It is estimated that the gap between China's domestic wood supply and total demand will reach 150 million cubic meters (roundwood equivalent) by 2015. For perspective, that is more than the entire Canadian harvest. Where will the wood come from? They have greatly expanded their domestic paper mill production but where will the pulp come from? We ship them a lot of waste paper but that is not going to do the job.
So..., will they move production to the U.S. and vertically integrate their operations (paper mill to pulp mill to timberland)? If so, when does it start? Just in case you were not watching, it already has begun! Following are extracts from three news releases. --Brian
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From the Bangor Daily News, Dec. 21, 2010:
New Woodland mill owners investing in facility’s future
WOODLAND, Maine — The new owners of Woodland Pulp LLC, formerly Domtar, are investing in new energy efficiencies at their pulp mill using state and federal funds, Gov. John Baldacci said Tuesday.
Baldacci stopped in to visit the mill Tuesday morning, and offered whatever assistance the state could provide to assist the new owners, IGIC of China and Taiwan, to ensure the mill’s security and expand.
The facility’s director, Bert Martin, said the company’s future was finally secured with the change in ownership. “Christmas actually came here on October 1,” he said, referring to the date the mill was sold.
“We now have an owner that wants this mill,” he said. “This lets our people know they will have a job next week, next month and next year. I think the mill today is in a very good position.”
Martin said 300 people now work at the mill and that up to 10 more people will be hired at the start of the new year.
“This mill was in jeopardy of closing,” Baldacci said after a private meeting with company officials. “Domtar had made it very clear the mill was not part of their core mission and had been actively pursuing other investors and new owners.”
Baldacci called the mill “the lifeblood of Washington County” and said that each mill job represents another three or four jobs in the region, such as clerks, waiters and bank employees. “The ripple effect is huge,” he said, noting the mill has an annual payroll of $20 million to $25 million.
Martin said that the mill is using 1.5 million tons of fiber annually, pulled from every region of Maine and New Brunswick. “We generate jobs all over the state,” he said.
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From OregonLive.com, Feb 4, 2010
Hong Kong corporation buys Oregon pulp mill
A Chinese company hoping to expand into the North American forest products business has purchased Cascade Pacific Pulp, LLC, a pulp mill at Halsey in the lower Willamette Valley.
The sale to Hong Kong-based International Grand Investment Corporation could be a first in Oregon, which has not seen many foreign owners in the wood products industry.
The Halsey mill had been owned by one of Oregon's most storied forest products companies, Pope & Talbot, which went bankrupt in May 2008 after 160 years.
"I'm not aware of any other mill with owners in China," said Ray Wilkeson, president of the Oregon Forest Industries Council, an industry trade group. "It would not be surprising to see more of that in the future."
The purchase of the mill, for an undisclosed price, is also a first for the Hong Kong company. It mainly has acted as a trading company, buying pulp from all over the world to sell to customers in China, Wayne Henneck, president of Cascade Pacific Pulp, said Wednesday.
It could signal a new shift in the industry as China's growing demand for paper products fills a void left by a shrinking market in the United States. Sales to Asia now make up about one-half to two-thirds of the Halsey mill's business, Henneck said.
"The (Hong Kong) company is integrating vertically," said Henneck, who will remain president. "The Asian markets have been very hot. This is the first mill they'll own in North America. It may not be the last."
International Grand Investment Corporation was just incorporated in Delaware in December 2009.
In the past two years, the Halsey mill has gone through a roller coaster of ownership changes, creating uncertainty for its 170 workers in an area with some of the state's high unemployment. In Linn County, the jobless rate was 13.5 percent as of December 2009.
But Henneck says he sees the sale as providing some stability for the mill, which is seeing an uptick after spells of downtime during the recession. The mill produces over 180,000 tons of bleached and unbleached pulp per year for use in various paper products and building materials.
The mill's previous owners, a Minnesota private equity firm called Wayzata Investment Partners, won the mill for $31.2 million in an auction in June 2008. But it refused to recognize the union for months, creating workplace tensions.
"The private equity firm always intended to buy distressed companies, get them on their feet and sell them," Henneck said. "They were not interested in pulp and paper. These are strategic owners who are interested in what we do."
Union leaders said no workers will be affected by the ownership change because of a protective clause in their contract. Rumors had been flying for months that a new owner was on the way.
"Everyone's feeling good," said Ernie Lamoureux, a staff representative for the United Steelworkers. "The pulp market is still pretty good. They're selling a lot of it to China."
Wilkeson said that China's continuing growth will likely shape the forest products industry in Oregon and the United States for years to come.
"There's no question they're going to be a big dog," Wilkeson said. "It's a competitive world, but there's another side to the coin. There's also a lot of demand."
The sale to Hong Kong-based International Grand Investment Corporation could be a first in Oregon, which has not seen many foreign owners in the wood products industry.
The Halsey mill had been owned by one of Oregon's most storied forest products companies, Pope & Talbot, which went bankrupt in May 2008 after 160 years.
"I'm not aware of any other mill with owners in China," said Ray Wilkeson, president of the Oregon Forest Industries Council, an industry trade group. "It would not be surprising to see more of that in the future."
The purchase of the mill, for an undisclosed price, is also a first for the Hong Kong company. It mainly has acted as a trading company, buying pulp from all over the world to sell to customers in China, Wayne Henneck, president of Cascade Pacific Pulp, said Wednesday.
It could signal a new shift in the industry as China's growing demand for paper products fills a void left by a shrinking market in the United States. Sales to Asia now make up about one-half to two-thirds of the Halsey mill's business, Henneck said.
"The (Hong Kong) company is integrating vertically," said Henneck, who will remain president. "The Asian markets have been very hot. This is the first mill they'll own in North America. It may not be the last."
International Grand Investment Corporation was just incorporated in Delaware in December 2009.
In the past two years, the Halsey mill has gone through a roller coaster of ownership changes, creating uncertainty for its 170 workers in an area with some of the state's high unemployment. In Linn County, the jobless rate was 13.5 percent as of December 2009.
But Henneck says he sees the sale as providing some stability for the mill, which is seeing an uptick after spells of downtime during the recession. The mill produces over 180,000 tons of bleached and unbleached pulp per year for use in various paper products and building materials.
The mill's previous owners, a Minnesota private equity firm called Wayzata Investment Partners, won the mill for $31.2 million in an auction in June 2008. But it refused to recognize the union for months, creating workplace tensions.
"The private equity firm always intended to buy distressed companies, get them on their feet and sell them," Henneck said. "They were not interested in pulp and paper. These are strategic owners who are interested in what we do."
Union leaders said no workers will be affected by the ownership change because of a protective clause in their contract. Rumors had been flying for months that a new owner was on the way.
"Everyone's feeling good," said Ernie Lamoureux, a staff representative for the United Steelworkers. "The pulp market is still pretty good. They're selling a lot of it to China."
Wilkeson said that China's continuing growth will likely shape the forest products industry in Oregon and the United States for years to come.
"There's no question they're going to be a big dog," Wilkeson said. "It's a competitive world, but there's another side to the coin. There's also a lot of demand."
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From northcountrynow.com
Potsdam paper mill exporting products, technology
Tuesday, August 3, 2010 - 12:01 pm
By CRAIG FREILICH
UNIONVILLE – Potsdam’s century-old paper mill is working to develop new technology that its owner may use in paper plants in China.
Meanwhile, Potsdam Specialty Paper General Manager Ron Charette says the plant worked through a drop in sales that swept the whole industry, and is now back to pre-2008 production levels running three shifts with four crews.
Seafront Specialty Paper, which bought the mill from MeadWestvaco two years ago and dubbed it Potsdam Specialty Paper Inc., is a holding company based in the British Virgin Islands. Seafront has offices in Hong Kong, New York and Toronto, and is chaired by Kenny Chang, also a major stockholder. The Potsdam mill is on Sissonville Road along the Raquette River.
One of Seafront’s major aims is to develop products and procedures that would be put into use in paper mills it plans to acquire in China.
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