Paper Chain
The export market continues to define the recovered fiber industry as worldwide demand for recovered paper continues to climb, according to George Chen of G&T Trading Co., who moderated the Spotlight on Paper session at the 2007 ISRI (Institute of Scrap Recycling Industries Inc.) Convention & Exhibition held recently in New Orleans.
Chen said annual new demand has reached some 9.5 million tons, with much of that demand coming from offshore export destinations like China. While this high level of demand creates a number of growth opportunities for the industry, meeting the needs of such a hungry market also presents its own challenges. First of all, Chen said that while the industry has raised the target recycling rate from 50 percent to 55 percent, there still may not be enough material to supply future demand.
Chen also identified the growing popularity of single-stream recycling programs as both an opportunity and a challenge to the industry. While single stream does offer the benefit of increased recovery, the programs have been criticized for delivering paper of lesser quality. According to Chen, mixed paper from single-stream sources has suffered, particularly in China and India. He said both countries have rejected loads of mixed paper over quality issues.
According to Chen, China remains one the key players in the global recovered fiber market. It is second only to the United States in paper and paperboard production, according to figures provided by Chen, and the production of paper and paperboard in China has doubled in the last decade.
Domestically, the production capacity story is not as bright, according to Edward Tucciarone, vice president of sales at Smurfit-Stone. Tucciarone said U.S. mill consumption of recovered paper has been on the decline—down 7 percent relative to the 1999 peak.
However, the recovery rate is growing in the United States, an encouraging sign, according to Tucciarone. Old corrugated containers (OCC) boast a particularly impressive recovery rate of 76 percent, he said.
While China may be one of the biggest names in the paper export market, it’s not the only country with a strong appetite for recovered fiber. Mexico is also a buyer of the world’s recycled paper, according to Rogelio Silva of Durango McKinley. In 2005, Mexico consumed some 4.2 million metric tons of secondary fiber, and more than 58 percent of that fiber consisted of brown grades, according to Silva. About 38 percent of the material consumed in 2005 was imported, which represents about 1.6 million metric tons.
According to Silva, total paper consumption in Mexico is projected to reach 8.1million metric tons by 2010. Consumption of secondary fiber is expected to grow to 5.1 million by that time.
(Additional news about paper recycling markets, including breaking news and pricing, is available online at www.RecyclingToday.com.)
Weyerhaeuser Considers Possible Sale of Recycling Business
The board of directors for Weyerhaeuser Co., Federal Way, Wash., has authorized a process to consider a broad range of strategic alternatives for its containerboard, packaging and recycling business.
Alternatives range from continuing to hold and operate the assets to a possible sale or combination. "We are positioning Weyerhaeuser to grow in areas that present the greatest opportunities for our shareholders and employees," says Steven R. Rogel, chairman, president and chief executive officer. "The containerboard, packaging and recycling segment is operated by some of the finest people in the industry, and I appreciate their ongoing efforts to improve the performance of these businesses throughout this process."
Weyerhaeuser will not speculate on the outcome of the review or whether it will result in any specific course of action.
WRAP Launches Project to Stimulate Recycled Content Use in U.K. Magazines
U.K.-based Waste & Resource Action Programme (WRAP) has launched a project that seeks to boost the use of recycled content paper in magazines in the United Kingdom. It will provide a commercial and environmental case to accelerate use across the industry and encourage further investment in recycled magazine paper mills, according to WRAP.
The first step is called "Phase 1 – A Review of Opportunities and Potential Barriers to Using Recycled Content Magazine Paper." In this phase commercial trials will be run and case studies developed.
"Currently, magazine publishing in the U.K. consumes around 1 million tons of paper per year, and only a small fraction (1-3 percent) contains recycled content. We are investigating the scope to increase the proportion of recycled fiber used by magazine publishing to ensure long-term end markets for recovered fiber. Increased demand and use of recycled content paper will increase the diversion of paper from landfills and improve the likelihood of investment in new recycled content paper capacity," says WRAP Paper Technical Manager Mike Burgess.
The second phase will provide insight into the advantages and disadvantages of using recycled content paper. It will provide an assessment of risk factors associated with change in paper, as well as measures that can mitigate disadvantages to using recycled paper. The project will include:
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Practical print trials using recycled content paper on a range of web- and sheet-fed scenarios to collect both technical and cost information to allow publishers to confidently specify the use of papers with recycled content;•
Production of case studies showing the experiences of a number of printers and publishers using recycled paper for a range of applications (These will provide a comprehensive perspective on the decision making process and issues surrounding the choice and regular use of recycled papers.);•
Investigation into the impact of increase recycled content magazine paper on the U.K. recycled newsprint industry; and•
Recommendations on the route forward for magazine publishers in the U.K. to use more recycled content paper.More information is available at www.wrap.org.uk.
Abitibi and Bowater Announce Amendment to Merger Deal
Abitibi-Consolidated Inc. and Bowater Inc. have announced that they have amended the combination agreement signed Jan. 29, 2007, in which Abitibi-Consolidated and Bowater agreed to combine their companies in an all-stock merger of equals.
The purpose of the amendment is to ensure that the combination remains tax deferred for U.S. resident holders of Abitibi-Consolidated shares.
As amended, the combination agreement limits the number of exchangeable shares that may be issued to an amount that, when combined with the exchangeable shares currently issued to holders of shares of a Canadian subsidiary of Bowater, is less than 20 percent of the total voting power of the combined company AbitibiBowater. In the event that eligible Abitibi-Consolidated shareholders elect to receive more exchangeable shares than are available, the remainder of their shares will be exchanged for shares of AbitibiBowater common stock, pro rata to their shareholdings.
According to a press release, Abitibi and Bowater believe that it is unlikely that eligible Canadian shareholders of Abitibi-Consolidated will be limited in their ability to receive exchangeable shares and to benefit from a tax deferral for Canadian income tax purposes.
Abitibi-Consolidated produces newsprint and commercial printing papers as well as wood products, serving client in some 70 countries from its 45 operating facilities. Abitibi-Consolidated is among the largest recyclers of newspapers and magazines in North America, diverting approximately 1.7 million metric tons of paper from landfills per year.
Bowater Inc. produces coated and specialty paper and newsprint. In addition, the company sells bleached market pulp and lumber products. Bowater has 12 pulp and paper mills in the United States, Canada and South Korea. It also operates six recycling plants and is one of the world’s largest consumers of recycled newspapers and magazines.
The two companies announced plans to merge in January 2007. AbitibiBowater will own or operate 32 pulp and paper facilities and 35 wood product facilities located mainly in Eastern Canada and the Southeastern U.S.
More information is available at www.abitibiconsolidated.com.
ERPA Confirms Board Member
The European Recovered Paper Association, Brussels, Belgium, has confirmed Thomas Braun as a member of the executive board.
Braun is the managing director of the bvse-Bundesverband Skeundarrohstoffe und Entsorgung e.V., Bonn/Berlin and represents the interests of the German recovered paper industry at the ERPA.
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