While per ton prices for scrap paper remained stable as 2018’s fourth quarter began, greater volatility was occurring in board rooms and banks around the world as paper mills continued to change ownership and configuration. Just a few months after acquiring two paper mills from Canada-based Catalyst Paper, Hong Kong-based Nine Dragons Paper Ltd. announced a $300 million investment program for the mills, which are in Rumford, Maine, and Biron, Wisconsin.
Nine Dragons' Illinois-based ND Paper subsidiary says its strategic review of the mills led it to an “investment strategy that diversifies the United States mills’ product mix, increases their overall production capacity and fundamentally improves their viability for generations to come.”
The Rumford location will see an anticipated $111 million invested to finance two projects, including the construction of a greenfield recycled-content-pulp facility. Also to be installed in Maine will be a shoe press on a paper machine there, designed to increase the machine’s production capacity by approximately 20 percent.
“[Our] investment strategy diversifies the United States mills’ product mix, increases their overall production capacity and fundamentally improves their viability for generations to come.” – ND Paper, Oakbrook, Illinois
In Wisconsin, the $189 million list of projects includes the conversion of a paper machine to containerboard products and the construction of a two-line greenfield recycled-content-pulp facility. The pulp lines will add approximately 1,900 air-dried metric tons of capacity to the site.
Another investment in an American mill by a non-U.S. company is about to be resuscitated by Mexico-based Bio Pappel. Regional media in the state of Washington began reporting in early October that the Mexican firm’s U.S. McKinley Paper Co. subsidiary plans to begin production at its mill in Port Angeles, Washington, by September 2019.
Bio Pappel and McKinley Paper originally purchased the mill from Japan-based Nippon Paper in March 2017. Earlier in 2018, the companies disclosed they had pushed back initial plans to reopen the paper mill quickly. According to an online report from the Peninsula Daily News, McKinley Paper has reinitiated its mill conversion effort and plans to produce 250,000 tons of containerboard annually at the mill, using recovered fiber as feedstock. The nearly 100-year-old mill historically has produced newsprint and telephone directory paper but is being converted to containerboard production.
A purely U.S.-based investment in the paper industry also was announced in October by California-based New-Indy Containerboard LLC. That firm, which is a joint venture of Massachusetts-based Kraft Group LLC and Indiana-based Schwarz Partners LP, has purchased a kraft pulp and paper mill in Catawba, South Carolina, from Resolute Forest Products. A statement issued by New-Indy in early October indicates it is likely to make “additional investment[s] in its infrastructure [to] establish one of the most diverse and efficient mill operations in the industry.”
Containerboard production is up 1.6 percent year to date, and the sector’s mill operating rate checked in at 97.2 percent in August 2018, according to the AF&PA.
The company adds, “Going forward, we are excited about the prospects for this mill to produce a diverse array of products from existing offerings like market pulp, lightweight coated papers and specialty grades to new offerings of high-quality virgin ultra-lightweight linerboard. The Catawba mill will position New-Indy to fill a significant void in the domestic and international markets for these products.”
New-Indy describes itself as having “owners and leadership with decades of experience,” which includes International Forest Products LLC Chair (and New England Patriots football team owner) Robert Kraft.
Figures gathered by the American Forest & Paper Association (AF&PA), Washington, continue to show a packaging grades sector operating at full speed in the U.S. Containerboard production in August 2018 was up 2.2 percent compared with one year earlier, and it is up 1.6 percent year to date. The sector’s mill operating rate checked in at 97.2 percent in August 2018. Although recovered paper prices are still slowly recovering from China’s curtailed demand, the investments in North American capacity can offer some longer term good news to paper recyclers in the U.S.