The following presentation was given during the annual luncheon/meeting of the National Association of Paper Stock Women.
As a 100% recycled linerboard mill with 2 paper machines and a medium machine slated for start up this June, we are continuously exploring the fiber use outlook and future procurement challenges and strategies.
Solvay Paperboard is a partnership of four premier independent corrugated boxmakers. The largest partner is Southern Container Corp, headquartered in Long Island, NY; Schiffenhaus Packaging, Newark, NJ; Jamestown Container, in Jamestown, NY; and TenCorr Packaging, located in Toronto, Ontario.
Solvay Paperboard’s business philosophy has built in strategies to help insulate itself as best as possible to scenarios of tough economic times and market volatility. One of our key strengths is that we are not a market mill and are able to place all our volume, if necessary, with our partners. This produces more stability for all of us.
The key to all of our strategies is based on quality. As an ISO register mill, procuring only secondary fiber as our raw material, and almost exclusively, Old corrugated containers, maintaining the quality of a secondary paper stock which is produced manually and may not be technically perfect, is by far, our greatest and most continuous challenge.
Last month, Ralph Simon, the ISRI Director of Standard and Practices, spoke at the Paper Recycling Open Forum in Montreal. As he reviewed the standards and practices of buying and selling recovered paper, he stated, if the mill isn’t getting the quality they want, it’s the buyer’s fault. As snickers went through the audience (well everyone knows it’s the buyer’s fault, whether it’s suppliers or the mill), I realized what he was telling us was correct. The ISRI standard is just the barest of specifications for a grade of paper that has so many uses and applications.
Taking ISRI’s OCC specifications for example, it only takes a few lines of the page. That leaves a lot of room for latitude and interpretation. So at Solvay, we started with the ISRI specification and expanded it to reflect our interpretation of outthrows and prohibitives. Our specifications are the first thing we present when a supplier who inquires about qualifying their OCC pack to the mill.
We back up our specs with an Inbound Quality Evaluation document. This is the supplier’s quality document for his load. Each load of OCC is graded for quality based on the level of contaminates. The paper is separated and stored by grade in the warehouse so we are able to put a consistent quality feed up the conveyor. This is critical. And it was a lesson hard learned after the mill experienced a number of months of high levels of off spec production by what is now referred to simply as the “Wax War”.
Off-spec production:
1999-3.1%
2000-2.5%
2001-1.2%
2002-0.9%
Through the 2nd half of 99 and 1st quarter of 2000, we struggled daily as we started to define and develop our quality assurance program; we steadily decreased off spec production. Even though fiber procurement shouldered the lion’s share of responsibility, we accomplished even more with the support of the production team. Changes to our technical and mechanical processes also made a significant impact to good paper production numbers.
We think we are on to something! It continues to be a challenge, by virtue of the fact that it is a secondary fiber, but we do maintain a constant vigil on quality, even when confronted by the Ten Commandments of a Recovered Paper Supplier. You may have seen this in the past, but it’s always necessary to review every 5 or 6 years!
In addition to the quality factor, our procurement strategies include:
· Sourcing long term contractual agreements and providing excellent service to our suppliers.
· Explore and expand our geographic market to optimize transportation costs of round trip moves.
· Work with our partners in full loop recycling programs
· Source new grades of alternative feedstock for the mill
· Work with county and state recycling organizations to explore and expand fiber recovery efforts.
· Directly source fiber supplier with generators.
Fiber Outlook is always a moving target, one I don’t prescribe to even trying to forecast. But I will give you a quick review of RISI’s most recent market forecasts for this year.
· Newsprint: 0.2% growth
· Uncoated Free Sheet: flat
· Supercalendar: 3% growth
· Coated Groundwood: 2% growth
· Containerboard: 2% decrease
· Boxboard: 0.8% growth
· Tissue: 1% growth
· Recovered Paper: 0.5% growth
As you can see, the markets aren’t going to be hopping this year and growth has slowed, compared to previous years, but I think, even a little growth is enough to encourage us to move forward to capture out share of the market.
Solvay Paperboard is geographically located in Central New York to tap large resources of available recovered paper in the Northeast United States. Low cost manufacturing will allow us to be cost competitive during periods of economic hardship as well as intense competition. Our strategy focuses on an aggressive posture of direct sourcing and excellent service for our suppliers. Solvay Paperboard is positioned to grow to the 2,000 tons per day level because of these unique capabilities. The author is fiber procurement manager for Solvay Paperboard.
More information on the National Association of Paperstock Women may be obtained by clicking the above link.
To see the Power Point Presentation click the below link.