Norske Skog/Klabin join up

The 50/50 joint venture, Norske Skog Klabin, will operate Klabin's existing newsprint business in Brazil. The unit includes one newsprint machine, the 130,000 ton/yr PM 6, at the Monte Alegre mill in Parana state. Norske Skog has also initiated a pre-feasibility study by Jaakko Pöyry into the installation of a new newsprint machine to replace PM 6. If this plan goes ahead, Klabin intends to convert PM 6 to other grades. The Brazilian firm has been looking into alternatives for the machine, such as joining up with a partner, for some time.

Acquisition trail stays hot: Norske Skog is still on the look-out for further expansion opportunities around the globe. In particular, Norske Skog is scouting around for more lightweight coated (LWC) capacity, according to a company source. North America and Europe are the most likely regions for Norske Skog to make a move in this grade, he added.

But the spokesman stressed that any expansion in the LWC sector would come through acquisitions or mergers as the company is not happy about the amount of new capacity coming into the market.

Norske Skog does not have any specific target company in its sights for a merger or acquisition, but the spokesman ruled out Burgo and Haindl as possibilities, saying that the two firms are not on the company's "acquisition list".

Buyers battle to snap up Jari

Jari recently announced that it had been sold by Jata, a holding of the Freering brothers, for Real 1 ($0.5). Jari was snapped up by Saga Participações, a holding of the Orsa group. The Orsa group also agreed to take on the troubled pulp mill's debt, estimated at $340 million when creditor payments were suspended in 1996.

But the president of Tembec, Frank Dottori, said that the company has made an offer to buy Jari and that discussions are continuing. The Canadian pulp producer reportedly made an offer of $200 million for Jari late last year.

Although shareholders have approved the sale of Jari to the Orsa group, which has interests in the packaging, pulp and forest industries, the company's creditors have not yet given it the green light.

Jari is still hammering out the final details on the company's debt restructuring program with its main creditors, which include Banco do Brasil and the Brazilian Development Bank (BNDES).

The deal could still collapse if Jari's creditors do not accept the proposed offer. But sources at both Orsa and BNDES were confident that an agreement would be reached by the end of January.

The sale also includes Jari's 45,000 ha of eucalyptus forest which has an average annual yield of 39 mÆ/ha. Jari has one pulp line at its mill in the Amazon, in northern Brazil. Some 88% of the site's 290,000 ton/yr output of bleached eucalyptus pulp is sold in Europe.

Bauernfeind wraps up rebuild

The rebuilt PM will produce mainly semi-chemical fluting in a basis weight range of 80-100 g/m2. But the machine is also able to manufacture 90-100 g/mÅ testliner and 80-120 g/m2 schrenz.

Andritz changes hands

The pulp and paper machinery supplier, Andritz, has seen a change of ownership. The German-based company, Agiv, has sold off all of its shares in Andritz to a group of investors. The investors include the Carlyle group, which has a 47.5% stake, and Unternehmens Invest, which has purchased a 25% share. Andritz's chief executive officer, Wolfgang Leitner, the Custos private foundation and members of the Andritz executive board have also snapped up a 27.5% stake.

A company spokesman confirmed that there are no plans to sell off any part of Andritz following the change in ownership. The next move on the cards for the supplier is flotation on the stock exchange. But plans for the listing are still at an early stage and it is not yet certain which exchange the company will be listed on. The flotation is penciled in for the next three to four years.

Metsä-Serla aims to refocus

Metsä-Serla is set to spend Euro 2.5 billion ($2.5 billion) on carrying out its restructuring plans between 2000 and 2003. Core business areas such as printing and packaging have been targeted for expansion, mainly through acquisitions, which could take place in North America and Asia. Metsä-Serla's primary operating base is in Europe, but activities in other parts of the world will play an increasing role.

The company has not ruled out new capacity investments, depending on market conditions. The Finnish producer's goal is to double its present size in core sectors, while non-core businesses will undergo individual strategic reviews. Metsä-Serla said it will look at the potential of either developing each non-core unit into a core business or divesting them.

Strategic alliances could also feature highly on the company's agenda over the coming years despite Metsä-Serla's quest for a simpler structure. The company sees an alliance as an essential tool, which it can use to actively participate in industry consolidation.

UPM decides against Indonesian move

The Finnish giant had an option to convert a $121 million loan to APRIL into a 15.4% stake at net asset value in the Indonesian pulp mill by 31 December 1999. But as UPM-Kymmene has not exercised the option, the loan has been extended for a further two years on commercial terms.

APRIL has pledged its 49% share in the Chinese joint venture, Asia Pacific Forest Products (Suzhou), as collateral for the loan. UPM-Kymmene also holds a 49% stake in the operation.

Metsä-Serla may sell off tissue

SCA is a hot favorite to put in a bid following the move to increase its shares in Metsä Tissue from 11.7% to 19.3% last year. A SCA spokesman recently said the company is interested in acquiring the Finnish tissue producers at a "reasonable price" if Metsä-Serla decides to sell up.

Kymi converts to coated paper

PM 8 will stop producing its regular output of 300,000 tons/yr of uncoated woodfree to switch to 400,000 tons/yr of coated woodfree paper. The investment is due to start this year and should be completed in the second half of 2001.

Metsä-Botnia halts mottled output

The production switch will take place gradually this year and the mill aims to reduce its output of mottled liner by 20,000 tons in 2000. Mottled liner production should stop completely by the end of the year.

The plant has one 340,000 ton/yr board machine that currently manufactures mottled liner as well as coated and uncoated white top liner.

Germany starts up first market pulp mill

The unit originally manufactured 160,000 tons/yr of sulfite pulp, but now has a design capacity of 280,000 tons/yr of bleached softwood kraft pulp.

Mercer earlier planned to sell the mill to Metsä-Serla and Metsäliitto, but the deal fell through. The company decided to keep hold of Rosenthal for the time being rather than look for another buyer due to the recovery of the pulp market. The spokesman confirmed that Mercer has since been in discussions to sell the facility, but said that it is not "seriously entertaining" any offers.

Mercer may even invest further at the mill to raise capacity to 350,000 tons/yr. The pulp line's recovery unit was built with a capacity of 350,000 tons/yr in case of further expansion. Mercer would just have to add a batch digester to the line to boost its output. But any new investments will depend on future market conditions.

Prowell orders Valmet PM

The 6.3 m wide PM will have a design speed of 1,500 m/min, making it the world's fastest linerboard machine, according to Valmet. The PM is also said to be the first liner/fluting PM with two gap formers.

The PM will be housed at a newly built site near Magdeburg in the east of Germany and is due to start up in early 2001. The total investment cost, including mill construction, is set at DM 250 million ($129 million).

Stora Enso boosts Kabel again

The upgrade will boost PM 4's output of magazine paper by some 12,000 tons/yr. The project includes structural modifications to the PM, as well as the provision of an additional reel wrapping machine. The rebuild is due for completion in January 2001.

Ahlstrom splashes out in Italy

The mill is due to stop production for several weeks in September this year for a rebuild of both the paper machine and the off-machine coater, as well as improvements to the stock preparation system. When the PM restarts at the beginning of October, the mill aims to become Europe's benchmark producer of one-side lightweight coated paper. The PM will be equipped with a completely new wet end, including a new headbox.

AWA buys Dutch banknote mill

The chief executive officer of AWA's premium fine, specialty and coated division, Mr Wanecq, said that the Anglo-French company has signed an agreement in principal to buy VHP. The offer has been submitted to the Dutch regulation authorities for approval.

Wanecq explained that the price of the deal has not been finalized as it is linked to the financial performance of the mill during late 1999 and early 2000. The unit had a turnover of Dfl 48 million ($23 million) in 1998.

The VHP mill produces mainly bank note paper and is situated in Ugchelen, the Netherlands.

Norske Skog finds buyer for Hurum

Guipuzcoana starts up new PM

The Spanish producer also plans to increase pulp capacity at the mill to supply the new machine. The company is in advanced talks with suppliers and expected the investment plan to be finalized by the end of January.

AssiDomän axes cartonboard division

The cartonboard division is going under the hammer as the Swedish firm believes it has better prospects of achieving optimum, long term profitability with a larger business structure outside AssiDomän. The company's directors decided to sell the unit following a strategic evaluation of the whole company's operations.

AssiDomän Cartonboard is one of Europe's leading manufacturers of liquid packaging board and other packaging board grades, according to the company. The business is located in Frövi in central Sweden and comprises an integrated pulp and board mill that operates one board machine. The unit is forecast to have a sales turnover of some SEK 2,500 million ($292 million) in 2000. The board machine has a capacity of 350,000 tons/yr, while the mill's pulp capacity is some 250,000 tons/yr.

AssiDomän invests in liner: AssiDomän has also decided to increase the integration of pulp and paper production at AssiDomän Kraftliner in Piteå, northern Sweden.

The company plans to achieve its aim by raising the Piteå mill's bleaching capacity from 90,000 tons/yr to 125,000 tons/yr of birch pulp. The move will reduce AssiDomän's manufacturing costs for white top kraftliner.

The investment will cost around SEK 138 million. Work on the plant's existing digester, bleach plant, recovery boiler and lime kiln is scheduled to take place late this year.

SCA merges units

The new division will be named SCA Forest Products and will assume responsibility

for all the group's forestry and sawmill operations, as well as pulp (kraft and chemi-thermomechanical) and publication papers.

P&G starts up tissue PM

LPC orders tissue PM

Australia

Visy starts work on new mill

Visy has yet to decide on the final product mix for the PM though. The mill will have the potential to produce a number of grades on the machine including 100% virgin fiber linerboard and a range of products utilizing wastepaper. But the Tumut mill may not utilize all of its paper capacity as the company could opt to sell some pulp on the market.

Fletcher Challenge takes a new tack

The company said the change would be the best way to restore shareholder value for each of the group's four divisions - paper, forests, energy and construction. Analysts welcomed the announcement, saying that it showed that FC was still committed to reorganizing the company. The new scheme must be approved by shareholders, but the company anticipates completing the program by December 2000 at the latest. A reorganization of each unit will also be carried out within the same timeframe.

CMPC ponders new pulp mill

But the final decision on investing in a new plant is still a long way off. CMPC explained that it must first wait a few years until its Argentinean forest plantations mature before it can make any firm plans.

CMPC invests in Laja mill

The company plans to replace the feeding line to the continuous digester on its #2 pulp line, as well as replacing the cutter and baling system on the #2 drying line. Startup of the new feeding line is penciled in for November. CMPC also aims to upgrade the power boiler on pulp line #1.

CMPC said that although the upgrade will not lead to a capacity increase in the short term, it will allow the mill to raise production following additional investment.

The modernization, named Profal II, is the second phase of an earlier $130 million investment carried out by the Chilean producer in 1995.

The Laja mill has two pulp lines which produce 320,000 tons/yr of radiata pine pulp.

Durango snaps up US board producer

The group did not reveal the price tag on the deal, but said its net revenues are set to climb to $1.1 billion with its latest purchase.

China and Thailand revive pulp plans

Chinese and Thai officials have showed renewed interest in reviving plans to build a $1,200 million pulp mill in Thailand. The joint venture project was one of the items on the agenda during the recent visit of Chinese president, Jiang Zemin, to Thailand.

The proposals being discussed are for a 700,000 ton/yr eucalyptus pulp mill to be built at Advance Agro's mill in Prachinburi, about 100 miles east of Bangkok. Under the original plan, the Chinese government would take a 51% stake, with Advance Agro owning the remainder. The majority of the output would be sold in China.

During the recent meeting, top officials from both countries signed an agreement on the land to be used for the eucalyptus plantations. Negotiations about the pulp mill continue.

Advance Agro already has two pulp lines at the Prachinburi mill. Proposals for a third line have been on the table for a few years, but little progress has been made due to the region's recent financial turmoil.

Bank takes control of Donghae pulp

Korean pulp producer, Donghae Pulp, has found new owners. The Korea Development Bank (KDB) swapped its loans for a 51.36% stake in the cash-strapped pulp company. Other financial institutions also carried out debt-for-equity swaps, completely changing the face of Donghae Pulp. The latest moves aim to put the company on a sounder footing following its bankruptcy in April 1998.

Donghae Pulp was previously owned by Korean papermakers Moorim Paper, Hankuk Paper and Kyesung Paper. Under the latest deal, these stakes have been wiped out, with KDB accusing the previous owners of bad management. KDB has the option to sell its majority stake to a domestic or foreign company.

More fine paper planned for China

China's Shandong Chenming Paper Holdings has unveiled ambitious plans to build a new 150,000 ton/yr fine paper machine. Construction is expected to take two years to complete, with the first commercial volumes rolling off the machine in 2001. The project will cost RMB 1.52 billion ($184 million).

Aracruz edges toward another line

The third line could be installed for less than half the cost of building a greenfield mill and would utilize one of three recovery boilers that currently serve the mill's two pulp lines, the company said. Aracruz estimates the cost of the project could top $700 million.

Aracruz's planning department has already conducted a primary study into the project. The department presented its findings to the board in August and has been given instructions to "intensify" its research. A firm decision on the project is now expected by the beginning of next year. Once the decision has been made, the company anticipates that it would be a further 18 months before the line could come on stream.

Aracruz would aim to have the line ready for action in 2002, should the project get the go-ahead. The next step for the planning department is to find out exactly what is required in terms of wood supply, land and costs. chile united arab emirates brazil StockWatch International canada Source: Morgan Stanley Capital Investment

VCP targets more pulp

Once final approval is given, the company hopes to begin construction in September 2000, with new market pulp capacity reaching the market in the middle of 2002. The project has been shelved for over 18 months, with market conditions forcing the delay.

Upgrade complete: VCP has completed a $30 million upgrade on PM 1 at the Luiz Antonio mill, with the installation of a Voith Sulzer shoe press. VCP hopes the upgrade will increase output of cut-size copy paper by 40,000 tons/yr.

BN targets tissue PM

San Andres makes move on tissue PM

Installation work on the 40 ton/day machine, PM 2, will begin in December for startup by the end of March. Plans to start the machine in April this year were thwarted in the wake of the Latin American financial crisis that affected Argentina. The $10 million project was funded using internal reserves and loans secured from financial institutions.

Chile gets on board

Further construction work is scheduled to start in the middle of 2000 and the company expects the new capacity to reach the market by April 2001. The machine was originally ordered in 1998, but the project was delayed while changes were made to the engineering plans.

Enron joins BC bidding

The Swedish pulp producer did not deny the rumor that it was through to the final round of talks to buy Skeena's mill, but declined to comment on this latest development. Södra has been looking at various BC mills since the beginning of 1999 when it announced its new expansion strategy.

Sharma invests in UAE and USA

The Sharma Group subsidiary, Unicell Paper Mills, ordered a Recard tissue machine for its Johannesburg mill last year. But the Sharma group has altered its plans and will now install the 70 ton/day PM at an unnamed facility in the USA. The 2.7 m wide crescent former PM has a design speed of 1,400 m/min. Recard will also supply a slitter/rewinder for the line.

Delivery of equipment for both projects will take place in April and startup is penciled in for October or November next year.

Turkey's mills mourn losses

Seka estimated the damage costs at a hefty $5 million. But the mill's most devastating loss was the death of five employees who perished during the quake.

Seven employees also perished at the Izmit-based group, Kartonsan. The company was forced to halt production on both of its board machines following the tremors, but managed to restart PM 1 on 6 September. The group produces around 158,000 tons/yr.

Turkey's paper industry lost a further two lives at Ipek Kagit. The 36,000 ton/yr tissue producer suffered most of the damage to its buildings. Production at the Istanbul mill was also interrupted, but normal operations were expected to resume by the beginning of October. The company put the cost of repairing the destruction at some $2 million.

Taiwan troubled too: Many paper mills are also struggling to secure steady power supplies following the massive earthquake that shook Taiwan on 21 September. But most mills appear to have escaped structural damage as they are located far from the earthquake's epicenter, which was near the central counties of Nantou and Taichung. One mill that is known to have been damaged slightly was Yuen Foong Yu's Chaug Hwa mill, an old plant located near to Taichung.

Experts are still trying to assess the full impact of the earthquake on Taiwan's paper industry and the overall economy. But according to one of Taiwan's major papermakers, Long Chen, the negative impact will be minimal. Supplies will be temporarily reduced, but paper consumption is expected to be largely unaffected.

In total, Long Chen expected to lose about 10 days of production at its 30,000 ton/yr Ching-Shui tissue mill and at its 72,000 ton/yr Tou Liu woodfree unit. The company's large industrial paper mill, Erh-Lin, managed to avoid the chaos as it has its own co-generation plant to run the four machines.

Ireland Smurfit regroups in Europe

The group's chairman and CEO, Michael Smurfit, said, "The country-based structure served the group well during a period of rapid growth. The structural change reflects the political and economic environment in which we now operate. This restructuring, coupled with our investment in information technology, is a logical development in the context of European monetary union. The newly configured structure will enable a superior operation to emerge with the potential for improved financial performance at all points in the cycle."

Stock Watch International

Source: Morgan Stanley Capital Investment