde, Mill Manager for Södra Cell Värö.

A secure fibre base for the additional capacity is guaranteed as Södra will source the wood needed from the forest estates of its 53,000 members. The project is scheduled to start up in April 2022 and will ramp up until the end of the same year.

“Our control of the value chain, from seedling to value-added products and services, makes Södra a unique business partner. We invest in growing our industrial operations, but only in parallel with ambitious sustainability targets to increase the growth of our members’ forest estates. This investment also facilitates future investments in optimizing pulp quality – that’s important because we know our customers’ expectations will only increase in the future,” said Magnus Björkman, Business Area President for Södra Cell.

Södra is Sweden's largest forest-owner association, with 52,000 forest owners as its members. Södra is also an international forest industry Group, with operations based on processing its members' forest products, such as softwood and hardwood pulp, and wood products. To learn more, please visit: www.sodra.com.



Northeast Forest products

Economic Trends in the U.S. Northeast Forest Industry

By Eric Kingsley, Vice President & Partner of Innovative Natural Resource Solutions

July 21, 2020 - Biomass, pulpwood and sawlogs make up almost all of the wood harvested in the Northeast. Each is important to the sustainability of the region's forest industry, but due to the current state of the economy are facing a handful of economic challenges as well as a few opportunities.

Timber and Lumber

Housing starts, a reliable indicator of market health, enjoyed a sustainable climb after the housing-led recession. The US housing starts surge of the last five years was met with a dramatic collapse when the COVID-19 pandemic hit.

With that said, lumber prices have held reasonably steady. This is due to mills in the southeast, pacific northwest and Canada electing to reduce capacity and therefore limit supply to reflect the decrease in demand. In addition, the forest industry was largely deemed essential across the US throughout the pandemic, and in many places building has continued. Even with the drop in housing starts and home sales slowing nationally, home repair and remodeling has increased significantly. Home centers like Lowe's and Home Depot have reported record demand. Most of that demand is from small quantity purchases, but these "little sales" add up.

Operation of Sawmills

Most Northeast mills — although not all — have been operating close to a "normal capacity" for the spring and mud season. Inventory of logs and sawn lumber has grown to record levels, which could be a sign of tough times ahead. Adding to this surplus may be the stall in building permits across the Northeast, as towns and cities have been operating at reduced capacity due to COVID-19. A bright spot for hardwood mills is that export markets have recovered somewhat as workers return to manufacturing businesses in places like Asia.

Through the spring and to the present, log prices have softened partly from normal spring and mud season conditions and partly from pandemic effects. Overall, the summer will tell us more about the solid wood market.

Mill Residuals

Anyone that purchases a cylinder (log) and sells a rectangle (board) needs a market for everything that's not in that rectangle. The softwood sawmills' markets for this residue have shrunk, and this is a dangerous sign for a healthy industry.

The restart of Old Town, Maine's mill has been some welcome news, but has been offset by the Jay, Maine explosion that decimated the Androscoggin Mill's pulp processing capacity.

Cross-laminated Timber

Cross-laminated timber (CLT) is a market that has lots of unrealized potential in the Northeast. These large-scale, prefabricated panels can be used for construction and are favorable due to their solid engineering and strong design while also being light weight.

While there is promise for this resource and market, ground has not yet been broken on a CLT manufacturing facility in the region. Given its high potential, future plants - if built in the region - are likely to use spruce/fir lumber. Long term, this could also provide a market for hemlock and potentially white pine, as promising research out of UMass-Amherst suggests.

Energy from Biomass

In short, for the foreseeable future, it appears that biomass electricity will not be viable without public support. This conclusion comes from a combination of the cost to pay staff and facility operations, the fuel per megawatt-hour to run these facilities, and more. Renewable Energy Certificates are available for some facilities and, for those that qualify, may be a key piece of their operations. However, once offshore wind and other lower-cost renewables establish a foothold in the region, the biomass electricity industry will largely be uneconomical.

In addition to wood being used for electricity, its energy can also be used for heat. There are a number of biomass heating projects, which have traditionally competed very well in the Northeast and rural areas that rely on oil for heating. However, the return of low oil prices may spell limited near-term growth for wood heat. These facilities have been bolstered by the existence of Thermal Renewable Energy Certificates (T-RECs) in New Hampshire, Massachusetts and soon Maine for wood heating which can provide significant money to support these operations.

Pulp and Paper

The health of pulp and paper is very mill-specific. The product mix of these mills has shown to be critical during COVID-19 due to:

  • Tissue, paper towels and wipes in very high demand
  • Some specialties (personal protective equipment, medical uses, etc.) are very strong
  • Increased packaging demand as large distribution companies like Amazon, UPS and FedEx report increased use of their delivery services
  • A drop in demand for printing and writing paper due to closure of schools and offices and halted brochure use from lack of traveling consumers

Reentry brings uncertainty for the use of paper

  • How will companies integrate work-from-home be integrated into companies and what does that mean for paper demand?
  • Will reliance on online shopping and grocery delivery become the norm?
  • What market shifts will be temporary, and which ones structural?

What we do know is the current recession is bigger than anyone expected, and the economic reopening has many unanswered questions. Ultimately, the solution relies on millions of individual decisions to lead what the "new normal" looks like. The actions of the Northeast's high-density populations in cities and suburbs will be the key to getting the economy back on its feet.

Emerging industries

An emerging industry is a new wood-based insulation facility under construction in Madison, Maine. This plant expects to begin commercial production in 2021 and will use softwood chips to create home wood fiber insulation for the residential and light commercial construction market.

Companies have been looking to across the Northeast for new opportunities in biofuels, biochemicals, cross-laminated timber, Nano-cellulose and more. Furthermore, an effort in Maine and similar cooperative project New Hampshire, Vermont and New York are looking to recruit new wood-use facilities.

Final thoughts on the Northeast Forest Industry

For better or worse, the forest industry is accustomed to boom-and-bust cycles and is experienced in handling them. Northeast markets are incredibly well-positioned compared to other parts of the country and the forest resources and supply infrastructure is incomparable to other regions. In addition, the region's consumers live in close proximity to Northeast timber markets.

This time presents an opportunity for the forest industry to develop new technology and test product innovation that can attract new markets while maintaining traditional markets.

Forest2Market provides pricing data, supply chain expertise and strategic consulting services to participants in the global wood and fiber supply chain. The Forest2Market's unique databases contain more than 400 million rows of transaction data; they are the foundation for all analytics available in the firm's business intelligence platform, SilvaStat360, as well as client resource studies and consulting engagements. To learn more, visit www.forest2market.com.

SOURCE: Forest2Market


Segezha Group Starts Construction of New Container Terminal in Lesosibirsk, Russia

Segezha GroupJune 24, 2020 - Segezha Group, a producer of sack paper, lumber and wood pellets for fuel, announced that construction of a new container terminal at the Lesosibirsky LDK No.1 JSC (Segezha Group, part of Sistema PJSFC) has started. The aim of this project is to provide on-time transportation for the increasing volumes of pellet fuels that are produced by KsyloTech-Syberia LLC.

The construction will be completed by September 2020. The total investment in this project is around 9.8 million.

The project implies concreting of the container terminal site for the storage and shipment of containers with finished products and the laying of service tracks with improved track capacity and carrying capacity of up to 95 tons. This will allow monthly pellet shipments to be increased to five container trains and downtime while handling to be decreased.

Currently, there are only three container trains with eco-fuel that are shipped on a monthly basis from Lesosibirsk, Russia to the Baltic ports for further transportation to Denmark and other European countries.

According to Project Manager Evgeniy Verevkin, all works will be done by in-house manpower without any sub-contracting.

“All necessary materials have been purchased, framework and butt joints have been prepared to make sure the project is running non-stop,” Verevkin explained. “Now, we have already started the phased pouring of steel fiber concrete, which we produce by ourselves at our own ready-mix station.

“At that, passway and site pavement meets the requirements of all the construction norms and regulations and national industry-wide standards applicable to these types of work,” he added.

Segezha Group ranks 1st in Russia (52% of the market) and 2nd in Europe (16.3% of the market) for the production of paper bags, and 1st in Russia (71% of the market) and 4th in the world for the production of high-quality unbleached sack paper. In addition, the company produces large-format birch plywood and sawn timber, along with fiber-based fuel such as pellets. To learn more, please visit: segezha-group.com

SOURCE: Segezha Group


Georgia Ports

International Second Largest Waterborne U.S. Exporter by TEU Volume

June 12, 2020 - International Paper is listed as the second-largest waterborne exporter by volume of ocean containers by The Journal of Commerce. In 2019, IP exported 229,760 twenty-foot equivalent units (TEUs) of its paper and packaging products by ocean container in 2019.

WestRock is listed at Number 8, exporting 81,726 TEUs of paper-based packaging grades of paper and products.

On the import side, Arauco Wood Products (North America), headquartered in Atlanta, Georgia, is listed Number 33, importing 34,755 TEUs of Arauco-produced moulding, plywood, lumber, composite panels and wood pulp in 2019.

CMPC USA, Inc., also in Atlanta, is listed Number 65, importing 18,179 TEUs of pulp and forest products.

SOURCE: Journal of Commerce

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