Paper Supplement -- Consuming Passion

Newsprint manufacturer SP Newsprint Co., Atlanta, has made major capital investments reflecting its commitment to using recovered paper in the creation of its products.

Along with its devotion to the use of recovered fiber, the company and its officers have historically also shown the ability to be critical of recycling industry practices when they see shortcomings.

Both current and former officers have involved themselves with recycling industry associations, committees and events, providing SP Newsprint and its recycling subsidiary, SP Recycling Corp., with formats through which to share its findings and to urge recyclers to strive for higher quality standards and best practices.

IN PRINT. For America’s daily newspaper publishers, buying rolls of newsprint has always been one of their foremost operating costs.

In the 1970s, publisher Media General Inc., Richmond, Va., (later joined by fellow publishers Cox Enterprises, Atlanta, and Knight Ridder, San Jose, Calif.) created the Southeast Paper Manufacturing Co., centered around a paper mill established in the pine forests of Georgia.

Media General publishes 100 weekly and 26 daily newspapers, including the Tampa Tribune, Richmond Times-Dispatch and Winston-Salem Journal; Cox Enterprises publishes 25 weekly papers and 17 dailies, including the Atlanta Journal-Constitution, Austin American-Statesman and Dayton (Ohio) Daily News; among the stable of 31 Knight Ridder newspapers are the St. Paul Pioneer Press, Fort Worth Star-Telegram, San Jose Mercury News and Miami Herald.

Even though the Dublin, Ga., mill is located near the forest resources of Georgia, the company now known as SP Newsprint Co. created its mill to run on recycled paper content. On its Web site, SP Newsprint states, "We believe in conserving natural resources by recycling and operating in an environmentally sound manner."

The company has operated the Dublin mill since 1979, expanding its capacity while all the time remaining committed to using recycled fiber as the furnish. With the acquisition of a mill in Newberg, Ore., in 1999 that uses 50 percent recycled paper furnish, SP has become one of the leading consumers in North America of the old newspapers (ONP) grade of scrap paper.

"Our mill in Dublin runs on 100 percent recovered content," says SP Recycling President Thomas Hahn.

SP Newsprint CEO Joseph R. Gorman says the company produces about 1.1 million tons per year of newsprint, making it "the fourth-largest producer in North America."

He says that about 25 percent of the company’s newsprint rolls are sold to the three joint venture partners who co-own SP Newsprint Co., while the remaining 75 percent goes out to the wider market. "We take pride in the quality of our newsprint," Gorman remarks. "We’re a low-cost producer because our machines have been running at full capacity for an extended period of time."

The operating strength of the machines has gained positive attention for SP Newsprint Co. The Pulp and Paper Products Council, Montreal, has awarded SP’s No. 2 Newsprint Machine in Dublin as "the World’s Most Productive Newsprint Machine" for two consecutive years, while the Newberg Number 5 Machine has been recognized by the council as the "World’s Most Efficient Newsprint Machine" for three out of the last four years.

"We pride ourselves on the continuous improvement that we’ve had from a quality and production standpoint," says Gorman. "To be industry leaders in operational efficiency and productivity for two years running has been gratifying. Those machines are not the newest ones out there, but they have maintained their competitive edge, thanks in large part to our outstanding workforce."

Gorman and Hahn say that much of the company’s operational excellence can be traced to its sharp, single focus. "We make one grade of paper," says Gorman. "By doing that, the whole focus of our company from newsprint production to raw materials can be focused on providing one high-quality product."

On the raw materials side, that means procuring scrap paper—especially the ONP grade—in abundant amounts at a favorable cost and in a state of quality that yields high-quality pulp and paper to meet SP’s quality standards.

As a way of ensuring a supply that meets those criteria, SP Newsprint Co. established its SP Recycling Corp. subsidiary in 1979 and has watched it grow into an important part of the overall company.

YESTERDAY’S NEWS. From its inception, it was clear to SP Newsprint Co. that it had a vested interest in establishing a closed-loop process to take back the old newspapers that it was helping to create.

The SP Recycling Corp. subsidiary has emphasized reaching into post-consumer markets to collect the ONP grade, focusing initially on reaching the geographic market surrounding its Dublin mill.

For more than two decades, George Elder served as a vice president of materials management and in other roles with SP Recycling, helping the subsidiary broaden its scope and widen its geographic reach. Elder retired in mid-2004 after spending 25 years with the company.

Elder says SP Recycling has "24 facilities, with their core mission being to deliver fiber to the mills." He says managing the facilities requires monitoring three key factors: improving quality, controlling costs and increasing tons collected.

Even while expanding SP Recycling to feed its hungry mills, Elder says the company has also stuck with what it knows works. "The heart of the program at our division has remained non-profit newspaper drives," he comments. "We’re one of the few companies that never dropped the old-fashioned newspaper drive. That component probably generates about one-third of our raw material supply."

SP has established relationships with not-for-profit groups in the Atlanta area, especially. "It’s our preference, transportation-wise, and three-fourths of the state’s population is there," Elder notes.

The addition of the Newburg mill has sparked a second effort in the Pacific Northwest, and the overall need for ONP from any source has caused SP Recycling to locate recycling facilities in other states and to accept materials beyond ONP to keep its locations viable.

"Competition has forced us to grow into the Mid-Atlantic and other regions, such as our two recycling centers in Kentucky and Ohio," says SP Recycling Vice President of Fiber Supply and Marketing Ralph Simon. In terms of material it takes in, SP Recycling is now handling most grades of paper and additional curbside commodities such as metal food and beverage cans and plastic containers.

Simon estimates that SP is handling curbside materials generated by as many as 3 million homes, although it has entered this market with reservations and concerns.

"We have reluctantly entered that curbside segment," says Simon. "Quality can be a concern with that material. We have an extremely high quality specification on our finished paper, so it can require more processing costs to meet our quality specs, especially when working from ONP that must be pulled from commingled materials."

SP Recycling, SP Newsprint and its officers have been among the louder voices insisting that paper recyclers must be mindful of their quality standards. The company’s leaders have not just made statements and left the work for others, however. Rather, they have demonstrated a willingness to serve on industry boards and committees with direct involvement in industry affairs.

GETTING INVOLVED. In his 25 years with SP Recycling, George Elder served on the boards and committees of a number of paper industry and recycling industry associations.

At the same time he was serving increasingly responsible roles within SP Recycling, Elder was involved in numerous industry trade associations on behalf of the company, including the Georgia Pulp & Paper Association, the American Forest & Paper Association (AF&PA) and the Paper Stock Industries (PSI) Chapter of the Institute of Scrap Recycling Industries Inc.

Elder has not been alone in his efforts, by any means. Current and former SP Newsprint and SP Recycling officers are active members of the AF&PA, the PSI Chapter of ISRI and other trade groups and speak at industry trade shows regularly.

This year, Dublin Mill Manager Jack Carter has been recognized by the Paper Industry Manufacturers Association (PIMA) with its 2004 Mill Manager of the Year Award, which honored Carter for demonstrating leadership and management skills to maximize efficiency and productivity at the mill.

Since starting the Paper Recycling Conference & Trade Show in 2000, the Recycling Today Media Group has featured former SP Newsprint CEO Dr. James Burke as a keynote speaker, and at this year’s show SP Recycling President Hahn offered a presentation on the good news (tonnage is up) and the bad news (contamination is also up) regarding fiber collected from curbside recycling programs.

In his 2002 presentation, Burke message to recyclers regarding contaminants in the paper recycling stream was clear: "If we can’t get a clean product, we’ll have to adjust our mills to use more wood."

This summer, Hahn was more tempered in his remarks, saying SP remained committed to recycling. But he added that contaminants such as plastic and glass in the recycled fiber stream cost paper makers as much as $51 million annually.

FORWARD DIRECTION. SP’s officers are aware that they may use their public speaking roles as a chance to provide a "bully pulpit," but they say that broadcasting the quality message will ultimately benefit the entire industry.

"One thing that has been constant over the years so that we can make world-class products is that we have to send a uniform, high-quality stream of material to the paper making machines," says Gorman. "Our quality system maintains excellent feedback, all the way back to suppliers, so that there is an agreement between us and every supplier as to the quality."

Hahn says that for both SP Newsprint mills, "high-quality raw material is our mantra. We have to have it and we demand it first and foremost for the mills."

Hahn also stresses the quality message, saying that for the SP Recycling subsidiary, procuring a quality supply goes hand-in-hand with managing costs. "Our mission is to provide a stable supply of ONP at a low cost to the mills," he remarks. "We are looking for long-term contracts with people who want to supply a quality product to the mill."

Hahn says that working together with suppliers and with the mills is in everyone’s best interest. "We try to separate ourselves with relationships," he says. "If you provide a stable market for municipalities and offer stable floor pricing with no surprises, the stability with these communities means a lot. If you treat people fairly and ethically, you ride out the waves and the blips in the economy.

"It’s still a relationship business," Hahn continues. "On our side, with all the ups and downs in pricing and with exporting becoming an influence, everything that goes on can still come down to good relationships."

Gorman says the goal of SP Newsprint is to "be a preferred supplier of newsprint to our customers." In a competitive industry where mill companies have merged and mill facilities have been shut down, SP is striving to maintain its quality levels and its profitability through turbulent times.

"In order for us to constantly be at the forefront of the newsprint and recovered paper industries, we maintain a strategic focus," says Gorman. "Instead of having one good year and then one bad year, we seek to continue to improve year after year."

The author is editor of Recycling Today and can be contacted via e-mail at btaylor@gie.net.