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Will Mies

OAKLAND, Oct. 18, 2013 (PPI Pulp & Paper Week) -US containerboard inventories dropped by 47,500 tons in September as mills downshifted on production and actual box shipments increased because of an extra shipping day, according to latest industry statistics released this week.

That reversed the three-month June-August 338,000-ton surge in inventories in which mills appeared to overshoot on production in an effort to rebuild inventories to more comfortable levels after tightness in supply last spring, according to contacts.

"Producers really took it right up to the edge of the cliff," one contact said. "We won't know until the end of the year whether prices weaken or not. Right now it's a jump ball."

Contacts this week said that price levels so far in the US East held firm through the seasonally strong fall period despite the inventory build and new startup tonnage reportedly at discounted prices from several new or converted containerboard machines. The one exception is on the West Coast, where the $30/ton premium on corrugating medium pushed through last spring is under pressure, contacts said.

The 47,500-ton drop in containerboard inventories compares to an average 2,000-ton increase for the month of September over the past decade. The decline put inventories at 2.43 million tons, equal to 4.2 weeks of supply, according to the Fibre Box Assn (FBA) and American Forest & Paper Association (AF&PA) statistics.

Inventories were still the "highest for September in five years (or since 2.446 million tons in September 2008)," according to Vertical Research Partners analyst Chip Dillon. "Weeks of supply were the highest since September 2004."

Box shipments sluggish.August box shipments totaled 29.005 billion ft2, up 2.5% from a year ago on an actual basis, but down 2.2% average-week adjusted for one more shipping day in the latest month.

Actual box shipments year-to-date were flat, but up 0.5% on an average-week basis when adjusted for one less shipping day this year.

Containerboard mills, particularly ones making kraft linerboard, downshifted production in September by 8.9% from the previous month although output of 2.83 million tons was only down 0.1% from a year ago, according to the AF&PA statistics.

Containerboard operating rates fell to 93.8% in September from 99.7% in August and below their year-to-date average of 96.6%. Operating rates for linerboard mills dropped to 92.5% from 98.4% in August.

"Independents are fully stocked after receiving a lot of shipments in late summer and early September after ordering more because of tightness in the market earlier this year," one contact said. "As a result, orders have slowed down (and) some mills are scratching for business."

"We have more people knocking on our door," one East Coast independent converter said.

"Everybody seems to be shipping everything on time," a trader said.

Stemming the tide?Nevertheless, producers are likely to continue to take market-related downtime during the fourth quarter to keep supply in balance with demand, according to most analysts.

International Paper (IP) has had both machines at its 2,540 tons/day Rome, GA, kraft linerboard mill down for 45 days for maintenance. One contact said the mill may come up this weekend, which would result in an estimated production loss of nearly 115,000 tons. Originally the mill was scheduled to have a 25-day shut.

RockTenn reportedly had its Seminole recycled containerboard mill in Jacksonville, FL, curtailed for two weeks for what the company reportedly described as "economic downtime." Estimated production loss would be about 23,000 tons from Seminole, which the company regards as a "swing" mill easy to take up and down.

"The June-to-August run-up in inventories and new capacity entering the market has created the perception in the mind of converters that prices may weaken later this year," one contact said. "Producers had to do something dramatic to stem the tide."

New startup capacity.About one million tons of new capacity is entering the market from the new Norampac partnership Greenpac machine in Niagara Falls, NY, and two newsprint conversions (by SP Fiber Technologies at Dublin GA, and Atlantic Packaging Products at Whitby, ON). All three machines started up from April to July and have been climbing up their production curves, according to contacts.

In addition, two new entries created by IP's spin-off of three board machines to complete its Temple-Inland acquisition last year are also in the market trying to line up customers, contacts said. The former IP mills are now run by Hood Container (in New Johnsonville, TN) and New- Indy (in Ontario and Oxnard, CA). New-Indy is a joint venture between the Schwartz and Kraft groups. IP spun off the mills with 970,000 tons/yr of combined capacity to comply with a US Dept. of Justice order to complete the acquisition. But one-third of IP's three-year off-take agreement to buy production from the mills expired in July, freeing some tonnage to be sold in the open market (though parties have reportedly been trying to smooth the transition), according to contacts.

The startup machines and new players are reportedly offering introductory prices to lock in new customers, according to several contacts. Most of the new tonnage is recycled containerboard.

But so far, there has been "no discounting by second tier recycled mills in the East," according to one trader.

"But customers are expecting it later this year on recycled grades," the contact said.

Pricing mostly stable in East.Unbleached kraft linerboard prices (42-lb) are still reportedly close to the $625-635/ton "open market" PPI Pulp & Paper Week Price Watch level. Recycled linerboard prices (23 lb) are reported to be in the $590-610/ton range, but lower in the Northeast because of the new startup tonnage, according to contacts.

Semichemical medium prices (26 lb) in the East are reported to be close to the Price Watch $575-585/ton price, but slightly lower on 23-lb recycled medium, particularly in the Northeast.

West Coast medium price under pressure.On the West Coast, the $630-640/ton premium price on 26-lb semichemical medium has been under pressure in the large competitive Los Angeles market, according to contacts. Producers in the late spring of 2012 were able to push through a $30/ton upward price adjustment on medium because of tightness in supply due to underlying lack of production capacity in the West. But converters were unhappy about it because of difficulty passing through the medium-only increase onto boxes.

"There's no question that medium supply in the region is not as tight as it used to be," one supplier said.

But the contact was "not seeing" any downward movement in prices in the Los Angeles market.

Another seller said that price levels in the Los Angeles market seem to be more at $600-610/ton.

And a larger converter in Southern California told of being able to buy tonnage at discounts from a new market entrant and offshore suppliers. Imports of medium have been coming into the Los Angeles market from Chinese, Australian, and European mills, contacts said. As a result, the converter was pressuring regular suppliers to lower prices.

And more medium supply will likely be coming westward from eastern US mills because of current high inventories and seasonal slowing in demand during winter months.

"Eastern mills can't export recycled medium but they can ship it to California," one contact noted.

Open market price levels in Northern California and the Pacific, Northwest, however, appear to be holding, but these markets have lower open market volume, according to several contacts.

As a result,PPI Pulp & Paper Weekis showing a $15/ton reduction in the 26-lb semichemical medium West price in the October Price Watch.

Higher exports ahead?US linerboard export shipments have been held back earlier this year by tight supply. Linerboard production for export in September totaled 319,000 tons, up from 311,000 tons in August, down 0.5% from a year ago, according to AF&PA statistics. Year-to-date US linerboard exports were down 1.6% from a year ago.

But with high inventories in the US and recent weakness of the dollar against the Euro, some contacts expect linerboard export shipments to pick up later this year and possibly pressure export prices. Prices on linerboard exports to southern Europe and South/Central America eroded about $20-25/ton in late summer from highs reached last spring, but may have stabilized somewhat because of seasonally strong fall demand, according to some contacts. One large company said that their overall global export prices even firmed slightly in September.

SKG hikes in Europe.Smurfit Kappa Group (SKG) and DS Smith this week announced Euro 30-40/tonne increases on recycled containerboard for continental Europe effective Nov. 1. Earlier, several smaller producers announced increases of Euro 30-40/tonne for Oct. 1. This would be the second price hike attempt after producers were able to push through Euro 35-40/tonne increases in August/September, according toPPI Europe.

SKG, the largest producer in Europe, said the latest announcement "takes place in a context of high production costs and strong demand."

But a US export trader is seeing "quite a bit" of supply offers in southern Europe for November. Converters in some cases are asking for another Euro 10/tonne price reduction following price reductions of about Euro 20 late this summer, the contact said. The impact of the price reductions has not been fully felt by US mills in dollar terms because of the strengthening Euro, the trader noted.

Packaging Corp. of America(PCA), the first company to report third quarter earnings, said that its box shipments for the period grew 7.8% both actual and per workday. Because of higher demand from its box plants, the company said it reduced outside domestic containerboard shipments by 12,000 tons and "lower priced" export shipments by 20,000 tons in the third quarter compared with a year ago. The company said its mills ran at 100% of capacity. The company is now taking a five-day maintenance outage at its Filer City, MI, medium mill, resulting in a 7,000 ton production loss. Excluding special charges, the company said it reported record earnings of $89 million compared with $53 million a year ago.

Atlantic Packaging Productssaid its startup of a converted newsprint machine in Whitby, ON, is "progressing well" and the machine is increasing daily output levels. The machine, which started up May 28, will be producing lighter and medium weight linerboard and medium grades, the company toldP&PW.Target capacity was originally set at 300,000 tons/yr making only linerboard. The paper is being sold "exclusively to partners and exclusive customers," the company said. A company official also said that the firm had "many interested existing and potential partners" for developing a US Midwest sheet feeder plant.Voith, which handled most of the conversion, toldCanadian Pulp & Paperthat the rebuild included modifying PM's the main dryer section, including steam and condensate systems, along with hood modifications. New tail threading equipment and UTM pulper were also included, along with relocating a calendar and reel. Rebuilding the mill's stock preparation line to take old corrugated containers rather than old newspapers also was completed.

US containerboard mills pull back from inventory brink; prices stable, but some pressure going into yearend

Posted in: Packaging Technology 10/18/2013 - 12:05

OAKLAND, Oct. 18, 2013 (PPI Pulp & Paper Week) -US containerboard inventories dropped by 47,500 tons in September as mills downshifted on production and actual box shipments increased because of an extra shipping day, according to latest industry statistics released this week.

That reversed the three-month June-August 338,000-ton surge in inventories in which mills appeared to overshoot on production in an effort to rebuild inventories to more comfortable levels after tightness in supply last spring, according to contacts.

"Producers really took it right up to the edge of the cliff," one contact said. "We won't know until the end of the year whether prices weaken or not. Right now it's a jump ball."

Contacts this week said that price levels so far in the US East held firm through the seasonally strong fall period despite the inventory build and new startup tonnage reportedly at discounted prices from several new or converted containerboard machines. The one exception is on the West Coast, where the $30/ton premium on corrugating medium pushed through last spring is under pressure, contacts said.

The 47,500-ton drop in containerboard inventories compares to an average 2,000-ton increase for the month of September over the past decade. The decline put inventories at 2.43 million tons, equal to 4.2 weeks of supply, according to the Fibre Box Assn (FBA) and American Forest & Paper Association (AF&PA) statistics.

Inventories were still the "highest for September in five years (or since 2.446 million tons in September 2008)," according to Vertical Research Partners analyst Chip Dillon. "Weeks of supply were the highest since September 2004."

Box shipments sluggish.August box shipments totaled 29.005 billion ft2, up 2.5% from a year ago on an actual basis, but down 2.2% average-week adjusted for one more shipping day in the latest month.

Actual box shipments year-to-date were flat, but up 0.5% on an average-week basis when adjusted for one less shipping day this year.

Containerboard mills, particularly ones making kraft linerboard, downshifted production in September by 8.9% from the previous month although output of 2.83 million tons was only down 0.1% from a year ago, according to the AF&PA statistics.

Containerboard operating rates fell to 93.8% in September from 99.7% in August and below their year-to-date average of 96.6%. Operating rates for linerboard mills dropped to 92.5% from 98.4% in August.

"Independents are fully stocked after receiving a lot of shipments in late summer and early September after ordering more because of tightness in the market earlier this year," one contact said. "As a result, orders have slowed down (and) some mills are scratching for business."

"We have more people knocking on our door," one East Coast independent converter said.

"Everybody seems to be shipping everything on time," a trader said.

Stemming the tide?Nevertheless, producers are likely to continue to take market-related downtime during the fourth quarter to keep supply in balance with demand, according to most analysts.

International Paper (IP) has had both machines at its 2,540 tons/day Rome, GA, kraft linerboard mill down for 45 days for maintenance. One contact said the mill may come up this weekend, which would result in an estimated production loss of nearly 115,000 tons. Originally the mill was scheduled to have a 25-day shut.

RockTenn reportedly had its Seminole recycled containerboard mill in Jacksonville, FL, curtailed for two weeks for what the company reportedly described as "economic downtime." Estimated production loss would be about 23,000 tons from Seminole, which the company regards as a "swing" mill easy to take up and down.

"The June-to-August run-up in inventories and new capacity entering the market has created the perception in the mind of converters that prices may weaken later this year," one contact said. "Producers had to do something dramatic to stem the tide."

New startup capacity.About one million tons of new capacity is entering the market from the new Norampac partnership Greenpac machine in Niagara Falls, NY, and two newsprint conversions (by SP Fiber Technologies at Dublin GA, and Atlantic Packaging Products at Whitby, ON). All three machines started up from April to July and have been climbing up their production curves, according to contacts.

In addition, two new entries created by IP's spin-off of three board machines to complete its Temple-Inland acquisition last year are also in the market trying to line up customers, contacts said. The former IP mills are now run by Hood Container (in New Johnsonville, TN) and New- Indy (in Ontario and Oxnard, CA). New-Indy is a joint venture between the Schwartz and Kraft groups. IP spun off the mills with 970,000 tons/yr of combined capacity to comply with a US Dept. of Justice order to complete the acquisition. But one-third of IP's three-year off-take agreement to buy production from the mills expired in July, freeing some tonnage to be sold in the open market (though parties have reportedly been trying to smooth the transition), according to contacts.

The startup machines and new players are reportedly offering introductory prices to lock in new customers, according to several contacts. Most of the new tonnage is recycled containerboard.

But so far, there has been "no discounting by second tier recycled mills in the East," according to one trader.

"But customers are expecting it later this year on recycled grades," the contact said.

Pricing mostly stable in East.Unbleached kraft linerboard prices (42-lb) are still reportedly close to the $625-635/ton "open market" PPI Pulp & Paper Week Price Watch level. Recycled linerboard prices (23 lb) are reported to be in the $590-610/ton range, but lower in the Northeast because of the new startup tonnage, according to contacts.

Semichemical medium prices (26 lb) in the East are reported to be close to the Price Watch $575-585/ton price, but slightly lower on 23-lb recycled medium, particularly in the Northeast.

West Coast medium price under pressure.On the West Coast, the $630-640/ton premium price on 26-lb semichemical medium has been under pressure in the large competitive Los Angeles market, according to contacts. Producers in the late spring of 2012 were able to push through a $30/ton upward price adjustment on medium because of tightness in supply due to underlying lack of production capacity in the West. But converters were unhappy about it because of difficulty passing through the medium-only increase onto boxes.

"There's no question that medium supply in the region is not as tight as it used to be," one supplier said.

But the contact was "not seeing" any downward movement in prices in the Los Angeles market.

Another seller said that price levels in the Los Angeles market seem to be more at $600-610/ton.

And a larger converter in Southern California told of being able to buy tonnage at discounts from a new market entrant and offshore suppliers. Imports of medium have been coming into the Los Angeles market from Chinese, Australian, and European mills, contacts said. As a result, the converter was pressuring regular suppliers to lower prices.

And more medium supply will likely be coming westward from eastern US mills because of current high inventories and seasonal slowing in demand during winter months.

"Eastern mills can't export recycled medium but they can ship it to California," one contact noted.

Open market price levels in Northern California and the Pacific, Northwest, however, appear to be holding, but these markets have lower open market volume, according to several contacts.

As a result,PPI Pulp & Paper Weekis showing a $15/ton reduction in the 26-lb semichemical medium West price in the October Price Watch.

Higher exports ahead?US linerboard export shipments have been held back earlier this year by tight supply. Linerboard production for export in September totaled 319,000 tons, up from 311,000 tons in August, down 0.5% from a year ago, according to AF&PA statistics. Year-to-date US linerboard exports were down 1.6% from a year ago.

But with high inventories in the US and recent weakness of the dollar against the Euro, some contacts expect linerboard export shipments to pick up later this year and possibly pressure export prices. Prices on linerboard exports to southern Europe and South/Central America eroded about $20-25/ton in late summer from highs reached last spring, but may have stabilized somewhat because of seasonally strong fall demand, according to some contacts. One large company said that their overall global export prices even firmed slightly in September.

SKG hikes in Europe.Smurfit Kappa Group (SKG) and DS Smith this week announced Euro 30-40/tonne increases on recycled containerboard for continental Europe effective Nov. 1. Earlier, several smaller producers announced increases of Euro 30-40/tonne for Oct. 1. This would be the second price hike attempt after producers were able to push through Euro 35-40/tonne increases in August/September, according toPPI Europe.

SKG, the largest producer in Europe, said the latest announcement "takes place in a context of high production costs and strong demand."

But a US export trader is seeing "quite a bit" of supply offers in southern Europe for November. Converters in some cases are asking for another Euro 10/tonne price reduction following price reductions of about Euro 20 late this summer, the contact said. The impact of the price reductions has not been fully felt by US mills in dollar terms because of the strengthening Euro, the trader noted.

Packaging Corp. of America(PCA), the first company to report third quarter earnings, said that its box shipments for the period grew 7.8% both actual and per workday. Because of higher demand from its box plants, the company said it reduced outside domestic containerboard shipments by 12,000 tons and "lower priced" export shipments by 20,000 tons in the third quarter compared with a year ago. The company said its mills ran at 100% of capacity. The company is now taking a five-day maintenance outage at its Filer City, MI, medium mill, resulting in a 7,000 ton production loss. Excluding special charges, the company said it reported record earnings of $89 million compared with $53 million a year ago.

Atlantic Packaging Productssaid its startup of a converted newsprint machine in Whitby, ON, is "progressing well" and the machine is increasing daily output levels. The machine, which started up May 28, will be producing lighter and medium weight linerboard and medium grades, the company toldP&PW.Target capacity was originally set at 300,000 tons/yr making only linerboard. The paper is being sold "exclusively to partners and exclusive customers," the company said. A company official also said that the firm had "many interested existing and potential partners" for developing a US Midwest sheet feeder plant.Voith, which handled most of the conversion, toldCanadian Pulp & Paperthat the rebuild included modifying PM's the main dryer section, including steam and condensate systems, along with hood modifications. New tail threading equipment and UTM pulper were also included, along with relocating a calendar and reel. Rebuilding the mill's stock preparation line to take old corrugated containers rather than old newspapers also was completed.

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SAN FRANCISCO, Oct. 15, 2013 (RISI) -US containerboard inventories dropped by 47,500 tons in September as mills down shifted on production and box shipments remained relatively flat, according to latest industry statistics released today.

The 47,500-ton drop in containerboard inventories at box plants and mills compares to an average 2,000-ton increase for the month of September over the past decade. The drop brought inventories to 2.43 million tons, equal to 4.2 weeks of supply, according to the Fibre Box Assn (FBA) and American Forest & Paper Assn (AF&PA) statistics.

But inventories were still the "highest for September in five years (or since 2.446 million tons in September 2008)," noted Chip Dillon of Vertical Research Partners. "Weeks of supply were the highest since September 2004."

Box shipments in August totaled 29.005 billion ft2, up 2.5% from a year ago on an actual basis, but down 2.2% average-week (adjusted for one more shipping day in the latest month).

Actual box shipments year-to-date were completely flat, but up 0.5% when adjusted for one less shipping day this year.

Containerboard mills, particularly ones making kraft linerboard, down shifted production in September by 8.9% from the previous month although output was only down 0.1% from a year ago, according to the AF&PA statistics.

Containerboard operating rates fell to 93.8% in September from 99.7% in August and below their year-to-date average of 96.6%

US containerboard inventories drop 47,500 tons in September as mills throttle back production

Posted in: Packaging Technology 10/15/2013 - 03:36

SAN FRANCISCO, Oct. 15, 2013 (RISI) -US containerboard inventories dropped by 47,500 tons in September as mills down shifted on production and box shipments remained relatively flat, according to latest industry statistics released today.

The 47,500-ton drop in containerboard inventories at box plants and mills compares to an average 2,000-ton increase for the month of September over the past decade. The drop brought inventories to 2.43 million tons, equal to 4.2 weeks of supply, according to the Fibre Box Assn (FBA) and American Forest & Paper Assn (AF&PA) statistics.

But inventories were still the "highest for September in five years (or since 2.446 million tons in September 2008)," noted Chip Dillon of Vertical Research Partners. "Weeks of supply were the highest since September 2004."

Box shipments in August totaled 29.005 billion ft2, up 2.5% from a year ago on an actual basis, but down 2.2% average-week (adjusted for one more shipping day in the latest month).

Actual box shipments year-to-date were completely flat, but up 0.5% when adjusted for one less shipping day this year.

Containerboard mills, particularly ones making kraft linerboard, down shifted production in September by 8.9% from the previous month although output was only down 0.1% from a year ago, according to the AF&PA statistics.

Containerboard operating rates fell to 93.8% in September from 99.7% in August and below their year-to-date average of 96.6%

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OAKLAND, Oct. 11, 2013 (PPI Pulp & Paper Week) -KapStone celebrated its new Aurora, IL, box plant on Oct. 8, which is the eight-year-old company's first new greenfield box making facility.

"We couldn't be in the box business without having a plant in Chicago," chmn and CEO Roger Stone toldPPI Pulp & Paper Week.

The new 192,000 ft2sheet plant has two flexo-folder-gluers, a "high tech" rotary die cutter, and a design and technical center. The plant began production last March, completing the first $8-10 million phase of the project.

New corrugator planned.Plans are to install a new 98-in. corrugator in the "near future" in the next phase of the project, Stone said. Some components of the corrugator are already at the plant.

"Chicago has always been our home town and we have customers in this area," Stone said.

The nearest KapStone plant is in Cedar Rapids, IA, about 250 miles west of Chicago.

KapStone's headquarters, however, has been in the Chicago suburb of Northbrook since formation of the company in 2005.

The Aurora plant general mgr is Katie Wilhelm, who began her career working during college for Stone Container, when it was headed by Roger Stone. The original family company grew from its Chicago roots to become the world's largest containerboard/box producer before its acquisition by Jefferson Smurfit in 1998.

Competitive market.After the merger to create Smurfit-Stone, Roger Stone and his son-in-law Matthew Kaplan (now pres of KapStone) formed Box USA, the largest independent converter, and later sold the firm to International Paper (IP) in 2004.

The two then formed KapStone a year later, which they built through a series of acquisitions into a company with four containerboard/kraft paper mills (including the recent acquisition of Longview) and 22 corrugated converting plants. It is now the fifth largest North American containerboard producer in capacity with operations from the East to the West Coast.

Chicago has long been a competitive box market with many players and the new KapStone plant is near a large new "super plant" Temple-Inland built in Aurora in 2011 before its acquisition by IP.

Georgia-Pacificplans to shut its Color-Box plant in Harrington, DE, by the end of the year, resulting in the loss of 95 jobs, a company official told the localNews Journalin Delaware. The plant makes litho-laminated and other improved graphic quality corrugated boxes. Production from Harrington will shift to more modern Color-Box plants in Richmond, IN (two plants), and Pelahatchie, MS, the official said. The division also operates a plant in Madera, CA, in the Central Valley. The Harrington plant was built in 1969 and acquired by G-P about 15 years ago. The Color-Box division's capabilities include litho-lamination, direct print (up to 6 color), preprint and UV, and aqueous coatings.

 

Corrugated: KapStone opens Chicago plant, its first operation in Stone family's home base

Posted in: Packaging Technology 10/11/2013 - 11:07

OAKLAND, Oct. 11, 2013 (PPI Pulp & Paper Week) -KapStone celebrated its new Aurora, IL, box plant on Oct. 8, which is the eight-year-old company's first new greenfield box making facility.

"We couldn't be in the box business without having a plant in Chicago," chmn and CEO Roger Stone toldPPI Pulp & Paper Week.

The new 192,000 ft2sheet plant has two flexo-folder-gluers, a "high tech" rotary die cutter, and a design and technical center. The plant began production last March, completing the first $8-10 million phase of the project.

New corrugator planned.Plans are to install a new 98-in. corrugator in the "near future" in the next phase of the project, Stone said. Some components of the corrugator are already at the plant.

"Chicago has always been our home town and we have customers in this area," Stone said.

The nearest KapStone plant is in Cedar Rapids, IA, about 250 miles west of Chicago.

KapStone's headquarters, however, has been in the Chicago suburb of Northbrook since formation of the company in 2005.

The Aurora plant general mgr is Katie Wilhelm, who began her career working during college for Stone Container, when it was headed by Roger Stone. The original family company grew from its Chicago roots to become the world's largest containerboard/box producer before its acquisition by Jefferson Smurfit in 1998.

Competitive market.After the merger to create Smurfit-Stone, Roger Stone and his son-in-law Matthew Kaplan (now pres of KapStone) formed Box USA, the largest independent converter, and later sold the firm to International Paper (IP) in 2004.

The two then formed KapStone a year later, which they built through a series of acquisitions into a company with four containerboard/kraft paper mills (including the recent acquisition of Longview) and 22 corrugated converting plants. It is now the fifth largest North American containerboard producer in capacity with operations from the East to the West Coast.

Chicago has long been a competitive box market with many players and the new KapStone plant is near a large new "super plant" Temple-Inland built in Aurora in 2011 before its acquisition by IP.

Georgia-Pacificplans to shut its Color-Box plant in Harrington, DE, by the end of the year, resulting in the loss of 95 jobs, a company official told the localNews Journalin Delaware. The plant makes litho-laminated and other improved graphic quality corrugated boxes. Production from Harrington will shift to more modern Color-Box plants in Richmond, IN (two plants), and Pelahatchie, MS, the official said. The division also operates a plant in Madera, CA, in the Central Valley. The Harrington plant was built in 1969 and acquired by G-P about 15 years ago. The Color-Box division's capabilities include litho-lamination, direct print (up to 6 color), preprint and UV, and aqueous coatings.

 

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SAN FRANCISCO, Oct. 7, 2013 (RISI) -International packaging and paper company Mondi Group has organized its North American operations supplying consumer packaging products, industrial bags and release liners under the name Mondi Americas, the company announced recently.

"Mondi Americas brings deep technical knowledge as well as global supply chain efficiencies to Mondi's North American customer base," said Kevin Young, recently named pres of Mondi Americas. "Our North American customers that source and market globally now have a regional avenue to Mondi's full range of global resources."

Kevin Young, pres of Mondi Americas

Local headquarters for the new organization is Pleasant Prairie, WI. Mondi entered the North American market in 2003 with the acquisition of its first industrial bag plant.

The company's North American multiwall sack converting operations include its plant in Romeoville, Ill, and three Mexican plants in Monterrey, Chihuahua and Tehuacan. In North America, the company mainly sources kraft paper locally to produce its high-strength shipping sacks. The plants in Mexico supply the local market and also export to the US.

Consumer packaging products include stand-up pouches, re-closable bags, microwaveable packaging and other products with optimal barrier properties, along with extruded films for labels. The company has two plants in Jackson, MO, which became part of Mondi in October 2012, when it acquired Nordenia International, a German flexible film and packaging manufacturer.

Release liners include silicone-coated and specialty paper and film release liners for pressure-sensitive adhesive applications. The company's manufacturing plants are in Pleasant Prairie, WI, Ridgefield and Leonia, NJ, and Lancaster, OH (the latter acquired as part of Akrosil in 2006).

"The goal of the new organization is to provide customers with a range of solutions from our combined North American operations backed by our global organization," Young said.

As an example of the new products planned for North America, Mondi recently introduced a new valve bag at the recent Pack Expo show that allows for quick de-aeration of the bag without perforation of its PE-barrier foil. The bag is targeted to meet the needs of fine powder filling and high-end filling lines.

Mondi Americas also introduced film-based differential release liners. The liners, which have a different release coating on each side of the substrate, are used in pressure-sensitive tape applications in automotive, graphic arts, medical and other markets. The new product complements the company's existing line of paper-based differential release liners.

 

Mondi Group unites US, Mexican packaging units in Mondi Americas

Posted in: Packaging Technology 10/07/2013 - 05:53

SAN FRANCISCO, Oct. 7, 2013 (RISI) -International packaging and paper company Mondi Group has organized its North American operations supplying consumer packaging products, industrial bags and release liners under the name Mondi Americas, the company announced recently.

"Mondi Americas brings deep technical knowledge as well as global supply chain efficiencies to Mondi's North American customer base," said Kevin Young, recently named pres of Mondi Americas. "Our North American customers that source and market globally now have a regional avenue to Mondi's full range of global resources."

Kevin Young, pres of Mondi Americas

Local headquarters for the new organization is Pleasant Prairie, WI. Mondi entered the North American market in 2003 with the acquisition of its first industrial bag plant.

The company's North American multiwall sack converting operations include its plant in Romeoville, Ill, and three Mexican plants in Monterrey, Chihuahua and Tehuacan. In North America, the company mainly sources kraft paper locally to produce its high-strength shipping sacks. The plants in Mexico supply the local market and also export to the US.

Consumer packaging products include stand-up pouches, re-closable bags, microwaveable packaging and other products with optimal barrier properties, along with extruded films for labels. The company has two plants in Jackson, MO, which became part of Mondi in October 2012, when it acquired Nordenia International, a German flexible film and packaging manufacturer.

Release liners include silicone-coated and specialty paper and film release liners for pressure-sensitive adhesive applications. The company's manufacturing plants are in Pleasant Prairie, WI, Ridgefield and Leonia, NJ, and Lancaster, OH (the latter acquired as part of Akrosil in 2006).

"The goal of the new organization is to provide customers with a range of solutions from our combined North American operations backed by our global organization," Young said.

As an example of the new products planned for North America, Mondi recently introduced a new valve bag at the recent Pack Expo show that allows for quick de-aeration of the bag without perforation of its PE-barrier foil. The bag is targeted to meet the needs of fine powder filling and high-end filling lines.

Mondi Americas also introduced film-based differential release liners. The liners, which have a different release coating on each side of the substrate, are used in pressure-sensitive tape applications in automotive, graphic arts, medical and other markets. The new product complements the company's existing line of paper-based differential release liners.

 

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OAKLAND, Sept. 20, 2013 (PPI Pulp & Paper Week) -US containerboard inventories jumped by nearly 147,000 tons in August as mills ran at close to 100% of capacity despite sluggish box shipments, according to the latest Fibre Box Assn (FBA) and American Forest & Paper Association (AF&PA) statistics earlier this week.

That brought inventories at mills and box plants to 2.48 million tons -- their highest level for August in eight years and the highest level for any month since February 2009 during the Great Recession. Weeks of supply at 4.3 also soared to their highest level for August since 2005.

The jump in inventories compares to an average decline of 21,000 tons for August during the past decade, representing a nearly 170,000 "swing" from the historical seasonal pattern, said Vertical Research Partners analyst Chip Dillon in a report.

Since last June, total containerboard inventories surged by 338,000 tons or 16% --"nearly nine times the average 39,000-ton increase seen for these three months over the previous 10 years," Dillon noted. This followed a 243,000-ton drop in inventories from February to May during the period when a $50/ton April price increase was implemented in the USA on linerboard and corrugating medium.

Containerboard inventories at box plants rose by 88,000 tons (4.2%) to 2.14 million tons during August, while mill inventories increased by 59,000 (21%) to 339,000 tons.

"Independents ordered more heavily in the spring when there seemed to be tightness in the market and all of the shipments arrived during the summer," one contact noted.

Changing market perceptions?The jump in inventory, high production levels, soft box demand, and new startup tonnage entering the market from three new or converted machines increased the feeling among buyers and sellers that there could be some sloppiness in prices later this year as the market moves into the seasonally slow period.

"The latest statistics are changing perceptions and my fear is perceptions could become reality," one seller said.

Statistics shipments slow. US shipments in August totaled 31.74 billion ft2, down 3.4% from a year ago on an actual basis, but up 1.0% average-week (adjusted for one less shipping day in the latest month), FBA reported.

Year-to-date box shipments were down 0.4% actual and up 0.8% average-week from the first eight months of 2012 (adjusted for two less work days this year).

US containerboard mill operating rates of 99.6% in August, "a rate not matched in seven years since September 2006," notedScoring Boxesanalyst Richard Storat.

Linerboard mills ran at 99.6% in August, while medium mills hummed at 102.9% of capacity.

Record production.Containerboard production of 3.11 million tons hit a record high for the month of August and was up 4.4% from a year ago.

Linerboard production was up 4.6%, with kraft linerboard output up 3.5% and recycled liner up 8.8%. Medium production increased 3.7% in August, with semichemical output up 0.8% but recycled medium 7.1% higher than a year ago.

The jump in recycled containerboard production reflects start up of one new and one converted machine in the US, but does not include another conversion in eastern Canada.

Startup tonnage ramping up.SP Fibre Technologies' 390,000 tons/yr PM 2 at Dublin, GA, reportedly now moved up most of its startup curve since beginning production in April. The tonnage gain is offset by the shift of the mill's PM 1 back to newsprint for a 140,000 tons/yr net lightweight packaging capacity increase -- of which some output is reportedly bag paper.

Since starting up in mid-July, the new 540,000 tons/yr Norampac partnership Greenpac machine in Niagara Falls, has been gradually moving up its startup curve and the company begsn selling to outside converters, according to contacts.

Atlantic Packaging Products is also reportedly making progress ramping up its 300,000 tons/yr converted Whitby, ON, former newsprint PM and finding customer partners to take the tonnage. The company is rumored to still be studying a new sheet feeder in the Midwest to take tonnage from the PM.

Impact of introductory tons?The three machines together have total eventual capacity of nearly one million tons/yr and will continue to ramp up production through early next year, contacts said. Some recycled containerboard startup tonnage is reportedly being sold at anywhere from $30-50/ton or more below market levels, depending on the customer, according to some contacts.

With containerboard inventories now relatively high, some contacts wonder if the new startup tonnage will begin to result in pricing erosion.

"You can feel it and are starting to see it," one independent converter said.

The converter said the impact would be felt in the market over the next couple months.

But most contacts said they have not seen much evidence of any price discounting outside the startup tonnage, with the market still in supply and demand "balance" during the seasonally strong period for box demand.

"We haven't seen much evidence of second- or third-tier recycled mills feeling like they have to match (the introductory tonnage) prices," one trader said.

But one contact said there is some "pressure" on recycled linerboard prices in the Northeast, although corrugating medium is still in surprisingly tight supply. Even with medium mills running at 103% of capacity, some converters find it hard to buy 23-lb high performance medium and sometimes have to substitute heavier weight grades or in one case use recycled linerboard.

Sheet prices holding up?Sheet prices throughout most of the country seemed to be holding up in the third quarter, with one major exception, according toPulp & Paper Week's quarterly survey.

Using 32 ECT sheets as the barometer, prices increased 4.3% in the Northeast, 9.2% East Central, 1% in the North Central, and 5.4% in the West, when compared to prices reported in the last survey in the June 14 issue of PPI Pulp & Paper Week.The takeaway from the survey is that sheet plants aren't being offered any sheet price discounts in the mist of their traditional busy season.

The one exception is the Southeast/South Central where sheet prices fell 5%, most likely because there is new capacity and suppliers in the region, contacts said. One converter told of recently seeing signs of more competitive pricing in sheets in the upper Midwest.

Comparing prices from the most recent survey to sheet prices from a year ago (again using 32 ECT as the barometer), they are up 22% in the Northeast, 23% in the East Central, 10.6% in the Southeast/South Central, 15.% in the North Central, and 38.1% in the West, according to the survey.

Some contacts expect mills to throttle back a bit on production in September. International Paper will reportedly have its 2,435 tons/day Rome, GA, mill down for about 3.5 weeks in July for boiler maintenance. RockTenn also reportedly took 10 days of downtime at its 1,630 tons/day Seminole mill in Jacksonville, FL.

Competitive export pricing.High US containerboard inventories may keep pressure on prices in export markets, according to traders.

In southern Europe, US kraft linerboard export prices have dropped another Euro 10/tonne in September, following a Euro 10-15/tonne decline in July/August, according to contacts. The main reason has been sluggish European box demand, more kraftliner imports into the European market, and a large gap between European kraft liner and recycled containerboard prices, according to contacts.

European recycled containerboard producers, however, has been able to raise prices by Euro 40/tonne in Germany and France, and Euro 15-20 in Italy, according toPPI Europe.

Producers announced a Euro 50/tonne increase effective with Aug. 1 shipments. A couple of European producers announced Euro 30-40/tonne price increases for Oct. 1.

In South/Central America, prices are reported as being fairly stable at $520-530/ton FAS but have eased somewhat from peak price levels last spring.

"Who knows how long it will stay at this level, given the slowing economy developing in the region, devalued exchange rates in relation to the US dollar, and growing inventories and new capacity coming on line?" one trader asked.

The trader said the market may be at a "dangerous crossroads."

In Mexico, many US linerboard exporters said they've implemented all of the announced $50/tonne spring price increase. Mexican converters, however, in some cases claim they are not paying all of the increase. The current Pulp & Paper Week Price Watch reflects another $10/tonne of the increase being implemented in addition to the $25/tonne already reflected to bring the level to $645-665 FOB Laredo border. Some exporters, though, wonder about the sustainability of the price increase.

 

Containerboard: US stocks hit eight-year high for August as mills run at almost 100% rate

Posted in: Packaging Technology 09/20/2013 - 11:37

OAKLAND, Sept. 20, 2013 (PPI Pulp & Paper Week) -US containerboard inventories jumped by nearly 147,000 tons in August as mills ran at close to 100% of capacity despite sluggish box shipments, according to the latest Fibre Box Assn (FBA) and American Forest & Paper Association (AF&PA) statistics earlier this week.

That brought inventories at mills and box plants to 2.48 million tons -- their highest level for August in eight years and the highest level for any month since February 2009 during the Great Recession. Weeks of supply at 4.3 also soared to their highest level for August since 2005.

The jump in inventories compares to an average decline of 21,000 tons for August during the past decade, representing a nearly 170,000 "swing" from the historical seasonal pattern, said Vertical Research Partners analyst Chip Dillon in a report.

Since last June, total containerboard inventories surged by 338,000 tons or 16% --"nearly nine times the average 39,000-ton increase seen for these three months over the previous 10 years," Dillon noted. This followed a 243,000-ton drop in inventories from February to May during the period when a $50/ton April price increase was implemented in the USA on linerboard and corrugating medium.

Containerboard inventories at box plants rose by 88,000 tons (4.2%) to 2.14 million tons during August, while mill inventories increased by 59,000 (21%) to 339,000 tons.

"Independents ordered more heavily in the spring when there seemed to be tightness in the market and all of the shipments arrived during the summer," one contact noted.

Changing market perceptions?The jump in inventory, high production levels, soft box demand, and new startup tonnage entering the market from three new or converted machines increased the feeling among buyers and sellers that there could be some sloppiness in prices later this year as the market moves into the seasonally slow period.

"The latest statistics are changing perceptions and my fear is perceptions could become reality," one seller said.

Statistics shipments slow. US shipments in August totaled 31.74 billion ft2, down 3.4% from a year ago on an actual basis, but up 1.0% average-week (adjusted for one less shipping day in the latest month), FBA reported.

Year-to-date box shipments were down 0.4% actual and up 0.8% average-week from the first eight months of 2012 (adjusted for two less work days this year).

US containerboard mill operating rates of 99.6% in August, "a rate not matched in seven years since September 2006," notedScoring Boxesanalyst Richard Storat.

Linerboard mills ran at 99.6% in August, while medium mills hummed at 102.9% of capacity.

Record production.Containerboard production of 3.11 million tons hit a record high for the month of August and was up 4.4% from a year ago.

Linerboard production was up 4.6%, with kraft linerboard output up 3.5% and recycled liner up 8.8%. Medium production increased 3.7% in August, with semichemical output up 0.8% but recycled medium 7.1% higher than a year ago.

The jump in recycled containerboard production reflects start up of one new and one converted machine in the US, but does not include another conversion in eastern Canada.

Startup tonnage ramping up.SP Fibre Technologies' 390,000 tons/yr PM 2 at Dublin, GA, reportedly now moved up most of its startup curve since beginning production in April. The tonnage gain is offset by the shift of the mill's PM 1 back to newsprint for a 140,000 tons/yr net lightweight packaging capacity increase -- of which some output is reportedly bag paper.

Since starting up in mid-July, the new 540,000 tons/yr Norampac partnership Greenpac machine in Niagara Falls, has been gradually moving up its startup curve and the company begsn selling to outside converters, according to contacts.

Atlantic Packaging Products is also reportedly making progress ramping up its 300,000 tons/yr converted Whitby, ON, former newsprint PM and finding customer partners to take the tonnage. The company is rumored to still be studying a new sheet feeder in the Midwest to take tonnage from the PM.

Impact of introductory tons?The three machines together have total eventual capacity of nearly one million tons/yr and will continue to ramp up production through early next year, contacts said. Some recycled containerboard startup tonnage is reportedly being sold at anywhere from $30-50/ton or more below market levels, depending on the customer, according to some contacts.

With containerboard inventories now relatively high, some contacts wonder if the new startup tonnage will begin to result in pricing erosion.

"You can feel it and are starting to see it," one independent converter said.

The converter said the impact would be felt in the market over the next couple months.

But most contacts said they have not seen much evidence of any price discounting outside the startup tonnage, with the market still in supply and demand "balance" during the seasonally strong period for box demand.

"We haven't seen much evidence of second- or third-tier recycled mills feeling like they have to match (the introductory tonnage) prices," one trader said.

But one contact said there is some "pressure" on recycled linerboard prices in the Northeast, although corrugating medium is still in surprisingly tight supply. Even with medium mills running at 103% of capacity, some converters find it hard to buy 23-lb high performance medium and sometimes have to substitute heavier weight grades or in one case use recycled linerboard.

Sheet prices holding up?Sheet prices throughout most of the country seemed to be holding up in the third quarter, with one major exception, according toPulp & Paper Week's quarterly survey.

Using 32 ECT sheets as the barometer, prices increased 4.3% in the Northeast, 9.2% East Central, 1% in the North Central, and 5.4% in the West, when compared to prices reported in the last survey in the June 14 issue of PPI Pulp & Paper Week.The takeaway from the survey is that sheet plants aren't being offered any sheet price discounts in the mist of their traditional busy season.

The one exception is the Southeast/South Central where sheet prices fell 5%, most likely because there is new capacity and suppliers in the region, contacts said. One converter told of recently seeing signs of more competitive pricing in sheets in the upper Midwest.

Comparing prices from the most recent survey to sheet prices from a year ago (again using 32 ECT as the barometer), they are up 22% in the Northeast, 23% in the East Central, 10.6% in the Southeast/South Central, 15.% in the North Central, and 38.1% in the West, according to the survey.

Some contacts expect mills to throttle back a bit on production in September. International Paper will reportedly have its 2,435 tons/day Rome, GA, mill down for about 3.5 weeks in July for boiler maintenance. RockTenn also reportedly took 10 days of downtime at its 1,630 tons/day Seminole mill in Jacksonville, FL.

Competitive export pricing.High US containerboard inventories may keep pressure on prices in export markets, according to traders.

In southern Europe, US kraft linerboard export prices have dropped another Euro 10/tonne in September, following a Euro 10-15/tonne decline in July/August, according to contacts. The main reason has been sluggish European box demand, more kraftliner imports into the European market, and a large gap between European kraft liner and recycled containerboard prices, according to contacts.

European recycled containerboard producers, however, has been able to raise prices by Euro 40/tonne in Germany and France, and Euro 15-20 in Italy, according toPPI Europe.

Producers announced a Euro 50/tonne increase effective with Aug. 1 shipments. A couple of European producers announced Euro 30-40/tonne price increases for Oct. 1.

In South/Central America, prices are reported as being fairly stable at $520-530/ton FAS but have eased somewhat from peak price levels last spring.

"Who knows how long it will stay at this level, given the slowing economy developing in the region, devalued exchange rates in relation to the US dollar, and growing inventories and new capacity coming on line?" one trader asked.

The trader said the market may be at a "dangerous crossroads."

In Mexico, many US linerboard exporters said they've implemented all of the announced $50/tonne spring price increase. Mexican converters, however, in some cases claim they are not paying all of the increase. The current Pulp & Paper Week Price Watch reflects another $10/tonne of the increase being implemented in addition to the $25/tonne already reflected to bring the level to $645-665 FOB Laredo border. Some exporters, though, wonder about the sustainability of the price increase.

 

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OAKLAND, Sept. 20, 2013 (PPI Pulp & Paper Week) -International Paper (IP) plans on spending $100-150 million to upgrade its linerboard mill in Rome, GA, to "modernize operations" in three different phases over the next three years, the company told a local development authority in northwestern Georgia.

The Rome mill capacity is 913,000 tons/yr of unbleached kraft linerboard on two machines. IP acquired the mill from Temple-Inland in early 2012.

The Rome-Floyd Development Authority approved authorizing revenue bonds on Sept. 17 for the acquisition and installation of equipment at the mill, according to a report in theRome News-Tribune.

The main focus of the program is likely to be on improving product quality and increasing efficiency rather than incremental capacity expansion, according to one contact. IP provided no additional details on the scope of the project.

Rome's first machine was installed in 1953 and a second machine was added in 1962. The machine trims are about 235 in. and run at speeds of 2,500-2,550 ft/minute, according to RISI Mill Intelligence. RISI estimates the mill is between the second- and first-quartile in cash manufacturing costs.

Both of Rome's PMs were rebuilt extensively as part of a $190 million modernization program in 1988-89 and the No. 2 machine was rebuilt again with addition of a new headbox in 2005. PM 1 produces standard and heavier weight grades, while PM 2 produces standard and lighter weight linerboard.

A recycling line for old corrugated containers (OCC) was moved to the mill in 2004 from Temple-Inland's shut Antioch, CA, containerboard mill. About 10% of the mill's furnish comes from OCC and new double lined kraft corrugating clippings and the rest from unbleached softwood kraft pulp.

Rome is now down for about 3.5 weeks in September for boiler maintenance, but it was unclear whether this was for the first phase of the upgrade program. The current outage would result in an estimated 60,000 tons production loss.

 

Containerboard: IP plans $100+ million upgrade for its Rome, GA kraft linerboard mill

Posted in: Packaging Technology 09/20/2013 - 11:35

OAKLAND, Sept. 20, 2013 (PPI Pulp & Paper Week) -International Paper (IP) plans on spending $100-150 million to upgrade its linerboard mill in Rome, GA, to "modernize operations" in three different phases over the next three years, the company told a local development authority in northwestern Georgia.

The Rome mill capacity is 913,000 tons/yr of unbleached kraft linerboard on two machines. IP acquired the mill from Temple-Inland in early 2012.

The Rome-Floyd Development Authority approved authorizing revenue bonds on Sept. 17 for the acquisition and installation of equipment at the mill, according to a report in theRome News-Tribune.

The main focus of the program is likely to be on improving product quality and increasing efficiency rather than incremental capacity expansion, according to one contact. IP provided no additional details on the scope of the project.

Rome's first machine was installed in 1953 and a second machine was added in 1962. The machine trims are about 235 in. and run at speeds of 2,500-2,550 ft/minute, according to RISI Mill Intelligence. RISI estimates the mill is between the second- and first-quartile in cash manufacturing costs.

Both of Rome's PMs were rebuilt extensively as part of a $190 million modernization program in 1988-89 and the No. 2 machine was rebuilt again with addition of a new headbox in 2005. PM 1 produces standard and heavier weight grades, while PM 2 produces standard and lighter weight linerboard.

A recycling line for old corrugated containers (OCC) was moved to the mill in 2004 from Temple-Inland's shut Antioch, CA, containerboard mill. About 10% of the mill's furnish comes from OCC and new double lined kraft corrugating clippings and the rest from unbleached softwood kraft pulp.

Rome is now down for about 3.5 weeks in September for boiler maintenance, but it was unclear whether this was for the first phase of the upgrade program. The current outage would result in an estimated 60,000 tons production loss.

 

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OAKLAND, Sept. 20, 2013 (PPI Pulp & Paper Week) -Pratt Industries announced plans to build a 360,000 tons/yr recycled containerboard mill adjacent to its massive Valparaiso, IN, box plant for completion by July 2015. The company must still complete the approval process for the new mill, but hopes to break ground by March.

Pratt last started up a new containerboard mill in the USA in Shreveport, LA, in 2009 -- the company's third US containerboard operation.

In Valparaiso, the $260 million facility would be the fourth greenfield lightweight recycled containerboard mill Pratt has built in the USA since 1995. With completion of the Valparaiso mill, the company's total capacity would reach 1.5 million tons/yr or about 4% of North American containerboard capacity.

"This new facility will allow us to better service the needs of our expanding customer base not only in the Midwest, but throughout the US," said Pratt Industries owner and chmn Anthony Pratt. "And Indiana is a perfect fit for us."

The Valparaiso project is among seven that could be done from 2013 to 2015 in North America. Of the seven, four would be conversions and three new PMs. So far, Norampac started a new lightweight containerboard machine in Niagara Falls, NY, and Atlantic Packaging and SP Fiber Technology converted newsprint machines to containerboard in Whitby, ON, and Dublin, GA, respectively.

Pratt has looked for a new mill location because it needs additional containerboard to supply growing demand from its network of about 38 box plants (including 12 corrugator plants and 15 sheet plants plus a sheet feeder), according to contacts. With its integration today now above the 100% level, the company buys increasing amounts of containerboard from outside producers.

The firm's box shipment growth has been in the mid to high single-digit range "from customers seeking to reduce packaging weight and use packaging based on 100% recycled fiber to improve sustainability," one contact said.

'World's biggest' box plant.Valparaiso has long been seen as a potential site for the mill because of the company's existing 500,000 ft2box plant where two 110-in corrugators operate that are capable of cutting up about 900 tons/day of containerboard. "Valpo," which company officials call "the largest box plant in the world," runs about a dozen box converting lines and sells some sheets to Pratt's existing plants in the Midwest. The Valparaiso plant was built around 2000.

Pratt's strategy focuses on establishing board mills, corrugator plants, and sheet plants (the latter often acquired) in a "hub-and-spoke" model for each region, according to contacts. In what would appear to be a related move, the company announced plans recently to install a 110-in. corrugator and new building for its large Lewisburg, OH, sheet plant. The plant would be another outlet for containerboard output from the planned Valparaiso mill and possibly allow Pratt to add more box converting lines at the Valpo plant.

In addition to the onsite integration, the economics of building a mill in Valparaiso are also attractive because of reduced logistical costs in the company's box plant system, contacts said. Pratt now ships containerboard into Valparaiso from its Staten Island, NY, and Shreveport, LA, containerboard mills at a transport cost of $50-60/ton, one contact said.

'Lightest' weight focus.The new PM for the Valpo mill is ordered but Pratt Industries did not name the supplier. The machine is to be capable of producing both recycled linerboard and corrugating medium "in the lightest weights if future demand develops for them in the US market," a contact said.

The company's last machine installed at Shreveport in 2009 produces 20- to 40-lb containerboard.

Furnish for the new mill's machine is expected to be a combination of mixed office paper and old corrugated containers (OCC) similar to the company's other mills that use a majority mixed waste furnish. Pratt manages 13 recycling centers in the eastern US market.

State and local incentives.Anthony Pratt told a local newspaper that the company looked at many potential sites for the mill and narrowed potential locations to two in Indiana and one in Ohio before selecting Valparaiso.

To help close the deal, the state of Indiana offered the company various tax incentives. The City of Valparaiso offered tax abatement and tax increment financing as well as conduit financing for $200 million in revenue bonds for the mill and equipment.

The Indiana Economic Development Agency offered Pratt Paper (Indiana) LLC up to $1.2 million in conditional tax credits and up to $200,000 in training grants based on the company's job creation plans. Pratt expects to create 137 new jobs at the mill by 2018 in addition to the 311 already employed at its Valparaiso box plant.

The Northwest Indiana Regional Development Authority is adding another $1.4 million, which can be spent on capital improvements and infrastructure. NIPSCO, the local utility, is offering $15 million in energy and infrastructure incentives.

'Revolutionary concept.'Pratt Industries is the sixth largest US containerboard producer. Together with his two sisters, Anthony Pratt also owns Visy, Australia's largest containerboard/box producer. Visy was created and developed by 'his late father Richard Pratt, whose initial foray into the US market to buy a virgin containerboard mill in Macon, GA, in 1987 and two box plants turned out be a "nightmare," one contact recalled.

But after selling off the original assets, the Pratts returned to build a new company based on the "then revolutionary concept" of installing the latest technology paper machines based on recycled fiber and closely integrating them with corrugators (company officials called the concept the "milligator") -- basically staying true to the company's original business strategy in the Australian market.

"Pratt, like (General Douglas) MacArthur vowed that he would return and he did," the contact said.

Pratt Industries started up its first new mill in Conyers, GA, adjacent to an existing corrugated sheet feeder in 1995, followed by the Staten Island mill in New York City in 1997 and Shreveport in 2005. The trims on the three machines are 200-220 in with speeds of 3,200-3,450 ft/min. The first two PMs were Voith Sulzer gap formers, while the latest Shreveport PM, was a Carcano fourdrinier -- and all were equipped with size presses and shoe presses.

Display division expansion.Pratt has expanded its display division's manufacturing and fulfillment services in the US Northeast point-of-purchase market. It recently acquired a 115,000 ft2facility in Reading, PA, that brings the division's "high-end" manufacturing locations to three plants, according to a company official. Die-cutting, litho laminating, and 4/color flexographic printing is done at the Reading plant. In addition, the Northeast regional offices moved to a new location in Totowa, NJ, and added seven employees, according to Pratt Display's VP sales and marketing David Connors.

Recycling milestone.Pratt Industries said it has recycled five million tons of recovered paper at its Staten Island, NY, mill since it opened in 1997. "About half of all the paper New Yorkers recycle is shipped here and recycled through the Pratt Staten Island mill," said Mayor Michael Bloomberg at a press conference. Bloomberg said the mill will help the city fulfill its goal of increasing the 'recycling rate 30% by 2017 from 2011.

Pratt to build 360,000 tons/yr recycled containerboard mill next to big Valparaiso box plant in a $260 million project

Posted in: Packaging Technology 09/20/2013 - 11:25

OAKLAND, Sept. 20, 2013 (PPI Pulp & Paper Week) -Pratt Industries announced plans to build a 360,000 tons/yr recycled containerboard mill adjacent to its massive Valparaiso, IN, box plant for completion by July 2015. The company must still complete the approval process for the new mill, but hopes to break ground by March.

Pratt last started up a new containerboard mill in the USA in Shreveport, LA, in 2009 -- the company's third US containerboard operation.

In Valparaiso, the $260 million facility would be the fourth greenfield lightweight recycled containerboard mill Pratt has built in the USA since 1995. With completion of the Valparaiso mill, the company's total capacity would reach 1.5 million tons/yr or about 4% of North American containerboard capacity.

"This new facility will allow us to better service the needs of our expanding customer base not only in the Midwest, but throughout the US," said Pratt Industries owner and chmn Anthony Pratt. "And Indiana is a perfect fit for us."

The Valparaiso project is among seven that could be done from 2013 to 2015 in North America. Of the seven, four would be conversions and three new PMs. So far, Norampac started a new lightweight containerboard machine in Niagara Falls, NY, and Atlantic Packaging and SP Fiber Technology converted newsprint machines to containerboard in Whitby, ON, and Dublin, GA, respectively.

Pratt has looked for a new mill location because it needs additional containerboard to supply growing demand from its network of about 38 box plants (including 12 corrugator plants and 15 sheet plants plus a sheet feeder), according to contacts. With its integration today now above the 100% level, the company buys increasing amounts of containerboard from outside producers.

The firm's box shipment growth has been in the mid to high single-digit range "from customers seeking to reduce packaging weight and use packaging based on 100% recycled fiber to improve sustainability," one contact said.

'World's biggest' box plant.Valparaiso has long been seen as a potential site for the mill because of the company's existing 500,000 ft2box plant where two 110-in corrugators operate that are capable of cutting up about 900 tons/day of containerboard. "Valpo," which company officials call "the largest box plant in the world," runs about a dozen box converting lines and sells some sheets to Pratt's existing plants in the Midwest. The Valparaiso plant was built around 2000.

Pratt's strategy focuses on establishing board mills, corrugator plants, and sheet plants (the latter often acquired) in a "hub-and-spoke" model for each region, according to contacts. In what would appear to be a related move, the company announced plans recently to install a 110-in. corrugator and new building for its large Lewisburg, OH, sheet plant. The plant would be another outlet for containerboard output from the planned Valparaiso mill and possibly allow Pratt to add more box converting lines at the Valpo plant.

In addition to the onsite integration, the economics of building a mill in Valparaiso are also attractive because of reduced logistical costs in the company's box plant system, contacts said. Pratt now ships containerboard into Valparaiso from its Staten Island, NY, and Shreveport, LA, containerboard mills at a transport cost of $50-60/ton, one contact said.

'Lightest' weight focus.The new PM for the Valpo mill is ordered but Pratt Industries did not name the supplier. The machine is to be capable of producing both recycled linerboard and corrugating medium "in the lightest weights if future demand develops for them in the US market," a contact said.

The company's last machine installed at Shreveport in 2009 produces 20- to 40-lb containerboard.

Furnish for the new mill's machine is expected to be a combination of mixed office paper and old corrugated containers (OCC) similar to the company's other mills that use a majority mixed waste furnish. Pratt manages 13 recycling centers in the eastern US market.

State and local incentives.Anthony Pratt told a local newspaper that the company looked at many potential sites for the mill and narrowed potential locations to two in Indiana and one in Ohio before selecting Valparaiso.

To help close the deal, the state of Indiana offered the company various tax incentives. The City of Valparaiso offered tax abatement and tax increment financing as well as conduit financing for $200 million in revenue bonds for the mill and equipment.

The Indiana Economic Development Agency offered Pratt Paper (Indiana) LLC up to $1.2 million in conditional tax credits and up to $200,000 in training grants based on the company's job creation plans. Pratt expects to create 137 new jobs at the mill by 2018 in addition to the 311 already employed at its Valparaiso box plant.

The Northwest Indiana Regional Development Authority is adding another $1.4 million, which can be spent on capital improvements and infrastructure. NIPSCO, the local utility, is offering $15 million in energy and infrastructure incentives.

'Revolutionary concept.'Pratt Industries is the sixth largest US containerboard producer. Together with his two sisters, Anthony Pratt also owns Visy, Australia's largest containerboard/box producer. Visy was created and developed by 'his late father Richard Pratt, whose initial foray into the US market to buy a virgin containerboard mill in Macon, GA, in 1987 and two box plants turned out be a "nightmare," one contact recalled.

But after selling off the original assets, the Pratts returned to build a new company based on the "then revolutionary concept" of installing the latest technology paper machines based on recycled fiber and closely integrating them with corrugators (company officials called the concept the "milligator") -- basically staying true to the company's original business strategy in the Australian market.

"Pratt, like (General Douglas) MacArthur vowed that he would return and he did," the contact said.

Pratt Industries started up its first new mill in Conyers, GA, adjacent to an existing corrugated sheet feeder in 1995, followed by the Staten Island mill in New York City in 1997 and Shreveport in 2005. The trims on the three machines are 200-220 in with speeds of 3,200-3,450 ft/min. The first two PMs were Voith Sulzer gap formers, while the latest Shreveport PM, was a Carcano fourdrinier -- and all were equipped with size presses and shoe presses.

Display division expansion.Pratt has expanded its display division's manufacturing and fulfillment services in the US Northeast point-of-purchase market. It recently acquired a 115,000 ft2facility in Reading, PA, that brings the division's "high-end" manufacturing locations to three plants, according to a company official. Die-cutting, litho laminating, and 4/color flexographic printing is done at the Reading plant. In addition, the Northeast regional offices moved to a new location in Totowa, NJ, and added seven employees, according to Pratt Display's VP sales and marketing David Connors.

Recycling milestone.Pratt Industries said it has recycled five million tons of recovered paper at its Staten Island, NY, mill since it opened in 1997. "About half of all the paper New Yorkers recycle is shipped here and recycled through the Pratt Staten Island mill," said Mayor Michael Bloomberg at a press conference. Bloomberg said the mill will help the city fulfill its goal of increasing the 'recycling rate 30% by 2017 from 2011.

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SAN FRANCISCO, Sept. 17, 2013 (RISI) -US box shipments remained sluggish in August and containerboard inventories at box plants and mills jumped by nearly 147,000 tons as mills ran at close to 100% of capacity, according to the latest Fibre Box Assn. and American Forest & Paper Assn statistics released today.

Total containerboard inventories at box plants and mills jumped by 146,600 tons to 2.48 million ton at the end of August from 2.33 million tons the prior month. This compares to an average decrease for August over the past decade of 21,000 tons-in a "third straight monthly inventory blowout," according to Chip Dillon of Vertical Research Partners.

At 2.48 million tons, inventories are at their "highest for August in eight years (or since 2.553 million tons in August 2005)," he noted. Weeks of supply a 4.3 weeks were also at their highest level since August 2005.

Since June total containerboard and box plant inventories jumped by 338,000 tons (16%)-"nearly nine times the average 39,000 ton increase seen for these three months over the previous 10 years," Dillon noted.

US corrugated box shipments in August totaled 31.74 billion ft2, down 3.4% from a year ago on an actual basis, but up 1.0% average-week (adjusted one less day in the latest month), FBA reported.

Year-to-date box shipments were down 0.4% actual and up 0.8% from the first eight months of 2012.

Containerboard mills ran at 99.6% of capacity in August, up from 98.6% in July and a year-to-date average of 96.9%, according to the American Forest & Paper Assn. Year-to-date mills operated at 96.9%.

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US containerboard inventories jump 147,000 tons in August to their highest level for the month in eight years

Posted in: Packaging Technology 09/17/2013 - 03:39

SAN FRANCISCO, Sept. 17, 2013 (RISI) -US box shipments remained sluggish in August and containerboard inventories at box plants and mills jumped by nearly 147,000 tons as mills ran at close to 100% of capacity, according to the latest Fibre Box Assn. and American Forest & Paper Assn statistics released today.

Total containerboard inventories at box plants and mills jumped by 146,600 tons to 2.48 million ton at the end of August from 2.33 million tons the prior month. This compares to an average decrease for August over the past decade of 21,000 tons-in a "third straight monthly inventory blowout," according to Chip Dillon of Vertical Research Partners.

At 2.48 million tons, inventories are at their "highest for August in eight years (or since 2.553 million tons in August 2005)," he noted. Weeks of supply a 4.3 weeks were also at their highest level since August 2005.

Since June total containerboard and box plant inventories jumped by 338,000 tons (16%)-"nearly nine times the average 39,000 ton increase seen for these three months over the previous 10 years," Dillon noted.

US corrugated box shipments in August totaled 31.74 billion ft2, down 3.4% from a year ago on an actual basis, but up 1.0% average-week (adjusted one less day in the latest month), FBA reported.

Year-to-date box shipments were down 0.4% actual and up 0.8% from the first eight months of 2012.

Containerboard mills ran at 99.6% of capacity in August, up from 98.6% in July and a year-to-date average of 96.9%, according to the American Forest & Paper Assn. Year-to-date mills operated at 96.9%.

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