PAPER COMPANY NEWS
SAPPI QUARTER 2 RESULTS
According to the Sappi Quarter 2 Directors’ report , the quarter was characterised by a sharp decline in Sappi sales volumes, which was driven by declines in demand for coated paper and pulp in our major markets. Sales volumes declined approximately 24% compared to the corresponding quarter last year, including the mills acquired from M-real on 31 December 2008 (the Acquisition) in both periods. Actual sales volumes including the new business were approximately 95% of volumes reported a year ago.
Average prices realised by the group in the quarter were 6% lower in US dollar terms than a year ago, mainly as a result of the sharp fall in pulp prices, which fell 32% relative to a year earlier. Prices realised for coated paper were higher than in the corresponding quarter a year ago.
Sappi curtailed production extensively in each of their regions during the quarter to match supply with demand and reduce inventories. Finished goods inventories were reduced by 13% in volume terms compared to December 2008, excluding the Acquisition.
Raw material, in particular pulp, and energy prices were lower in the quarter compared to the prior quarter and corresponding quarter last year. This had some effect on costs in the quarter; however, Sappi expects that a greater effect will be apparent in our third quarter now that higher cost inventories have been depleted.
The operating result for the Acquisition was a loss of US$2.6 million for the period since 31 December 2008. The integration of the Acquisition has progressed well and the achievement of Sappi’s previously announced synergies of Euro 120 million per annum within 3 years is on track.
Operating profit for the quarter was US$6 million compared to US$221 million in the corresponding period last year. Special items comprising mainly a favourable adjustment to plantation price fair value offset by the North American restructuring provision amounted to US$23 million in the quarter compared to a favourable adjustment last year of US$124 million.
Net finance costs for the quarter increased to US$40 million compared to US$27 million last year as a result of increased debt and the effect of interest capitalised a year ago. The group did not benefit from tax relief on reported losses as a result of tax losses in certain regions that could not be raised.
The basic loss per share was 7 US cents for the quarter compared to EPS of 43 US cents a year earlier, which was favourably impacted by special items of 30 US cents per share.
SUPPLIER NEWS
ANDRITZ to rebuild and upgrade two recovery boilers in North America
International technology Group ANDRITZ received two major orders for recovery boiler rebuilds/upgrades from Domtar in Canada and Weyerhaeuser in the USA.
For Domtar Corporation, ANDRITZ PULP & PAPER will rebuild the existing boiler at Kamloops, BC Canada, to enhance its long-term efficiency and reliability. The scope of supply includes a new furnace floor and generating bank, air system modifications, gas burners, furnace panels, circulation improvements, and a new dissolving tank and vent system. The rebuild is scheduled to take place early next year and the recovery boiler should be re-started in May 2010.
For Weyerhaeuser Company, ANDRITZ PULP & PAPER will upgrade the existing recovery boiler at New Bern, NC USA. The investment is part of an optimization project of the recovery system, which includes an upgrade of the evaporation system. The supply includes additional heating surfaces, air system modifications, and systems for burning diluted and concentrated gases collected from mill processes.
Clariant to launch strategic production facilities in Zhenjiang, China
Leading specialty chemical company Clariant is building a surfactants plant in Zhenjiang, Eastern China to help meet the needs of the country’s growing demand. The new facility is scheduled for production in the middle of 2009.
The new surfactants plant in Zhenjiang is well located on the Yangtze river between Nanjing and Shanghai, with good access to Clariant’s key customers in the region. This facility, together with Clariant's existing plant in China, in Tianjin, will complement the company’s already well-established manufacturing capabilities in Asia for Clariant’s Functional Chemicals Division. Three other production facilities are operating in Japan, Indonesia and Australia.
Clariant’s business in China has grown substantially in recent years, with a high annual growth rate, e.g. in the personal care sector. The decision was taken to build a new surfactants plant in Eastern China, to further sustain this growth.
“In line with the company’s strategy to further develop our business in the rapidly growing markets of Asia, this investment demonstrates Clariant’s long-term commitment to China. Despite the current economic downturn, the medium and long-term prospects for the region are strong. The new facility is built to the highest environmental and production standards and will ensure we have the capacity to serve our customers' needs in the future,” said Siegfried Fischer, member of Clariant’s Executive Committee with responsibility for the Functional Chemicals Division.
Voith Paper: Perlen Papier AG Orders Complete Newsprint Production Line
Perlen Papier AG, Switzerland, placed a major order for the delivery of a newsprint production line with Voith Paper on January 26, 2009.
The PM 7 overall system is laid out for the production of 360,000 metric tons per year (MTPY) of newsprint in a basis weight range of 40 - 55 g/m2. Having a wire width of 10,450 mm, the paper machine has been designed for a maximum production speed of 2,000 m/min. PM 7 will produce standard and upgraded newsprint of the highest quality.
The aim of this new overall system is to replace the existing PM 5 with its capacity of 130,000 MTPY with a new high-efficiency production line. Integrating the new line into the existing infrastructure had been a particular challenge.
To supplement the existing recovered paper preparation system, Voith will supply a new stock preparation line with a capacity of 700 MTPD (metric tons per day). The well proven TwinDrum pulper with a capacity of more than 1,400 MTPD will feed both lines to meet the special demands of reliably slushing recovered paper bundles, which are very common in Switzerland.
It is followed by a two-stage flotation system, screening and dispersing machines, as well as machines for dewatering and bleaching. The complete feeding system of the pulper with automatic de-wiring and rejects and sludge disposal is also included in the scope of supply.
New World Record at Rhein Papier PM1 Newsprint
The Heimbach Group congratulates Myllykoski Rhein Papier and the crews of PM1 on this great achievement. At the same time the Heimbach Group are delighted that the successful installation of their non-woven ATROCROSS press felt contributed to the World Record on this highly modern, almost 9 metre wide newsprint machine.
In the dryer section a SECOPLAN.XF flat yarn dryer fabric also contributed to this success.
The World Record performance over 24 hours with sensational time efficiency also confirms the optimal teamwork both at Rhein Papier and at their suppliers.Heimbach extends their best wishes to Rhein Papier for continued success in the future.
Voith Paper: Higher Cylinder Tempature due to PikoClean
In January 2008 two drying cylinders of Stora Enso PM 2, Uetersen,Germany were coated with PikoClean.
The cylinders are now running for over one year and the paper mill is very satisfied. The surface quality of the cylinders is still very good and PikoClean eliminated deposits and fiber picking. Furthermore it allowed an increase of the surface temperature from 50°C to 60°C. An additional benefit is that the cylinders can be run almost without doctoring.
PikoClean is a dirt repellent non-stick coating that has been recognized as one of the most successful on-site coating in the paper industry. PikoClean is available in different variations - all designed to the respective application. Furthermore, it is the most applied on-site coating on dryer cans and guide rolls worldwide.
PikoTeknik is a member of the Voith Paper group. It is specialized in on-site maintenance, grinding and coating of pulp and paper machine rolls and cylinders.
