1. SCA to acquire G-P's European tissue business for €1.32bn
Swedish paper giant SCA has launched a binding offer to acquire Georgia-Pacific's European tissue business for €1.32bn.
The move includes G-P's consumer and AfH tissue paper products, personal care businesses and manufacturing assets across Europe. Its consumer brands as well as AfH and private label products are also included.
In an interview with Tissue World, SCA executive vice president Mats Berencreutz said the deal will increase the company's geographical reach in Europe, strengthen its product offering and also increase its share in key markets.
He said: "If the outcome of this binding deal is finalised, we will have a leading tissue company. "It will enable us to enhance our presence in key markets, as where we are weaker, G-P is stronger. It is a very good fit, and should we close, it is a fantastic opportunity."
The 15 manufacturing sites involved have 5,000 staff and are positioned across Europe (see box). SCA's current market position in Europe in the consumer market is 25%, while AfH is 19%.
Some 60% of the company's European consumer tissue output is of retail brand products, while 40% is branded. The move will push this to 50/50.
Berencreutz declined to say when the deal is likely to be closed, but added that it will be "several months".
He was also unable to comment on how the acquisition will change the company's market share in Europe, or at local locations globally, or whether the company could rule out further acquisitions in the future.
As to why SCA chose to acquire further in Europe as opposed to an emerging market, he said the business wanted full coverage of the European market.
He added that there are still further possibilities in eastern Europe, and that there is "potential to grow in Europe" generally.
"Global consolidation in the tissue sector is needed, and we have done our fair share," he said.
Fears over possible job losses
SCA is consulting with employee representatives following the binding offer.
Steve Sibbald, national officer of the UK's Unite trade union, said the deal could affect thousands of workers in Europe.
G-P's acceptance of the offer is subject to consultations with its national and European works councils.
Sibbald said that Unite will ensure its members, who are well represented on both works councils, are consulted before any decision is made that potentially affects their livelihoods.
"It always makes me nervous when companies talk about synergies, which usually means consolidation and job losses," he added.
SCA declined to comment on whether there will be any redundancies, or if there are plans to sell or shut down any of G-P's operations after the deal is completed.
Jim Hannan, G-P chief executive and president, said: "G-P employees in Europe have worked hard over the last few years to make significant improvements in the business.
"We believe SCA would be acquiring an excellent business with talented people."
It is yet to be seen whether the offer will cause issues with the European Commission in terms of competition.
2. Petrocart boosts production with Toscotec installation
Romanian-based Petrocart has ordered a complete tissue production line from Toscotec.
It will be installed at the company's Piatra Neamţ site and is expected to be up and running at the beginning of 2013.
Adrian Vais, director general of Petrocart, told TW: “Despite the installation, at this moment we can’t speak of an increase in demand in Romania because everything is decreasing, just as it is around the world.
"However, our project began before the crisis came back. One of the main reasons for the investment was to reduce energy, and we also invested in order to diversify.”
He added that green tissue products are just starting to become popular in Romania.
"I don’t expect to have a big growth in the near future for such products. But the market for good quality tissue, 100% virgin pulp is increasing replacing the qualities obtained from waste, if the difference in price is not too big.
"I expect the price to be key in the future, along with decent quality.”
The Toscotec delivery is based on a turn-key concept and includes a virgin pulp stock preparation line, upgrade and implementation of the existing waste paper plant and flotation units for water recovery technology. It also includes a steel Yankee cylinder TT SYD 12FT.
The machine has a width of 2.85m and a design speed of 1,500 m/min, and the new production line will produce 75 tpd of high-quality toilet and towel grades.
Toscotec said the new project will focus on reduced energy consumption. It will look to reduce the usage of waste paper in the manufacturing process, recovery and re-usage of the process water, and low emissions such as noise and pollutants.
Davide Mainardi, Toscotec sales and customer care director, told TW: "The machine will have a double press solution, a steel dryer TT SYD by Toscotec, and the hood will use co-generation gases produced from a turbine.
"This will also produce electrical energy for feeding the plant. The residual gases from the hood will also be used in a heat recovery boiler. These are all important issues when it comes to energy savings."
He said that Toscotec started supplying to the Romanian market in 2003 with a Comceh (110 tpd), and in 2009 it also supplied a machine for Pehart (110 tpd). "We have a long tradition in that market," he added.
The project received a contribution granted from the European Economic Community and was assigned to Toscotec after an official tender procedure.
Petrocart employs 300 people and was established in 1908. It was previously known as the Commune of Paris Paper and Cardboard Mill, and adopted its present name, SC Petrocart SA Piatra Neamţ, in 1990.
It manufactures paper and cardboard for various products, including tissue products Helga, Salmo and Fana.
3. Cartiera Lucchese to acquire G-P’s Italian tissue mills
Lucart Group's Cartiera Lucchese has signed a takeover agreement to acquire Georgia Pacific's Italian-based Castelnuovo and Avigliano tissue mills.
The deal also includes the company's headquarters in Genoa and its Tenderly and Tutto brands. Castelnuovo is based in Lucca and produces 45,000 tpy, while Potenza-based Avigliano produces 16,000 tpy.
Massimo Pasquini, chief executive of Cartiera Lucchese, said that despite difficult times, the company strongly believes that Italy has "great development" opportunities. He said: "It is possible to work towards strengthening our position in Italy.”
"We are also convinced that this operation will allow us to be more competitive by creating higher value for our customers, consumers and employees in the medium/long term period."
It is understood that the deal is expected to be finalised at the end of the year.
Lucart Group is a European manufacturer of MG paper and tissue products for use in toilet paper, kitchen towel, napkins and tablecloths.
The production capacity of the Lucart Group is 280,000 tpy, divided over nine paper machines and 56 converting lines.
Georgia Pacific Italia has around 300 employees.
4. Tissue PM drying cylinder explosion at Nanning Phoenix injures one in China (News from RISI)
Nov. 23, 2011 (RISI) -A blast on a tissue paper unit's iron drying cylinder slightly injured one worker at Nanning Phoenix Pulp & Paper in China.
The accident happened on a Kawanoe Zoki unit the night of November 12 at the firm's mill in Nanning city, Guangxi autonomous region.
According to a source from the firm, the Japanese supplier has sent people to the mill, and an investigation is still underway.
The machine is a recent purchase, having started up in 2008. However, Kawanoe Zoki refused to comment on the accident.
It is estimated the machine will take at least eight or nine months to restart.
An industry insider also reported that Italian company Toscotec, rather than Kawanoe Zoki, is being tapped to supply a new steel drying cylinder.
The 20,000 tpy PM has a trim width of 3.4 m and a design speed of 1,000 m/min.
The mill also houses 12 other tissue paper machines, including a 12,000 tpy Kawanoe Zoki PM and then 11 units from domestic suppliers with a combined capacity of around 13,000 tpy.
5. Henan Luohe Yinge to fire up 60,000 tpy tissue paper machine (News from RISI)
Nov. 17, 2011 (RISI) - Henan Luohe Yinge Paper plans to start up a 60,000 tpy tissue machine by the end of this year at a greenfield mill in Luohe city, Henan province. Installation work of the Voith Paper unit has almost wrapped up, according to a contact from the company.
The PM has a wire width of 5.6 m, and a design speed of 2,000 m/min.
The company has also ordered an identical tissue paper unit from Voith Paper, and the machine is scheduled to start up at the new site in early 2012.
At its existing mill, also in Luohe, the firm operates several tissue paper machines with a combined capacity of 40,000 tpy.
6. G-P to sell stake in tissue joint venture İpek Kağıt
Georgia-Pacific is set to sell its 50% stake in tissue company İpek Kağıt to its Turkish partner, the Eczacıbaşı Group.
Eczacıbaşı aims to become the sole owner of Turkish tissue paper manufacturer İpek Kağıt.
The share transfer resulting from the agreement is expected to take effect in early 2012, subject to regulatory approval.
Eczacıbaşı group chairman Bülent Eczacıbaşı said that the Eczacıbaşı Group aimed to expand more rapidly in world markets while maintaining the company’s leadership in Turkey.
"Since 1989, when İpek Kağıt acquired an international partner, it has worked highly productively and compatibly with all its international partners,” he said.
"The primary sources of sustainable growth will be our innovative products and new geographies, supported by our continued leadership in quality.”
Ipek Kagit operates a 105,000 tpy tissue mill in Yalova, northwestern Turkey, and two tissue converting plants: the Manisa plant in western Turkey and the Almaty plant in Kazakhstan.
7. Nanning Phoenix to delay start up of 30,000 tpy tissue paper unit (News from RISI)
Nov. 10, 2011 (RISI) - China's Nanning Phoenix Pulp & Paper plans to push back the start up date of a 30,000 tpy tissue paper unit at its mill in Nanning city, Guangxi autonomous region, to April next year.
The machine was initially scheduled to be fired up by mid-2011, but civil engineering work got hit by a delay, according to a contact for the company.
The unit, supplied by Andritz, has a trim width of 3.65 m, and a design speed of 2,000 m/min.
The scope of the supply contract included a stock preparation plant, a headbox, a hood and a steel yankee drying cylinder.
A mixture of bleached softwood and hardwood kraft (BSK and BHK) pulp will be used to feed the unit.
The BSK pulp will come from the firm's own 150,000 tpy fibre line, and BHK pulp is expected to be sourced from the local market.
Jumbo rolls will be converted on-site into end products.
The mill already houses 13 tissue paper machines with a total capacity of 45,000 tpy, including two from Kawanoe Zoki and 11 from unknown domestic suppliers.
8. Egypt’s Mediterranean Tissue buys tissue PM from Pro-Gest mill in Italy (News from RISI)
Nov. 17, 2011 (RISI) - Mediterranean Tissue Company has bought another second-hand tissue machine for installation at its Alexandria mill in northern Egypt.
The 90 tpd unit has a width of 275cm and a maximum speed of 1,700 m/min. It was bought from Pro-Gest's Cartiere Villa Lagarina mill in Trento, northern Italy, at a price of €8m.
Installation will start at the beginning of next year and the machine is scheduled to be operational by June 1, 2012.
Earlier this year, Mediterranean Tissue Company started production on its first tissue machine, PM 1. The unit currently produces some 40 tpd of paper in basis weights of 14-14.5 g/m².
In higher grammages, it can reach a capacity of 50-55 tpd, a company spokesperson told PPI Europe.
The firm is also building and equipping a converting factory for sanitary tissue products, scheduled for commissioning early next year.
Mediterranean Tissue Company employs approximately 80 people at its Alexandria mill and will hire another 15-20 people when it launches production on the second PM.
The Cartiere Villa Lagarina mill shut down the tissue PM 3 sold to Mediterranean Tissue Company last year.
It still operates one tissue machine, PM 5, with a capacity of some 100 tpd, as well as a recycled containerboard machine with a capacity of some 250,000 tpy.
9. Metsä Tissue appoints M-real's Mika Joukio as chief executive
Mika Joukio, head of M-real's consumer packaging business and a member of M-real's management team, has been appointed as chief executive of Metsä Tissue.
He will take up the position, where he is also a member of the Metsäliitto group executive management team, in February 2012.
He will report to Kari Jordan, president and chief executive of Metsäliitto Group and chairman of the Metsä Tissue board of directors.
Both M-real and Metsä Tissue are part of Metsäliitto Group.
The company was unavailable to comment further at this time
10. Trio of green certifications for Little Rapids
Healthcare products manufacturer Little Rapids Corporation has boosted its environmental credentials after it become FSC, SFI and PEFC certified.
The American-based company said it obtained the standards in direct response to customer demand for environmentally friendly products.
Mark Bosin, director of quality and sustainability, told TW that the certification process was fairly extensive.
He added that the initial costs to establish the proper procedures required a moderate investment, including using a consultant familiar with the requirements for these certifications and the investment of the company’s employees' time in putting the correct structure in place.
"The ongoing costs to maintain the certifications are more nominal,” he said.
As to whether certified products are more expensive for the consumer, Bosin said: “It is hard to pinpoint specific cost differences between certified and non-certified products, and we would work with any customers to determine pricing based on their particular project.
"Today, there is an inherently higher cost structure for certified products because certified raw materials cost more for us to purchase, and there are increased process costs associated with tracking the product from papermaking through converting.”
However, he added that certified products “certainly offer a benefit” to companies that want to clearly communicate their commitment to protecting the environment.
Operator at Little Rapids
"As demand for these products increases and supply becomes more readily accessible, the cost would likely change as well,” he said.
Little Rapids manufactures products for the healthcare, beauty and specialty paper markets.
The company's core product lines serve the medical and beauty market segments under the Graham Professional brand, and the specialty paper market under the Shawano Specialty Papers and Larson Converting brands. It has its headquarters and manufacturing facilities in Green Bay, and also a paper manufacturing facility in Shawano, Wisconsin.
11. Cascades Tissue Group launches Elite Tade hardwound roll towels
Towel and tissue paper producer Cascades Tissue Group has launched its Elite Tade hardwound roll towels product.
The company said the product is the first-of-its-kind now available to the AfH market.
It is made on the company’s newly installed Atmos machine. Originally developed by Voith Paper's Tissue Process Technology Center in Brazil, Cascades said that the “TAD equivalent” (TADe) process produces a soft feeling, strong and absorbent paper that requires fewer sheets.
The company claimed that the Voith Atmos can work with 100% recycled fibre and less chemical products, which it said makes for a unique way to manufacture premium toweling paper with a lower environmental footprint.
Suzanne Blanchet, president and chief executive officer of Cascades Tissue Group, said: “Since its foundation, and well before it became a buzzword, Cascades believed in sustainable development.
"That is why we have invested in a new TAD-equivalent technology, which enables us to produce premium products, while being even more mindful of the environment.”
Suzanne Blanchet, president and chief executive officer of Cascades Tissue Group
The Tade Cascades Elite hand towels complement the Cascades Tandem series of hand towel dispensers. Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fiber. It employs 11,000 staff across 100 units in North America and Europe.
12. Södra stops production at Folla mill
Södra has said it will stop production at its Södra Cell Folla pulp mill in Norway.
The mill supplies Chemi-Thermo-Mechanical-Pulp extensively into the tissue sector. Södra also said it will impose a market shutdown at its Södra Cell Tofte pulp mill, also in Norway, from the beginning of week 50 in 2011.
Tofte supplies limited NBSK volumes into the tissue sector.
The “market-driven” downtime is in response to a “weakened demand for pulp” as a consequence of international financial unrest, according to the business.
In addition, Södra Cell Mörrum in Blekinge will take an extended maintenance shutdown for the same reason as of 19 November to 7 December inclusive.
A spokesman for the company said that Södra is ensuring it has sufficient stock available to cover anticipated demand.
