Mr. Dave Hillman

GLG News by Mr. Dave Hillman, Independent Consultant

GLG News is now G+ Insights

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NewPage On Verge Of Bankruptcy

August 16, 2011

NewPage's competitors didn't follow their $60/st July price increase and market demand has fallen while cash costs continue to escalate. SAPPI didn't announce any price change. Can anything else go wrong? Market Pulp has gone down somewhat which has helped a bit but their debt load is suffocating. They've shut 3 mills but competitors haven't followed suit. Imports from China and Indonesia continue at just under 1 million mt/year (20% of US demand).

Is The Party Over For Dissolving Pulp Producers?

July 29, 2011

Pulp prices began to escalate in the 4Q10 when cotton prices approached $2/lb. List price for DP was US$1500/admt on January lst but spot prices went as high as $300/admt by March/April. In July cotton prices plunged to $1.00 and many Chinese and Indian buyers stopped buyer. Spot prices fell to list price (contracted tonnage) and may actually fall below that number. Rayon is still in big demand so the 4Q may bring some of the business back but pricing is questionable.

Another Mill Jumps On The Dissolving Pulp Bandwagon!

June 17, 2011

The Lessbo paper mill of VIDA AB in Sweden will upgrade its sulphite pulp mill to produce 70,000tpy of pulp and paper - 28,000mt/year will be rayon grade dissolving pulp from 100% Spruce chips. The paper mill will still continue to produce 52,000mt/year of premium uncoated papers. The DP pulp will commence in late August. This appears to be a beneficial option for any smaller pulp/paper mill if it wishes to maintain its profitability in light of rapidly rising cash costs.

Another Newly Developed Dissolving Pulp

June 15, 2011

Naturally Advanced Technologies and Hercules Inc. (a subsidiary of Ashland, Inc) have entered into a joint agreement for CRAiLEX, a high grade dissolving pulp that is reported to exhibit higher grade value pulps that any other hardwood or softwood pulp.It was unclear whether CRAiLEX is derived from regular paper grade pulp. Last week NEO (headquartered in Norway) announced they had successfully patented a way to create high alpha dissolving pulps from ordinary papergrade softwood.

IP's Bid For Temple-Inland...The Focus May Be On Their Papermills

June 7, 2011

Temple Inland is the #3 containerboard/box plant producer in the US with 7 mills and 63 box plants. Of the mills the "jewels in the crown" may be the integrated Kraft mills at Orange, TX (760,000st/year), Rome, GA (895,000 st/year), Bogalusa, LA (913,000st/year) and New Johnsonville, TN (379,000 st/year). TIN's 63 box plants may be superficial in light of IP's acquisition of 83 of Weyerhaeuser's box plants. Some say the US already has twice as many box plants as it needs.

Cosmos Specialty Fibers Begins Producing Dissolving Pulps

May 21, 2011

This older mill, located near Grays Harbor, WN has had several previous short term owners The present owners, Gores Group, is optimistic about becoming a regular supplier to the Far East for high Alpha cellulose dissolving pulps for rayon fiber, cellulose derivatives (chemicals for food and pharmaceutical applications). The mill officially began producing on May 21. Not particularly large by today's standards the mill can produce 140,000mt/year

A First: Converting Paper Grade Pulp Into High Purity Dissolving Pulp

May 21, 2011

Dissolving pulp is a high purity, low yield pulp produced by only a limited number of traditional speciality mills. Now Avilon, part of Neo Industrial Viscose fibers, has successfully developed the means of converting 85+ Alpha Cellulose papergrade pulp into 94+ Alpha dissolving pulp. They are patenting this revolutionary process with the intention of licensing it globally. Conceivably this could put an end to the DP shortage and bring prices down from their present $2200/mt spot level

Fibria's 1Q11 Reports Shows Impressive Results

May 4, 2011

Most impressive was their cash costs for market pulp of R$446/mt down 1% compared to 2010 average...this in spite of higher wages, chemical and maintenance/supplies costs. Net Income was R$389 million vs. 4Q10's $162 million and 1Q10's R$9 million. Fibria declared a dividend in the amount of R$264 million. Significantly higher earnings can be expected over the next 18 months.Net debt was reduced 19% qtr on qtr and 27% year on year.

China Gains On The US But Still #2 Paper Producer

May 3, 2011

China surged in March buying 951,000mt - 65% more than in February and 35.5% over 1Q2010. With this increased demand China was forced to pay more for NBSK (i.e. $80/admt). From 2005-2010 China's paper and board production grew by 30-31 million mt while US production declined by 9.2 million mt. Containerboard was the largest segment at 53.4 million mt with graphic papers and tissue following at 34.37 million mt. Total annual capacity is now 100 million mt.

March's Positive Boxboard Report

April 21, 2011

Boxboard is considered a leading indicator of the nation's business climate. Manufactured goods, fruit, vegetables, beverages etc. must be shipped in corrugated containers. Production in March increased by 2.2% over 2010 and increased 11.1% over February (bad weather may have contributed). Unbleached Kraft folding boxboard also increased year over year as did Recycled Folding Boxboard. All these statistics bode well for a continuing increase in business.

Wausau To Install New TAD Machine To Produce Recycled Products

April 19, 2011

Wausau will be producing "green" tissue and toweling products to meet an anticipated demand from environmentally conscientious customers. Other producers with TAD machines have all opted for virgin cellulose furnishes. Office papers (OP) will be the main raw material but their cost is rising to a level the highest since 1995. Currently it's $246/st FOB the collector's plant. This could still be a bargain if virgin pulp continues to escalate.

Aditya-Birla Purchases Sweden's Domsjo-Fabriker-Rayon Quality Pulp Producer

April 19, 2011

Having previously purchased the shut Canadian NBHK St. Anne's Nackawic mill to convert it to 100% rayon quality dissolving pulp, they now have purchased one of Sweden's top quality specialty mills for US$340 million. An additional $75 million will be spent to raise the mill's output to 255,000 from 210,000 mt/year. The purchase was made through two subsidiaries in Thailand and Indonesia. Birla is a $35 billion/year multinational conglomerate with operations in 27 countries.

Two Chinese Pulp Mills To Convert To Dissolving Pulp

April 12, 2011

China imports huge quantities of hardwood and softwood chips to supply the fiber needs of its many pulp mills. Two mills which have been producing paper grade market pulp, Shandong Sun Paper Co. and Fujian Qingsham Paper Co. are now installing the equipment to produce rayon quality dissolving pulp. These two mills have been producing a total of 1000 mt/day for area papermills. Anticipated start up is 4Q, 2011. These paper mills will now have to find new pulp suppliers - not an easy job today

APP BUYS YET ANOTHER N.A. PULP MILL

April 12, 2011

We had asked the question, "how many is enough" to satisfy APP's appetite for pulp. They had previously purchased 5 N.A. mills. Now their subsidiary Paper Excellence is buying the Pictou, Nova Scotia NBSK mill. A relatively new mill built in the70's it is on the small side - producing only 270,000mt/year. The trees in the mill's "fiber basket" possess slender,, shorter fibers than a typical Canadian conifer. These fibers are ideal for coated paper and smooth/dense UCF for their Chinese mills.

APP Buys Another N.A. Pulp Mill: how many will be enough?

April 12, 2011

With spot DP from Sateri now priced at $3000 in China, APP chose to purchase the shut Prince Albert Pulp mill in SASK (NBSK) to convert it to dissolving pulp.They had previously bought Meadow Lake BCTMP (328,000mt/year), Howe Sound and MacKenzie (BC) NBSK mills and Woodland, ME NBHK mill (439,000mt/year). All this tonnage is expected to be shipped back to China for APP's 27 paper mills and newly purchased 40 TAD tissue/toweling machines.

APP On The Move Again-Considering Brazilian Pulp Mill

March 29, 2011

Asia Pulp & Paper is Brazil's largest customer for BEK. No new production is scheduled to start up before 2013 but then in the period 2013-15 as many as 12.1 million new tons may come on stream. APP, in their Brazilian newsletter and reported in Tissue World is proposing a 500,000mt/year greenfield mill. This pulp will help supply the 40 new TAD tissue machines being installed on the mainland (24) and on Hainan Island (the remaining 16) near their existing pulp mill (3600 tpd)

Nippon and Mitsubishi Paper Mills Hit Hard by Earthquake

March 18, 2011

Nippon Paper Group has 10 mills in the quake region. In four mills operations have stopped completely. In one mill two machines have had to shut down. Other mills are operating normally but now there is a problem of getting necessary supplies of chips, chemicals etc.Mitsubishi has three mills - in one case six employees were injured and sent to hospital. All the mills are shut down at present. . At the Hachinohe mill the ground floor is covered with water.

Gunns-Tasmania....Finally A "Go"

March 11, 2011

After more than 5 years the Federal Gov't has given Gunns full approval to move head with the building of a 1.1 million mt/year eucalyputus market pulp mill. Initially the mill will operate at the rate of only 820,000 mt/year. It's assumed it will take 28 months for the mill to be operational. The cost will now exceed US$2.3 billion. This is expected to be the most environmentally compliant pulp mill in the world. This was a key requirement by all the environmental groups who had objected.

More Mills Announce A Shift To Dissolving Pulp - How Many Is Too Many?

March 8, 2011

Five years ago Birla of India purchased the NBHK mill from Parsons & Whittemore. Later, Fortress Paper announced changing over the Thurso NBHK mill to rayon grade.Mercer Int'l plans to convert a portion of the tonnage at Stendahl and Celgar to DP.SAPPI is studying the Ngadwana, South Africa mill to produce DP.Paper Excellence (APP) has just announced the purchase of the shut Prince Albert mill in Sask. to convert it to DPFinally, several Chinese mills are considering changing over to DP.

On and Off Gunns-Tasmania Mill Nears Environmental Approval

March 8, 2011

Analysis of:Gunns Pulp Mill Approvals Process Extended | news.paperindex.com

Gunns has been a major supplier of Eucalyptus-Nitens chips to the Pacific Rim. In 2003 they announced plans to build a 1.1 million mt/year state-of-the-art market pulp mill. Since then environmental groups have thrown up numerous roadblocks which has delayed groundbreaking. Now the Federal Government has extended by one week the process for final environmental approvals. Gunns is determined to provide the latest, best-available, environmental technology raising the scope to $1.7 billion.

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