Tissue360 Editor's Picks: Best of Tissue360 Magazine

INSIDE: ST. CROIX’S NEW TISSUE MILL | RESOLUTE’S TISSUE ANNOUNCEMENT | A CENTURY OF TISSUE | NORTH AMERICAN TISSUE INVESTMENTS ON THE RISE | RIGHT MACHINE, RIGHT COMPANY, RIGHT TIME |

HEALTHY EUROPEAN TISSUE AND TOWEL MARKET | RELIABILITY, EFFICIENCY KEY GOALS FOR TISSUE MILLS | ARE WE RUNNING OUT OF RECYCLED FIBER?

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ALSO: Lincoln Turns Adversity into OpportunityResolute Invests in New Tissue Machine

iT’s Tissue Attracts 1,000-Plus to Italy


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2 TISSUE360° SPECIAL ISSUE www.tappi.org

3 Setpoint: A Rapidly Changing Tissue IndustryKEN PATRICK

4 St. Croix Tissue Ready to Start New Mill in Maine KEN PATRICK

10 Resolute’s Tissue Announcement a Sign of the Future in Tissue? MATT ELHARDT

12 A Century of Tissue: Career Experts Explore Past, FutureKEN PATRICK

16 North American Tissue Investments on the Rise

18 Wausau Paper’s ATMOS at Harrodsburg: Right Machine for Right Company at the Right TimeKEN PATRICK

22 Healthy European Tissue and Towel Market Driven by Growth in Per Capita Consumption

23 Maximizing Yankee Dryer Safety, Reliability, Efficiency Key Goals for Today’s Tissue MillsKEN PATRICK

26 Are we Running Out of Recycled Fiber? KEN PATRICK

|contents BEST OF TISSUE360° MAGAZINE | SPECIAL ISSUE

BEST OF TISSUE360° MAGAZINE

SPECIAL ISSUEThis special issue of Tissue360o is intended as an introduction to the magazine (if you haven’t already seen it), and also as a thank you for becoming involved with

TAPPI. Included in this issue are several of my favorite articles that have appeared in recent issues of the magazine. Selected to be representative of the broad range

of issues and topics discussed and analyzed in every issue of Tissue360o, they include two mill stories, developing trends in the North American tissue markets,

a century of tissue making, new tissue industry investments, European tissue market analysis, yankee dryer maximization, and recycled fiber trends in the

tissue arena. Enjoy, and thanks again!

INSIDE: ST. CROIX’S NEW TISSUE MILL | RESOLUTE’S TISSUE ANNOUNCEMENT | A CENTURY OF TISSUE | NORTH AMERICAN TISSUE INVESTMENTS ON THE RISE | RIGHT MACHINE, RIGHT COMPANY, RIGHT TIME |

HEALTHY EUROPEAN TISSUE AND TOWEL MARKET | RELIABILITY, EFFICIENCY KEY GOALS FOR TISSUE MILLS | ARE WE RUNNING OUT OF RECYCLED FIBER?

S P R I N G / S U M M E R 2 015

A CENTURYOF

100

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OF INDUSTRY SE

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ALSO: STRUCTURED TISSUE TECHNOLOGIES

SUPPLIER PROFILE: GAPCONNEW TISSUE TECHNOLOGY ROUNDUP


EENTNTURURYYISSUESS

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ALSO: TISSUE CONVERTING TECHNOLOGY

RECYCLED FIBER PULP DEWATERING

SUCCESS AT GORHAM PAPER AND TISSUE


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1915-2015

ALSO: Lincoln Turns Adversity into OpportunityResolute Invests in New Tissue Machine

iT’s Tissue Attracts 1,000-Plus to Italy


St. Croix TissueReady to Start New Mill in Maine

Lincoln Turns Adversity into OpportunityResolResolute Iute Investnvests in s in New TNew Tissueissue MachMachineine

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View Tissue360° online anytime at http://goo.gl/y2DRRK

TAPPI is a proud member of Two Sidestwosides.us

Tissue360° is the official publication of TAPPI and PIMA: www.tappi.org, www.pimaweb.org. Tissue360° is published bimonthly for TAPPI by Naylor, LLC. Annual subscription for TAPPI and PIMA members is included in dues. Statements of fact and opinions expressed are those of individual authors. TAPPI assumes no responsibility for such statements and opinions. TAPPI does not intend such statements and opinions or construe them as a solicitation of or suggestion for any agreed-upon course of conduct or concerted action of any sort. Copyright 2014 by TAPPI with all rights reserved. To obtain copyright permission to photocopy pages from this publication for internal or personal use, contact Copyright Clearance Center, Inc. (CCC) via their website at www.copyright.com. If you have questions about the copyright permission request process, please contact CCC by phone at +1-978-750-8400. To obtain copyright permission to use excerpts from this publication in another published work, send your specific request in writing to Editor, Tissue360°, 15 Technology Parkway South, Suite 115, Peachtree Corners, GA 30092, USA. Send manuscripts to the Editorial Director at [email protected]. Email address changes to [email protected] or fax them to +1-770-209-7206.

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Published for TAPPI, 15 Technology Parkway SouthPeachtree Corners, GA 30092, 770-446-1400, www.tappi.org

3TISSUE360° SPECIAL ISSUE

setpoint

Tissue360o magazine was launched in the spring of 2012 to track rapidly evolving tissue market trends and production technologies worldwide. Around that time, for example, the U.S., in a century-long love affair with tissue of all kinds, and forever marching to the sound of a different drummer, took a new technological direc-tion in tissue production. Always willing and ready to pay whatever (and then some) for ever-higher-quality tissue, Americans spawned a renaissance in “structured” technologies that is currently reshaping the tissue industry across North America. At the same time, Europeans have been more focused on overall production efficiency and costs, its consumer base being not so sharply focused on quality.

Tissue360o, from its first issue in 2012, has covered the latest advances in structured tissue technologies, along with ongoing developments in conventional tissue making, yankee dryer evolution and tissue converting that impact North America, Europe and other parts of the western world. It does this through regular expert interview features, mill stories, R&D updates, market trend analyses, opinion pieces and comprehensive data reports.

On the other side of the world, China (credited with inventing tissue some 3,000 years ago) and most of Asia have been on a real tissue “tear” these past four or five years, adding new capacity on almost a daily basis. Today,

ADMIN/PRODUCTION/SALES

PUBLISHER,

Pam Blasetti

[email protected]

MANAGING EDITOR,

Leslee Masters

[email protected]

PROJECT MANAGER,

Josh Abromowitz

[email protected]

MARKETING,

Lauren Branin

[email protected]

SALES ASSOCIATES

Tony Chiccarello

Janet Frank

Shaun Greyling

Shane Holt

Anthony Land

Joseph Watkins

INTERNATIONAL SALES

Murray Brett

[email protected]

EDITORIAL STAFF

KEN PATRICK,

Editorial Director/Associate Publisher

[email protected]

LARRY N. MONTAGUE,

President & CEO, TAPPI

[email protected]

ERIC FLETTY,

VP Operations, TAPPI

[email protected]

JAN BOTTIGLIERI,

Editorial Director, Paper 360

[email protected]

MONICA SHAW,

Editorial Director, TAPPI Journal

[email protected]

A Rapidly Changing Tissue Industry

China is a close second to North America in tissue production capac-ity, up from total tissue obscurity prior to 2010. From its beginning, Tissue360o has kept a close watch on the Asian tissue industry and the driving forces pushing it along. From the perspectives of several contributing Asian experts, Tissue360o regularly reports on the chang-ing market climates across Asia, especially China, and the direction the tissue industry is taking there.

This publication serves as an introduction to Tissue360o magazine, outlining its purpose and scope of editorial. In this regard, I have selected several of my favorite articles that have run in recent issues

of the magazine, which reflect both the depth and range of our editorial program. I hope you enjoy these articles as well as those in future issues of Tissue360o that will automatically be coming your way.

Please let me know your thoughts on these and all future articles in the magazine, and feel free to sug-gest other specific subjects and topics that we should be covering. Your feedback is critical to the future of Tissue360o magazine.

Feedback from our readers is what we rely on to keep the magazine fresh and on target.

KEN PATRICKEditorial Director/Associate Publisher, Tissue360°


feature

St. Croix Tissue Ready to Start New Mill in MaineAdjacent to Woodland Pulp in Baileyville, new mill will produce 120,000 tpy of premium tissue aimed at independent converters serving retail markets in the U.S. KEN PATRICK

In this photo, the on-site warehouse will be added onto the left (north) section of the tissue machine building. The mill also has made arrangements for an off-site storage facility several miles from the mill.

St. Croix Tissue is a brand-new pro-ducer of premium tissue parent rolls in the U.S. market. Built adjacent to its sister opera-tion, the Woodland Pulp mill in Baileyville, Maine, which supplies most of its virgin fiber, the new mill is currently preparing to startup the first of two new Andritz PrimeLine tissue machines in the first quarter of 2016. A second

twin PrimeLine machine, already on-site, is being installed with a planned startup in the second quarter of 2016.

Each of the new tissue machines has 60,000 tpy of production capacity. The combined 120,000 tpy will be supplied to independent converters on the U.S. East Coast. The com-pany has an agreement to provide a majority

of its production to one independent East Coast converter that makes bath tissue and towels primarily for the at-home, private label sector.

St. Croix Tissue is owned by Delaware-based International Grand Investment Corp (IGIC), which is investing $120 million (as announced in 2014) to construct the St. Croix mill, named


The Woodland Pulp Mill currently employs about 320 people, and produces 400,000 metric tpy of hardwood pulp from a broad spectrum of maple, birch, beech, and aspen.

County economy, and has created some 250-300 indirect jobs. During groundbreaking ceremonies earlier this year, Maine Gov. Paul LePage said it is the largest single investment in Maine’s paper industry in decades.

Some especially interesting parts of the St. Croix Tissue story are the creative bond financ-ing, tax credits, grants for employee training and other programs the mill was able to take advantage of, including Pine Tree Development Zone status, a program that allows eligible busi-nesses to greatly reduce or virtually eliminate state taxes for up to 10 years (see Financing, Tax Credits, Training Grants sidebar on page 12).

Tissue360o magazine recently visited the new St. Croix mill in Baileyville to gather more infor-mation on this dynamic new operation, meeting with IGIC Vice President Marco L’Italien and St. Croix Tissue Manager Marty Richard. Details they provided of the St. Croix operation are sum-marized in the following sections of this report.

COMMUNITY IMPACT

According to Richard, in the late 1980s there were some 1,200 people working between the pulp and paper mill in Baileyville and the ori-ented strand board (OSB) plant up the road. It was a booming area and a booming town at that time, he emphasizes, but adds that from

there, employment at these mainstay operations dwindled to about 320 people for the past half dozen years, with a devastating impact on the surrounding communities.

“This area has seen some really tough times, like most pulp and paper mill towns in Maine and many other mill towns across America in recent years. So a big piece of the St. Croix story is the rebuilding of the community and the area. On August 31, we put 56 people to work — good paying jobs and good wages. And that doesn’t include the professional staff we have hired — people with tissue making experience and technical expertise. Plus, we’ve recruited and brought in many new people who are buy-ing houses and settling into the community. The St. Croix Tissue project has been a real shot in the arm for the community,” Richard points out.

This facility and the OSB mill have been the only major economic engines in the county; everything else is basically small business.There’s a lot of fishing along the coast, and blueberries are an active business, of sorts.

L’Italien emphasizes that the St. Croix Tissue project “is one of the keys to saving this mill. This was a single-line commod-ity pulp mill, and now we will be making a value-added product out of our fiber.

after the river that forms a natural bound-ary between New Brunswick, Canada, and the U.S., where it is located. In addition to Woodland Pulp and St. Croix Tissue, IGIC also owns the Cascade Pacific Pulp mill in Halsey, Oregon. It acquired both pulp mills at about the same time, in 2010. All three entities are run as separate subsidiaries of IGIC.

The new tissue mill project will add 80 direct jobs to the Baileyville and Washington


We’re still going to make pulp, which will be an important part of our business, but it was absolutely essential for something like this to happen for this mill’s operations to survive.

“This is really a big deal for the mill and for the state of Maine and our Washington County, which has been struggling,” L’Italien continues. “Blueberries can only take you so far. It feels good to have been approved for the New Market Tax Credit and Maine Pine Tree Development Zone programs. Of course, the deal there is that we give some low-income people an opportunity to have better lives, and in this regard, I think we really are going to touch a lot of people in a very positive way.”

MARKETS, TECHNOLOGY,

TRANSPORTATION

In addition to the one independent converter customer, which will take about 60 percent of St. Croix’s production, the mill will supply other market customers also in the East Coast region. These customers all primarily serve the private label markets.

St. Croix considered investing in structured tissue technologies, but in the end decided to go conventional for a variety of reasons. “We actu-ally had some permitting in to the state for a TAD (thru-air dried) tissue machine. We also looked at Voith’s ATMOS and Valmet’s NTT machines. We looked at the strategy and the investment and different aspects of these, and talked with mill owners. The final decision was that we would start with conventional machines.”

Some of the reasoning to go conventional involved the advantages of location adjacent to the Woodland mill, which, in effect, provided the cost, operating and quality advantages of having a fully integrated pulp mill.

As Richard explains, “Our tissue will not be structured, but it will be very high quality — the highest quality that can be made with conventional technology. Our goal is to knock on the door of the structured markets.

“The two main aspects of structured tissue — less fiber use and high quality — become really important issues if your operation does not have an integrated pulp mill. You are buying all of your pulp from the market, and energy becomes a big consideration in this regard. Because we are co-located with the Woodland Pulp mill, we are able to use slush pulp directly from the mill, and thus avoid the drying energy costs and, of course, the repulping costs we would have if buying 100 percent dried pulp from the market,” Richard explains.

Form top to bottom, the mill’s new 18-ft. dia. stainless steel yankee dryer cans recently received at the nearby Port of Eastport in Maine are loaded onto two very large truck trailers for the approximate 40-mile trip to the mill. The transport was very slow and tedious as many power and communications lines along the way had to be carefully lifted for passage of the giant units. In the third photo, the dryers are lifted from the trailers and stored on special platforms at the mill.


Financing, Tax Credits, Training GrantSt. Croix Tissue was able to qualify for several critical bond financing, tax credit and tax reduction programs, as well as employee training grants, due to the economic benefits it is bringing to Washington County, one of Maine’s poorest counties, and the state as a whole. These include the Maine Pine Tree Development Zone program, bond financing through a Finance Authority of Maine (FAME) program, the federal New Market Tax Credit (NMTC) program, and a Maine Community College System employee training grant.

The Maine Pine Tree Development Zone program offers manufacturers, financial service businesses, and targeted technology companies the opportunity to reduce state taxes for a period of time up to 10 years. The PTDZ Program is intended to encourage and reward the creation of new qualified business activity with its accompanying employment and investment in property in economically distressed areas of Maine. The tax benefits are tied to the invest-ments in property and payroll that would not have occurred but for the PTDZ program and that represent a net gain to the business and the Maine economy.

St. Croix Tissue also worked closely with FAME as well as NMTC investors to line up a por-tion of the financing for the project. FAME granted $7.5 million in bond financing to St. Croix Tissue. The company received the bond through FAME’s Major Business Expansion Bond program. The company also qualified for FAME’s New Markets Capital Investment program, which approved $15.6 million in tax credits for three qualified community development entities proposing investments in St. Croix Tissue.

The NMTC Program was established by Congress in 2000 to attract investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax return in exchange for making equity investments.

To help St. Croix develop its workforce, Washington County Community College has been providing customized training to 40 prospective mill workers by delivering a total of seven courses over nine months in everything from pulp and papermaking to math, communications, chemistry, computer skills, and safety.

A grant from the Maine Community College System’s Maine Quality Center program has been providing the training at no cost to the students. “Individuals who successfully completed this program were head and shoulders above their peers as candidates for the jobs we created in Baileyville,” says Richard.

At the mill’s groundbreaking ceremonies last fall were Maine Gov. Paul LePage (left) and A.K. Agarwal, CEO of International Grand Investment Corp., St. Croix Tissue’s parent company. Agarwal has a very strong technical background and extensive pulping experience from around the world.

Currently, about the only other tissue pro-ducer in this general area of the U.S. is Lincoln Paper and Tissue in Lincoln, Maine, though there used to be several others. Currently, Irving operates a tissue mill in Saint John, New Brunswick, across the river from Baileyville. Lincoln serves a very specialized tissue market for colored napkins and other specialty prod-ucts, as well as commodity-type grades.

“Of course, transportation is going to be a big piece/challenge for our business. Our whole business model is based on being able to truck parent rolls from here to our partner converter on the East Coast. And the model works. There is plenty of opportunity to make it better, and we have looked at all kinds of different options between rail and barging. We are only 35 to 40 miles from the deep water Port of Eastport, Maine, from which most of our pulp is exported. We used to ship 100 percent of our pulp from this port, but today we do have more domestic business than we used to.”

WOODLAND PULP MILL

The Woodland Pulp mill, Richard explains, was a Georgia-Pacific operation for about 40 years before being purchased by Domtar in 2001. In 2007, Domtar merged with the white paper assets of Weyerhaeuser, which was basi-cally the old Willamette mills. When all of that came together, and Weyerhaeuser installed a lot more capacity in the late 1990s-2000s, a fine paper machine at the Woodland mill (120,000 tpy of uncoated free sheet capacity) just wasn’t competitive anymore compared with the newer machines.

“So, unfortunately we had to shut down the paper machine in 2007, putting 120 people out of work. Then we transitioned into a single line pulp mill, and in 2010, IGIC bought Woodland Pulp from Domtar for $64 million,” says Richard.

Today, the Woodland mill employs about 320 people and produces 400,000 metric tpy of hardwood pulp from a broad spectrum of maple, birch, beech, and aspen. According to Richard, its specie mix typically includes about 55 percent maple, which is an excellent fiber for tissue, he adds. There also is a need for softwood in the tissue fiber mix, and that will be procured from the market. “We have run some softwood campaigns at Woodland in the past, and that could come back into the mill’s mix later. But for now, it’s making hardwood, and that’s where we will start,” Richard explains.

The tissue operation will consume about a quarter of the pulp mill’s production. The


Marty Richard, Tissue ManagerRichard is a “local guy,” a fourth-generation native of Baileyville. He graduated from the University of Maine with an electrical engineering degree. After graduation, he worked as a service engineer in central Maine (Augusta) for a while, and then an opportunity opened up at the Woodland mill in Baileyville, where he has been since 2000.

Richard started as an electrical engineer at Woodland, and then went into maintenance, followed eventually by operations of the mill’s fine paper machine for several years. When the machine was shut down in 2007, he moved into a maintenance engineering manager’s role, and that’s what he did until an opportunity came up with St. Croix tissue last year, when he became tissue manager.

Marco L’Italien, Vice President, International Grand Investment Corp.L’Italien is a University of Maine chemical engineer, 1986 graduate. He started his career with International Paper in upstate New York at the

Hudson River mill (no longer operating). After three years at Hudson River, he returned to his hometown of Lincoln, Maine, accepting a job with Lincoln Paper and Tissue. He started in the pulp mill and “learned as I went.”

Over 25 years, L’Italien worked his way up from pulp mill superintendent to manager of the pulp and recovery area to mill manager at Lincoln. He then got the opportunity to come to St. Croix this year. “This was an opportunity for me to get back into pulping, where my roots and first passion are as well as tissue, where I had been for the past five years. Some days I pinch myself and ask if I’m really getting to be a part of something like this. Many people go their entire careers and never have the opportunity to do something like this,” L’Italien says.

softwood component will be purchased from various pulp producers in the region. Currently, about 30 percent of Woodland’s market pulp production is going to domestic customers, with 70 percent being exported to Asia (the majority), Europe, and elsewhere.

During the past few years, Richard continues, there’s been a significant amount of overdue maintenance investment in the pulp mill, and there have been a lot of optimization projects (heat exchangers, energy savings projects, etc.) conducted in recent years, but no real major upgrades. “Generally, the previous owners, Georgia-Pacific especially, put quite a bit of money into the mill in the 1990s. They did a bleach plant upgrade, put in a new chip screen-ing room, installed a new chlorine dioxide plant, etc., in the late 1990s. So that’s all fairly modern equipment,” Richard notes.

The fine paper machine was removed by Domtar in 2010, prior to IGIC taking over opera-tions. There were a couple of high density stor-age tanks for the paper machine that have been repurposed to become the slush feed for the two new tissue machines. Also, the mezzanine for the new No. 1 tissue machine (TM 1) air system is located in that building, along with the winder combiner and some auxiliary equipment. “That reduced the size of the infrastructure we had to put in for the overall project,” Richard points out.

“In 2012, the new owners came and we started looking, first of all, at what the opportunities were to reduce our operating costs. At the time, oil was over $100 a barrel. We were burning a No. 6 fuel oil, in our two boilers and lime kiln. The Maine Maritimes and Northeast Pipeline that goes from Sable Island (near Nova Scotia) and connects into Massachusetts is 4.5 miles north of the mill. But we’ve never connected into it because the owners have never had the appetite for the investment.

“We started looking at that and we talked to some of the local gas distribution companies from other places in Maine. They said the tie-in project would probably take a couple of years for permitting, infrastructure, etc. The owners weren’t interested in waiting that length of time. To make a long story short, we permitted the line, and then we installed our own high pres-sure gas pipeline. We now have an 8-in. high pressure pipeline that runs northeast (out that side of the mill), regulated by the Maine Public Utilities Commission. Overall, the owners spent $16 million to get the mill converted to natu-ral gas. And we did it in 10 months or so. That was the first real illustration that these owners are committed, that they mean business. That

project transitioned into other kinds of diver-sifications that helped stabilize the pulp mill.

“With these owners, we looked at all kinds of diversification opportunities, and ultimately the decision was made that tissue is a mature mar-ket, but there is some growth opportunity. We were able to arrange a partnership with a major converter, and it all came together,” Richard says.

Today, with the gas pipeline, the mill’s steam recovery system and its hydroelectric genera-tion capacity, actual energy costs are very low. In fact, it is pretty much energy self-sufficient, and currently sells excess electrical generation onto the local grid. This is allowing the pulp mill and the new tissue mill to put low-production cost, highly competitive products on the market.

The Woodland mill has 10 hydroelectric gen-erators. When there is sufficient water flow, the units can generate 17-18 megawatts. The plant averages about 10-12 megawatts over the course of a year, with the ups and downs in water flow. The mill has been selling power into the grid

since the paper machine was shut down in 2007. “So we will take that energy we are currently putting on the grid and consume it with the tissue machines,” Richard explains.

Just prior to IGIC taking over operations, the Woodland Pulp mill went through an indefinite shutdown in 2009, “where none of our futures were certain, or the future of the facility itself. It’s really come full circle in six years, from complete uncertainty to a really bright future,” Richard says.

PRIMELINE TISSUE MACHINES

Except for one being right hand and the other being left hand, the two Andritz PrimeLine machines are identical. The nominal width of both crescent former machines is 5.6 meters, and they run at 2,000 m/min. The yankee dryer cylinders are 18 ft. dia. stainless steel.

The new PrimeDry steel yankee is made entirely of steel, resulting in greater safety and higher performance due to the elasticity of steel


compared with cast iron. The higher perfor-mance of the steel dryer can be used to save on energy costs by drying more with steam, which generally is relatively cheap.

The TM 1 PrimeLine machine is currently being installed. TM 2 was received in Portland, Maine, at the end of August, and installation will proceed through to startup set for the second quarter of 2016. The machines will make 90 in. dia. parent rolls for shipment to the company’s converter customers.

The new building complex will include a warehouse section for parent roll storage, and in addition, the mill has arrangements for near-by, off-site warehousing, “down the street.”

The addition of tissue converting capacity at the mill was discussed and looked at, Richard says. “It’s not off the table for the future. But geographically, we are in a somewhat tough position for converting.”

EMPLOYEE TRAINING/STAFFING

Richard says that working with Washington County Community College (WCCC) has been extremely helpful in developing the workforce for St Croix. “After confirming that this proj-ect was definitely going to happen, we began working with the college to help us get the training put together,” he notes. “We worked with them to tailor basically a nine-month cur-riculum — two semesters worth of courses. We

started with a general pulp and paper course and followed that up with a tailored papermak-ing/tissue making course based on fundamen-tal programs that were being conducted at Kennebec Valley Community College (KVCC) in Fairfield, Maine, which offers a pulp and paper program with an associate degree. We took the fundamentals of those KVCC courses and supplemented in some basics in math, chemistry, etc., as refreshers.

“The course went very well. We put 40 people through it. A few were lost along the duration of the course, and a few more didn’t make it through the selection process. The balance is made up of local people, some who have worked with mills that are now closed — Bucksport, Millinocket, etc. We picked up some really good people, who all started this past August 31, including all maintenance and operations workers,” Richard explains.

The mill on-site training program began on the first day of employment for most workers — August 31. This program is running for 16-20 weeks, and involves more specific vendor and actual operator training. When the first tissue machine starts up in the first quarter of 2016, the full crew for two machines will be focused on just TM 1. The experience they acquire in bringing TM 1 online will then be applied to an even more efficient startup of TM 2 in the second quarter.

“The WCCC program was a huge help,” Richard adds. “It really gave us a jump start in the right direction.”

In addition to hiring employees through the training programs, St. Croix also hired experi-enced mill workers from recently closed paper mills at Bucksport, Millinocket, and other towns in Maine. “These people have had a tough time with the closure of those mills, and they have a lot of enthusiasm, like we do, seeing something new going up and the long-term opportunities it offers,” Richard says, adding, “We have four people with extensive tissue-making experience. With this kind of investment, we’ve been able to attract some really talented people to our team.”

L’Italien adds, “We’re going to have high technology, state-of-the-art tissue machines, and we’re looking to have a state-of-the-art high performance workforce. Not a lot of our employees are going to have extensive tissue background experience, but we have fantastic training, and we have some very strong tissue makers on our staff.

“Our employees who have been through the WCCC training programs and are still in our on-site program will be trained to not only operate the machines, but also to maintain them. When both machines are fully operational, I think this is going to be a real showcase mill and I feel very fortunate to be a part of it. I really look forward to seeing it evolve,” L’Italien says.


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Resolute’s Tissue Announcement a Sign of the Future in Tissue?Company’s investment in a new tissue machine at Calhoun, Tennessee, mill could be a big step toward commoditization of the North American premium tissue market

MATT ELHARDT, FISHER INTERNATIONAL

Recently, Resolute Forest Products, Montréal, Quebec, Canada, announced the investment of $270 million for a new tissue machine and converting facilities at its Calhoun, Tennessee, USA, mill. While new capacity in tissue is not unexpected (the grade essentially grows with population in developed economies), Resolute’s announce-ment could be viewed as a significant step toward the potential (some may say, eventual) commoditization of the North American premium tissue market.

We’ll examine two drivers of this trend:• Advanced tissue making technologies are now available to new players

(including low-cost integrated mills)• Private labels continue to grow their share of the market.

ADVANCED TISSUE MANUFACTURING NO

LONGER A BARRIER TO ENTRY?

Tissue machine technology can be grouped into two general categories — advanced and conventional. Advanced technologies (TAD, UCTAD, ATMOS, NTT, etc.) use a structured forming process that results in a bulkier sheet at the reel versus conventional wet-pressing (CWP) meth-ods. Generally, this results in higher product performance characteristics at a lower fiber cost.

Conventional machines can make up this shortfall at the converting stage, for example, by adding plies and embossing to reach the desired per-formance levels. However, they must do so at higher fiber and converting

cost, which normally exceeds the higher energy requirements of using advanced technologies. This concept is illustrated in Figure 1.

Using additional fiber to meet customer requirements is a work-able strategy so long as a mill has access to low-cost fiber. In North America, fiber costs for T&T mills can vary widely, as show in the cost benchmarking chart from FisherSolve™ (Figure 2). In the chart, a clear difference in fiber costs can be seen in those mills that purchase market

pulp (the red bars), and those that predominantly use recycled fiber or pulp manufactured on site (the green bars).

But remember, advanced machine technology can offset the fiber advantage as desirable product characteristics are met with less fiber weight for the same case of product. In Figure 3, the Stat Case cost curve


brand surely has a significant, if not majority, share of those sales. Will private label continue to grow?

Why shouldn’t it? As long as customers can get the product character-istics they want at lower prices, they ought to switch. Consider that the switching has apparently occurred with very little marketing dollars to overcome the brand equity of incumbents. (When was the last time you saw a commercial on television for Kirkland brand tissue?) One could even argue that penetration has been slowed by the limited availability of low-cost, integrated mills with advanced technologies.

However, new T&T machines are increasingly of the advanced-tech-nology category (as shown in Figure 6), in part because of expiration of patents and the development of new processes that are being marketed to every tissue company by the major machine builders. After all, use of private label brands has long been a standard in Europe, where they have greater than 60 percent share of the marketplace.

As advanced T&T manufacturing technologies become the norm, and as the decline of printing and writing (P&W) paper grades frees up more low-cost pulping capacity, will Resolute’s announcement become the “new normal” in tissue? If it does, branded T&T products are apt to see more pressure in the years to come. Compounding this threat, research by Mintel2

suggests that millennials (the generation of young, working adults, some 90 million strong in the U.S.) show the least loyalty to branded tissue products. The future reality of higher-quality and even lower cost tissue is sure to raise the stakes for branded producers of T&T in North America.

Matt Elhardt is VP Business Development, Fisher International, Norwalk, Conn., USA. Contact Matt at [email protected] or 203-854-5390.

1. www.cbsnews.com/media/12-things-about-costco-that-may-surprise-you/2. www.tissueworldmagazine.com/september-october-2014/

private-label-vs-brands-latest-trends-and-developments/

Stat Case Cost BenchmarkingStat case costs are modeled in FisherSolveTM. This new func-tionality lets you perform T&T cost benchmarking analysis by equipment type (advanced versus conventional technology).

Using stat case for benchmarking creates true parity for mill- and machine-manufacturing costs, resulting in more reliable cost curves and more meaningful comparisons.

FisherSolve is unique in its ability to perform this analysis because its equipment, production, and cost data are integrated.

from FisherSolve — with the vertical axis representing tissue and towel case costs NOT per ton costs — demonstrates this point.

(See sidebar for a review of statistical case benchmarking.) Advanced technology machines that are purchasing pulp (circled in Figure 3) can be competitive on the cost curve as compared with integrated conventional machines.

Note something about this analysis — the lowest cost advanced technology machines are those at integrated mill sites. This analysis becomes even clearer if we look only at stat case costs for consumer bath tissue in North America (Figure 4). It is clear that the lowest cost

of production for advanced technologies is at integrated mills, with a cost advantage of about $5 per case.

Costs might not be all that matter, you say — after all, consumers have their brand preferences. The industry has thrived under a “house of brands” strategy, whereby major producers are able to meet consumer segment needs with varying products. Marketing messaging is then used to reinforce each product’s positioning (e.g., “value” for economy tissue

and “extra soft” for ultra-premium) with prices that are typically higher for the highest quality brands (Figure 5).

But what happens if everybody is able to get a good product at a lower price?

ENTER PRIVATE LABEL

Private label (think Costco or Wal-Mart) brands had 18 percent of the North American tissue and towel (T&T) market in 2003. Now, more than 10 years later, that number is closer to 28 percent. Today, toilet paper is reported as Costco’s top selling product1, and its Kirkland private label


feature

A Century of Tissue: Career Experts Explore Past, FutureThree tissue veterans examine developments, events, direction of industry

KEN PATRICK

GEORGE HARTMANNGeorge Hartmann, beginning in 1964, spent the first 10 years of his career with the old Marathon Corp., then a division of American Can Co., in tissue sales and marketing. He moved eight times, living all over the country, which gave him an in-depth geographic understanding of different markets and how things work. He left American Can in 1974 and went with Bay West Paper, which became Mosinee, and is now Wausau Paper and Tissue. In 1981 he left Bay West and spent the balance of his career with Fort Howard, which became Fort James after the merger with James River in 1997, which most recently was acquired by Georgia-Pacific/Koch Industries. During his final five years with G-P, Hartmann ran the company’s North American Commercial Away from Home business.

It’s difficult to look over the past century of tissue making, especially its first 50-60 years, and track progress step by step. However, there were some notable developments from which modern tissue technology evolved. The process of creping, for example, is said to have been invented in Germany during World War II to make fill-ing for ammunition shells, and some nurses also used this material to cleanse wounds. Reportedly, Kimberly-Clark brought this technology from Germany to the U.S.

Having been “invented” (sort of) by the Chinese some 3,000 years earlier, tissue making on a commercial scale got underway in the U.S. at the close of the 19th Century. Interestingly, the Chinese around that time also were adding perfume to tissue, which is something fairly recent in today’s world.

A U.S. patent was granted in 1871 for perforated papers to be used as a type of sanitary paper, and about that time Scott Paper was the first to put “TP” on a roll. The first facial tissue in America was introduced by Kimberly-Clark in 1924, as a means to remove cold cream, and K-C’s Kleenex brand over the years has become a generic name for facial tissues.

From then until the middle of the twen-tieth century, sanitary tissue seems to have been stuck in the muck, with little if any-thing happening. Then in the mid-1960s a new approach to tissue emerged in the U.S., with a new face and an unforgettably irritat-ing character to go with it—Mr. Whipple. Admonishing grocery store shopper-house-wives and television audiences nationwide with his “please don’t squeeze the Charmin” command, Mr. Whipple was with us daily from 1964 to 1985.

Mr. Whipple’s beloved Charmin, made with an early version of a new type of tissue former known as a crescent former, began an era of improved quality tissue products, followed by other processes such as thru-air-dried (TAD) technology. TAD was patented by Charmin in 1973, but only during the past decade or so, some years following expiration of the original patents, has TAD technology set real roots in the industry.

To discuss some of these issues from a first-hand perspective, Tissue360° maga-zine recently met with three career tissue experts, to look more closely at what actu-ally happened in the tissue industry from the mid-twentieth century (Mr. Whipple’s time), when they first entered it, to today and going forward globally.

George Hartmann, who started in the industry in 1964, spent his entire career in the industry until he retired in 2002. Bill Sleeper started in the packaging sec-tor of the industry in 1969, later switching over to the tissue side where he spent the final 15 or so years of his career, retiring in

2012. Wlad Janssen, who was with Kruger for many years until five years ago when he became a consultant to the industry, looks more globally at future directions the tissue industry likely will take.

GEORGE HARTMANN PERSPECTIVE

A couple of things “strike me during my career in the tissue industry,” Hartmann notes. “Certainly the mergers, the consolida-tions of assets in the tissue industry, both in the at-home (AH) and the away-from-home (AfH) side were, in my mind, the key issue during the time I was in the business. The number of companies in the business when I started, compared with the number who were in control of the business when I ended, was night and day. The industry had become very, very consolidated.

“One of the things I find interesting about the G-P/Koch approach, is that they have given up significant market share in the AfH business in exchange for huge gains in prof-itability. This is a very interesting approach that other companies in the industry also


have used. During my tenure in the busi-ness, we literally ‘killed’ for market share points. That was our driving thing—go for market share. And of course Fort Howard during all of those years was the low cost producer, so we had the capability of driving for market share, providing an acceptable quality product at a competitive price. And that strategy worked. We had a preemptive strategy in terms of growing the tissue busi-ness—meaning that our competitors knew that we were the low cost producers, and so when we announced a paper machine, everybody else put their plans on the shelf. They weren’t going to fight this low cost producer. So we were in their faces, putting up paper machines like crazy, and as a result, grew market share dramatically.

“Now, fast forward to G-P’s acquisition of what was Fort James in the year 2000. They asked the question: “how can we use this market share to create incremental profit-ability?’ So they went into value-added types of products, and they did a really great job with dispensing systems such as the enMo-tion cabinet that started during my tenure. And they were able to get a value added price for their tissue product because they combined it with a very unique dispensing system that provided a value to the end user and, of course, a significant profitability to the distributor. So that really worked.”

Hartmann continued by pointing out that, as somewhat typical of moves by other consolidated tissue producers, G-P was able to make significant profitability gains at the Broadway (Green Bay, Wis.) mill of Fort Howard, which at one time was the largest tissue mill in the world in terms of total production. “The Broadway mill at that time employed 4,500 people, and G-P eliminated over a period of about five years a thousand jobs there. They then invested dramatic amounts of capital, and have improved the profitability return by several points. It’s a remarkable story. That has turned out to be the most profitable tissue operation that exists, that I know of. And they did it all through automation and reducing head count.

“What’s also interesting and part of an overall, general trend in the industry I think, G-P then gave birth to a whole new support industry in Green Bay of smaller converters—people who did not make paper but who took

the paper that G-P made and made products for them that were not of the volume that G-P could invest in. These converters who were not paying the $25 - $30 per hour in wages and benefits to their people picked up this business, and G-P was very happy with that. Because their customers wanted those prod-ucts, they had to sell and deliver them, but without making them. To me, this is a very interesting trend that’s happened in many geographical areas of the tissue industry.”

Hartmann says the birth of these convert-ers is one of the most significant changes he’s seen in the past 10-15 years in the tis-sue industry. Kimberly-Clark is doing it, as is Proctor & Gamble, G-P, SCA—all of the big players. “It’s a perfect setup for the converters, and a ton of them have been given new life over the past 20 years in the tissue industry. It’s a whole new world in the business,” he adds.

One other big development that is now impacting the North American industry especially, according to Hartmann, “is this whole change in technology—the TAD thing—the ability to get end-product attri-butes while putting much less fiber in the products. That’s a huge issue. Obviously fiber, whether it’s recycled or virgin, is a key component of the overall costs per ton of tissue. If you get a lighter sheet that gives you the same or better end product attributes that a heavier sheet gives you—if you can put much less fiber into it—that’s a huge opportunity for profitability, even with the increased energy that TAD pro-cesses involve.

“The evolution to more energy efficient TAD-like structured processes is overcom-ing the energy drawbacks of the process. We were always trying to take a 30 lb. towel down to a 29.5 lb. towel—just anything to get fiber out of it but not give up the end product attributes. But, of course if your customers won’t buy it because it doesn’t perform, obviously it doesn’t do any good. But with TAD technology, that is possible. The case weights went from like 32 lb. for a case of 4,000 paper towels down to some-thing like 25 or 24 lb. But it didn’t matter as long as the product performed. And it did. That trend has been a huge game changer in the industry. It did take a lot of capital dollars. You don’t build or convert a tissue machine to TAD for nothing.”

On the distribution side, the significant gains in market share by food service distrib-utors like Sysco and club warehouse organi-zations like Sam’s and Costco have happened at the expense of the traditional paper dis-tributor. These channels of distribution have done an excellent job in marketing towels, bath tissue, and napkins to both the at home and away from home customer base, Hartmann explains. Distribution incen-tive plans based on total volume objectives and product mix objectives helped drive this change. Many times a portion of these incentives were passed on to the end user customer as well, he adds.

BILL SLEEPER VIEWPOINT

Sleeper, talking mainly about the AfH sec-tor, categorizes developments in the tissue industry into five basic arenas—technology, format, distribution, environmental, and health awareness/wellness issues, the lat-ter two being what he calls “megatrends.” On the technology side, fiber usage, in par-ticular, has changed a lot over the years, he notes.

“As I understand it, Fort Howard was the first major company to use recycled fiber and develop products from it that would be satisfactory in the sanitary tissue and towel market. At that time, the use of recy-cled fiber was driven mainly by econom-ics rather than environmental concerns,” Sleeper explains. Noting that he is not sure what types of fibers might have been used in the first half of the twentieth century, he says that moving into the second half, it was both hardwoods and softwoods, and a blend of both to give smoothness and softness as well as strength properties.

In regard to technology, Sleeper points out that paper machines used to be six to eight feet wide, and over time bigger became better. “Today we have 10-meter-wide machines. Where in the earlier years we might have had three or four people operat-ing a six-foot-wide machine, today we have five or six people operating a 10-meter machine, with closed loop process control giving much improved consistency of prod-ucts and much faster operating speeds—6,000-plus fpm,” he says.

“Environmental cleanup of rivers and streams and odor and other emissions became one of the biggest achievements in


the environmental megatrend—one that society as a whole insisted upon. I grew up in Maine, and I remember the Penobscot River had a lot of paper mills on it. The mill in Old Town used the sulfur bleaching process, and you definitely knew when the wind was blowing in the wrong direction. Homes on the East Edington side of the river couldn’t keep paint on them because of the emissions. Below Old Town is Bangor, which had a big hydroelectric plant on the river. Below that was what was known as the Bangor Salmon Pools. The first salmon that was caught out of that pool was sent to the U.S. president for his dinner. But with the impact of the paper mills, that ceased to happen. But the environmental tide, so to speak, shifted over time, and today the Penobscot River is running clean and healthy, and salmon are swimming in the pools again.

On the format side, the sizing of tissue rolls, folded products, etc. for the AfH sec-tor has for some time been related to the dispensing part of the equation, “because if you’re making product, users need to get it out of something. If that works well, you have a happy tissue experience and if it doesn’t, you have a very unhappy tissue experience,” Sleeper says.

In regard to dispensers, paper towels over time became larger, with rolls hav-ing 350 ft. on them to start, then gradually increasing to a thousand feet of product today, he explains. In the folded area, the single fold towel was the earliest and most simple, and then came the multi-fold and the C-fold with its benefits of a smaller foot-print from a dispenser viewpoint. These evolutions all lead to efficiencies of distri-bution and labor, in terms of maintaining the rolls, etc.

“Originally, towels were one-ply, and to increase absorbency some producers added two-ply towels to their portfolio. The folded towels would be used in hotels, class A office buildings, restaurants, etc. Roll towels were considered more industrial,” Sleeper notes.

“In the towel arena, one of the big changes that took place was when G-P introduced its enMotion dispenser toweling about the year 2000, which George mentioned. This had two dimensions. One, it was made with a structured sheet, similar to TAD. With the wave of your hand you would get one

structured sheet of toweling that would dry your hands rather than the two, three, or four paper towels that you would normally use. The quality of the towel was great, and the “touchless” dispenser built on the mega-trend of health awareness.

“Since roll towels and associated dis-pensers were traditionally seen as types used in gas stations, warehouses, manu-facturing locations, etc., it was difficult at first to get them accepted in Class A office buildings, hotels, etc. But developing the touchless dispenser in an attractive stain-less steel casing helped get them into these buildings. It came to the industry provid-ing a quality product, a hygienic quality of dispensing, and an effective cost-in-use. Even though it cost more per towel than the folded towels, you used much less, and the office building would end up saving money,” Sleeper says.

Another big format change follow-ing that was Fort James’ introduction of its compact coreless tissue, a technology where the roll did not require a core. The dispensing system was designed as a twin-roll dispenser. The second roll couldn’t be used until the first one had been consumed, Sleeper explains, adding that “you could end up with 2,000 ft. on two small rolls. That took the idea of wanting high capacity into the preferred format of a perforated sheet. Even though that tissue wasn’t the quality of ‘at-home’ products, it was sufficiently soft, and the dispenser took up less room in the restroom.”

Distribution of tissue products in the AfH market, Sleeper points out, used to

be almost fully through the janitorial sani-tation supply distributors, who were the ones distributing mops, brooms, clean-ing equipment, etc., to the restrooms, or were later also handled by the food service distributors, which were delivering into restaurants. He explains that as the desires of the consumers changed and led to the rise of the club stores, that became another outlet, so that restaurants that were buying their food at Sam’s and Costco could also pick up their tissue and toweling supplies at the same time. That was followed by office product companies trying to supply the full line of products to office build-ings, the industrial distributors like Office Depot and Staples, and companies such as Grainger in the industrial area.

WLAD JANSSEN: LOOKING FORWARD

In looking at the global tissue industry, Janssen prefers to focus on the future rather than on the past. “I’m pretty well convinced that what has happened in the past is not going to determine the future of this indus-try, especially on a global basis,” he says.

In recent years, there have been notable technology developments such as the shift to premium products and the installation of TAD machines in the U.S., Janssen points out. “This has been a very special era, if you like, but I personally don’t think it will continue. What I think will happen in the future has very little if anything to do with what happened in the past.”

There is a big difference between today’s tissue industry in North America and that in the rest of the world, Janssen continues.

BILL SLEEPERBill Sleeper joined American Can Co. in 1969 as financial analyst on the packaging side, and was there when James River acquired the forest product group (Fort Howard) of American Can, forming Fort James. He went with Fort James in the industrial engineering materials area, involved in transferring technology from Fort Howard to the James River facilities. When Fort James acquired the Groveton Group, Sleeper became director of product development at the Groveton, N.H., mill, and later became Groveton mill manager for two years. He subsequently managed the western part of the company’s converting papers busi-ness. After Fort James moved its headquarters to Deerfield, Ill, Sleeper became director of product development for the AfH tissue business, subsequently becoming director of a towel category, a role he was in

when Georgia-Pacific acquired Fort James in 2000. He then came to Atlanta as VP of marketing for the Washroom and Wiper Solutions Business for the North American AfH division of G-P, later becoming president of that business until retirement in 2012.


“If I look at what’s going on in Canada, for example, and then go to a place, say Turkey, which is a growing Middle Eastern country, I see a very different situation. If you look at what they do with tissue in Turkey and the equipment they have and the machines they’ve installed, it’s a quite amazing story.

In North America, Janssen sees the TAD trend probably “reaching its end” at some point. “There are a couple or more new TAD machines still in the pipeline, but I see TAD running its course in the near future, fol-lowed by shifts to ATMOS, NTT, eTAD, etc., which he says are basically wet-shaping tech-nologies that try to minimize the thru air drying part.

“In the past, the North American tissue industry had many old machines and there was some consolidation and shifting of assets. But more recently, there is continu-ing consolidation and a global movement to more quality private label. In this regard, the U.S. is behind other places in the world. The high level quality gap is being reduced, and I believe, going forward, there will be more of a movement toward high quality private label. The U.S. is behind this trend compared with other countries.

“The really interesting side of today’s and tomorrow’s tissue industry is what’s happening elsewhere in the world. Tissue industry figures on China, for example are staggering,” Janssen point out. “A recent study done by RISI on producing facilities in China was just trying to find out how many tissue mills there are, and where they are located. The researchers found that there probably are 200 or so tissue mills in China, but they could actually locate only some 100 of them. The number of new machines planned or currently being installed in China is also staggering.”

On the use of virgin rather than recycled fiber in tissue products in China and else-where, Janssen says that people today tend to focus on sustainability and what they think is good for the environment, but don’t nec-essarily consider or understand the overall situation. “Consider what’s being done in Brazil in regard to plantations,” he says. “This certainly looks to be sustainable. Is it good for the environment? That’s not really the question. You take carbon dioxide out of the air and you grow fiber. It’s a complex situation, and I think there is a tendency for

the public to simplify it to a point where the truth is lost.

“For instance, recycling can be thought to be universally good and, by extension, building deinking plants. What many peo-ple don’t realize, however, is that deinking plants produce sludge, and that sludge can concentrate heavy metals, etc. In disposing of the sludge, we may actually concentrate some undesirable things in places where we really don’t want them. This is not always so clear to the public, which is very susceptible to marketing. If you market recycling, then people will go for it—often without knowing the details,” Janssen points out.

Statistics, especially in regard to tissue production and use, can be very “amazing” on a larger scale, Janssen notes. “For exam-ple, people in North America use 23-24 kilos (about 51 lb.) of tissue per person per year. If the whole world would consume tissue at that level, we would need several planets the size of Earth just to supply the fiber you would need. Obviously, there are definite limits to growth, and we all have to realize that limits exist.”

Generally, the marketplace itself drives the direction of tissue development and production. In this regard, Janssen sees the U.S. being in a different position than Europe and other parts of the world. In the U.S., he says, there are several brand-leading products from the “big four” (K-C, P&G, G-P, SCA), for example, that more or less set the pace for the others. The big four are generally the only ones that actively work on technology development. They have their own R&D groups, private pilot machines,

WLAD JANSSENWlad Janssen started his career in R&D in various areas (airbags, explosives, specialty equipment) before ending up in the paper area with Domtar. From there, he moved to Kruger Inc. and spent, after a short involvement with newsprint, more than 25 years in the tissue industry, beginning with the Kruger South America mills. After South America, he went to the U.K. and then came back to Canada and joined the acquisition team of Kruger at its head office in Montreal. Kruger then bought the mill in Memphis, Tenn., and subsequently acquired Scott Paper Canada, later changed to Kruger Products, which Janssen joined and where he remained until about five years ago. After that he went into consulting, where he is still active today. His clients are in North America, Latin America, Europe, and Asia, where he travels to

help conduct trials with new developments. “If someone had predicted years ago that I would be an expert in toilet paper, I would have broken into laughter,” he says. “But actually it’s a dynamic business that I very much enjoy, with lots of changes and most importantly growth.”

etc. If you go past the big four, you enter the second tier, which relies more on whatever suppliers can deliver. On the converting side, it’s generally the same situation.

“So, in reality, all of the second tier companies in North America are targeting these drum-beating products from the big four. And all of the big four producers not only have excellent products, but are also known for their marketing expertise. The North American consumer is subjected to the promotion of these products, and they can also see, for instance, that Bounty and Charmin and Kleenex are genuinely high quality products. And the only way to make a Charmin-like product, or a Bounty, is using TAD, at this moment in time. So that’s a special situation in North America—where the first and second tier producers are using TAD and/or TAD-like structured technologies to produce premium products for the marketplace.”

In Europe, it’s been quite different, Janssen notes. “First of all, in Europe there are many markets. The U.K. is quite different from the German market or the French market, or Scandinavia. For instance in the U.K., there is a demand for strength combined with soft-ness, and tissue in pastel colors to match col-ors in the surroundings, while in Germany the emphasis is on strength and price. Strength requirements in North America are lower, and there is more emphasis on wet strength, and in toilet tissue, especially on temporary wet strength. Private label pen-etration is much higher than in the U.S. or North America in general, and the products are of lower quality, he adds.


North American Tissue Investments on the RisePrivate label growth, pulp integration, energy, converting expansion among key drivers

feature

Table 1. North American tissue paper machines.

This exclusive Tissue360° mag-azine report by Pöyry reviews investment activity highlights and discusses various projects that have been publicized in differ-ent parts of the tissue supply and value chain, covering pulp, tissue making, converting, distribution, and marketing.

Specifically, this report reviews tissue paper manufacturing, converting, dis-tribution centers, marketing and promo-tion, M&A activities and implications/key takeaways.

TISSUE PAPER MANUFACTURING

The drivers for investments can be grouped into different categories, including geo-graphic expansion, capacity replacements,

market growth, and backward integration, to mention a few. For example, regional expansion has played a role for Cascades as the company solidifies its position in the North American West Coast by converting an uncoated freesheet machine to produce tissue paper. Orchids is closing two small tissue paper machines at its mill in Pryor, Okla., and starting a new larger scale one based on conventional technology.

Private label growth, and especially the demand for high end products that combine increased softness and performance, con-tinues to justify investments for premium tissue producers, especially in the U.S. South (e.g., First Quality). Backward integration to pulp—virgin or recovered—is a key element

for low cost manufacturing, and especially prevalent in the away-from-home (AfH) segment. Along those lines, we are seeing investments in former market deinked pulp mills (like VonDrehle).

For 2015 and onward, more capital will go to projects that are built around leverag-ing integrated pulp (St.Croix in Bailyeville, Maine) or expanding within existing sites that have adequate room for installing new tissue machines (First Quality, P&G).

Where are the investments taking place? For the time being, the U.S. South and East are regions with growing tissue output and, to a lesser extent, the Midwest and West (see Figure 1). The U.S. South continues to be a hub serving the regions to the west and north that are short on “local” tissue. It is impor-tant to highlight that the upcoming tissue capacity will further strengthen the position of the South region as the largest and newest asset base region in North America.

Also worth noting is that the listed tis-sue machine capacity additions are mainly for the At-Home (AH) segment and, when comparing the technology choices between 2013 and 2014, contrary to last year, the TAD investments are now second to con-ventional PMs.

As part of continued efforts to reduce costs at the mill level, tissue producers are also allocating capital into energy projects. A bold move in this direction was P&G’s $50 million investment in a co-generation project at its Mehoopany site in Pennsylvania. This investment not only made the site energy self-sufficient, but it also generated enough excess electricity to power approxi-mately 20,000 homes for sale back into the local grid. In addition, Lincoln Paper and


Tissue is retrofitting its pulping handling and refining process with more modern and energy efficient equipment (total project cost of $8 million).

CONVERTING INVESTMENTS

In addition to tissue mill investments, we are seeing independent converters continue to expand their operations as well. An exam-ple of a sizable investment is by Green Bay Converting ($48 million) in Hattiesburg, Miss., who is expanding and building a new site that will convert paper towels and bath tissue.

Another example is Golden National Tissue, which will invest $13 million to upgrade a facility in Hagerstown, Md., (a former Boat USA building) to support the expansion of the business.

DISTRIBUTION CENTERS

Proximity to customers is important, and select major tissue companies are also invest-ing in increased efficiencies in product dis-tribution. Most notably, P&G announced plans to open six new distributions centers strategically closer to population centers and major transportation networks.

For example, Proctor and Gamble plans to open this fall a 1.7 million sq. ft. warehouse in Franklin County, Pa., and a 1 million sq. ft. multi-category facility in Union, Ohio ($89 million project opening in 2015).

MARKETING AND PROMOTION

Brands are essential and continue to lead in market share in the AH segment. Marketing spending is essentially equivalent to new tis-sue machine investment: in the case of well-known brands in bath tissue and kitchen towels, the spend is $70-$90 million per year.

Figure 1. North American New tissue capacity (2013 and Beyond). Figure 2. North American tissue industry—top 20 producers.

Several major U.S. retailers, includ-ing Kroger, Supervalu, and Walmart have improved and upgraded their store-branded bath tissue (premium, ultra-premium, plies, TAD) and this move is aligned with the retail-ers’ goal to broaden their private-label offer-ing with a premium, more-profitable product. Moreover, Costco says that its Kirkland brand bathroom tissue is its top-selling single item, with yearly sales of $500 million.

M&A ACTIVITIES

Differently than in printing and writing and in containerboard grades, where merger and acquisition (M&A) activities have been an important element of industry consolida-tion, Tissue companies have been utilizing M&A for further supply chain integration and market share growth. Most recently, Kruger expanded its tissue converting capa-bilities by acquiring Metro Tissue converting assets (C$23 million). Georgia-Pacific fur-ther strengthened its position in the food-service related segment by acquiring SPG holdings—converting plants (in Wisconsin and Mississippi) and a relatively modern tissue mill in Augusta, Ga.

Additionally, von Drehle acquired Mississippi River Pulp’s Natchez facility, back-ward integrating into deinked pulp and with plans to build the first NTT tissue machine in North America. Orchids Paper Products has established a strategic alliance with Fabrica de Papel San Francisco, a premium tissue manu-facturer in Mexico, enhancing the company’s offering and expanding its market share in the western U.S. ($37 million).

Additionally, a few private equity firms are starting to penetrate the tissue segment. Recent private equity activities include Peak

Rock Capital acquiring Atlas Paper Mills and Accurate Paper Recycling in Florida. Access to raw materials is essential, as shown with this move. Atlas Holdings (owner of Soundview Paper) acquired Putney Paper Co. (Vermont), which focuses on converting.

IMPLICATIONS/KEY TAKEAWAYS

It is evident that despite the significant investment in paper machines, tissue com-panies are also investing in other segments of the supply chain. Once new capacity invest-ments ramp up production, and demand catches up to supply, it will be interesting to see if future investment will be less focused on capacity addition, and instead be support-ing industry consolidation and also target-ing continued gains in efficiency and cost reduction in processes occurring before (e.g. fiber, pulping) and after (e.g. converting, distribution, marketing) the paper machine.

ABOUT PÖYRY

Pöyry’s Strategy Consulting practice special-izes in the pulp, paper, packaging, hygiene, and bioenergy industries and provides services that focus on driving real value through an integrated approach to improv-ing business strategy and operations. The Pöyry team combines in-depth industry and market knowledge with technical and financial analysis expertise to better prepare clients to overcome challenges and capitalize on opportunities faced by the forest products and related industries today.

For more information, contact Soile Kilpi, direc-tor ([email protected]), or Patricia Marques, principal ([email protected]), at Pöyry Management Consulting.


WAUSAU PAPER’S ATMOS AT HARRODSBURG: Right Machine for Right Company at the Right TimeFlexibility to swing from conventional to premium using recycled fiber was a perfect fit

KEN PATRICK

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For Wausau Paper’s Harrods-burg, Ky., USA, mill, the new Voith ATMOS (Advanced Tissue Molding System) tissue machine Wausau started up in December 2012 is proving to be the right machine for the right company at the right time. In selecting a new tissue machine for the Harrodsburg facility, which at the time was a 100 percent tissue converting plant, the com-pany first of all needed flexibility to make the range of products it currently was producing, plus supply a structured sheet for the premium lines it wanted to add to its product mix.

“Our scale precludes us from dedi-cating a machine to one product line,” Gary Rudemiller, VP of Operations for

Wausau Paper, explains. “The ATMOS machine afforded us the flexibility to make the substrates necessary to serve multiple product lines.”

Compared with TAD (Thru Air Drying) technology, which was the only other viable approach for structured tissue and towel at the time, ATMOS would allow Wausau Paper to pursue its growth plans involving a spectrum of conventional and premium products, enhancing its green position in the market place. “We’re recognized as the lead-ing supplier of environmentally preferred products in the Away from Home (AfH) tissue marketplace based on the strength of our complete Green Seal™ certified product

offering. And with the ATMOS process, we can, at competitive speeds and competi-tive energy levels, make premium grades with 100 percent recycled fiber,” Rudemiller points out. So, for its process f lexibility and the green platform of Wausau Paper’s growth plan, ATMOS was the right fit for Wausau Paper.

Now, some 20 months after startup, the Wausau team is in the optimization phase of PM 3 (Wausau Paper has two conventional tissue machines—PM 1 and PM 2—at its Middletown, Ohio, mill). The startup curve for PM 3 reflects, in effect, that the mill has had two startups. As Rudemiller notes, “not only did we have to learn a machine that is conventional, but then we also had a second startup—we had to learn how to run the machine in ATMOS mode.”

Switching back and forth between con-ventional and ATMOS modes challenges the effectiveness of the mill’s learning process, Rudemiller continues. “We have to capture and cement our experiences and learnings in place so that when we come back to a given mode of operation, we don’t have to relearn previous experiences. And with the new tech-nology, there have been a lot of learnings. But

PM 3 (viewed from the wet end) has a maximum operating speed of 6,500 fpm and a production capacity of 240 metric tpd.

Gary Rudemiller, VP of Operations, Wausau Paper, Harrodsburg, Ky.


I’ve been very impressed with the ability of our people to separate the wheat from the chaff and formalize key learnings.”

“Our team has dealt very effectively with the foundational building blocks to run the machine, which is prerequisite for proceed-ing with process optimization. We now have the fundamentals in place and under control and we’re now working on that next level, where optimization comes in—the fine-tuning level. The dynamics of our opera-tion today are very different from what they were a year ago, because the foundational blocks are now fully understood and firmly in place.”

ATMOS MACHINE AT HARRODSBURG

PM 3 is 220 in. wide at the reel and has a maximum operating speed of 6,500 fpm and a production capacity of 240 metric tpd. The energy-efficient stock preparation system Voith supplied with PM 3 includes an IntensaPulper and an energy efficient Pluralis refiner disc. The crescent former wet end is equipped with a MasterJet Pro T, one-layer headbox that has a ModuleJet auto-matic dilution system.

The ATMOS module (top) is located between the former and the yankee cylinder. In ATMOS mode, formation is done basically the same way as with a conventional crescent former, but the felt is replaced by a structured fabric known as AtmosMax. This fabric gives

three-dimensional (structured) formation to the sheet and carries the web all the way from the headbox to the yankee cylinder.

A special vacuum roll known as the ATMOS roll, provides maximum dewater-ing. Water is removed mainly by the air-flow (vacuum) and, in addition, is supported by intimate contact between the web and a dewatering fabric known as AtmosFlex installed between the ATMOS roll and the AtmosMax fabric.

As Rudemiller explains, the sheet is made on the forming roll and is brought around to wrap the large (approximately 60 in.) ATMOS vacuum roll. Exhaust air from the yankee dryer hood is applied on the other side of the sheet using the ATMOS steam and air hood. “Forcing hot air through the sheet could, to some extent, be viewed as a mechanism simi-lar to TAD,” Rudemiller notes. “Essentially, you have 500°F air being pulled through the air-permeable fabrics and the sheet.”

Steam & Air hoodWet shaping box Vacuum roll ATMOS press

Yankee

The ATMOS module uses a special suction roll and the ATMOSMax fabric to produce a three-dimensional texture to the sheet. The wet shaping box in front of the ATMOS module intensifies the structuring effect of the AtmosMax fabric by vacuum application. With 500°F air from the steam and air hood being pulled through the air-permeable fabrics and the sheet, the process can be viewed as somewhat similar to TAD.

The crescent former wet end has a MasterJet Pro T, one-layer headbox with a ModuleJet automatic dilution system. In this photo, stock jet is coming out of the headbox (center left) between the breast roll (top) and forming roll (bottom).


Augmenting the vacuum, the AtmosBelt contacts the top of the AtmosMax fabric, cre-ating a really long nip with its extended wrap on the vacuum roll, Rudemiller continues. “It’s a low intensity ‘nip’ extended around the roll’s face, squeezing the sheet over a very large portion of the roll surface.”

The wet shaping box in front of the ATMOS module intensifies the structuring effect of the AtmosMax fabric by vacuum application. The Harrodsburg machine has one press. During web transfer to the yankee cylinder by a press roll, the AtmosMax fabric struc-ture minimizes sheet compression to allow premium quality tissue. Procedures for changing the technology between conven-tional to ATMOS modes are described in the “Switching from Conventional to ATMOS Mode” sidebox section below.

The 18-ft.-dia. cast iron yankee dryer has a high performance, 900°F hood system. Ensuring perfect sheet transfer and uniform

adhesion to the yankee cylinder surface, and for fine-tuned creping control with optimal runnability, Voith and Buckman Laboratories, Memphis, Tenn., developed Magnos coating chemicals specifically for the ATMOS.

Voith also supplied the complete automa-tion system for PM 3 (MCS, DCS, and QCS), the vacuum system, and the EcoChange and Mastercut reel spool change and web slitting systems. It also supplied the MasterReel with independent primary and secondary arms operations for high efficiency reeling.

Prior to the installation of PM 3, the Harrodsburg operation was a converting-only facility, and today produces essentially all of the company’s converted products utilizing parent rolls from PM 3 and the company’s Middletown mill, which has its own deinking plant. The two conventional machines at Middletown are a wet crepe towel machine that runs at world class speeds and

SWITCHING FROM CONVENTIONAL TO ATMOS MODEIn an operating mode change with PM 3 (from conventional to ATMOS mode and vice versa), Rudemiller says that the “critical path” goes through the transfer press and the clothing. Going onto conventional, a suction roll is installed in the transfer position. Then when going onto ATMOS mode, a solid roll is installed. “The clothing is removed, the roll is changed, the new clothing is installed, and then the machine is started up. This changeover takes on the average about 18 hours. We incorporate this infrequent changeover into scheduled maintenance outages. We coordinate our maintenance schedules and the technology change.”

The mill started its growth curve with a certain volume of premium products. Over time, that’s been growing and will continue to grow. At some point, PM 3 will produce only structured products, Rudemiller says. “So we run the volume of our structured substrate in ATMOS mode to enable our sales curve, and the rest of the time we go with conventional. We set up the grade production cycles in blocks, and each successive ATMOS run has increased in length because of how well the market is absorbing Wausau Paper’s premium products. Eventually we will go to 100 percent ATMOS.

a dry crepe tissue machine that also runs at world class speeds. “With the new ATMOS machine at Harrodsburg now, we’re obviously not buying as many parent rolls as we had in the past,” Rudemiller says.

The Harrodsburg facility has modified a number of converting lines to handle the pre-mium substrate from PM 3. So far, according to Rudemiller, Wausau Paper has spent about $220 million for the ATMOS machine and for modifications to some of the converting lines for premium products.

ENERGY/FIBER SAVINGS

According to Voith, the ATMOS machine typically provides a 35 percent energy sav-ings benefit with a structured sheet, i.e., a premium product is made using only 60-65 percent of the energy that TAD typically will use. “And we’re realizing that at Harrodsburg,” Rudemiller says. “Conventional tissue manufacturing,” he adds, “is more energy efficient, because the moisture content of the sheet being trans-ferred to the yankee is lower, i.e., it is a drier sheet. With the structured sheet, the contact with the yankee is not as good, so the heat transfer coefficient might be a bit lower and the sheet won’t be as dry going to the yankee. And that’s where the extra energy consumption comes from for the structured sheet relative to the conventional sheet— the drying against the yankee.

“The TAD process relies on being able to pull hot air through a porous and open sheet. Heating up that air and handling all of that volume consumes considerably energy. So it’s a combination of moisture content of the sheet, structure of the sheet, and the contact area of the yankee, and then the drying mechanism—all of those things come into play with energy consumption. The ATMOS process is more energy efficient

The 18-ft.-dia cast iron yankee dryer has a high performance, 900°F hood system.


than TAD because sheet structure and bulk are achieved without the energy-intensive hot-air system.”

The Harrodsburg ATMOS machine is a one-press machine (transfer press only). At Middletown, the dry crepe machine has two presses. “So at Middletown, we have bet-ter energy efficiency because of the higher level of pressing action and dewatering of the sheet,” Rudemiller explains. “Our energy consumption on conventional grades on PM 3 is in line with what you would expect with a conventional one-press machine.”

The fiber savings with ATMOS comes in with the premium grades versus conven-tional—“higher bulk and better absorptivity with the premium grades, the phenomenon characteristic of any structured sheet,” Rudemiller points out. “This enables better product functional performance with less fiber in the sheet,” he adds.

100% RECYCLED PREMIUM GREEN

Premium green combines the desire for high-quality environmentally sensitive products with a cutting-edge papermaking technology. With Wausau Paper’s longstanding history in green products coupled with its use of ATMOS papermaking technology, 100 per-cent recycled premium green has become a unique product innovation.

The flexibility of the ATMOS process involves the use of carefully chosen struc-tured fabrics to produce premium Green Seal™-certified products in the DublNature® and Artisan™ brands designed for enhanced

performance and appearance. This affords the creation of green towel and tissue prod-ucts with exceptional plushness, brightness, strength, and absorbency, which are ideal for office buildings, lodging establishments, and healthcare facilities.

Allowing the use of 100 percent recycled fibers, this unique form of papermaking is environmentally superior to alternative technologies. With custom designed mold-ing fabrics and the finest quality recycled fibers, exclusive paper grades are created with eligibility for the leading green cer-tification. This technology makes it now possible to design and produce premium quality towel and tissue products for the AfH marketplace while also supporting sustainability.

PRODUCT OFFERING

Currently, PM 3 is lengthening its ATMOS runs. “This is related specifically to the growth rates of our premium products, which are pretty handsome” Rudemiller explains. “We launched our DublNature product six or seven years ago using a near-premium conventional substrate, and it has enjoyed very good growth rates the entire time. Now we’ve introduced premium structured substrates into that product family, and the growth rates are currently more than 30 percent. It’s a little too soon to talk about growth rates with our Artisan premium towel products launched this May,” Rudemiller notes. “Next, our stan-dard grade EcoSoft® Green Seal-certified

product has a long-standing recognized presence in the marketplace. Finally, when we launched it several years ago, the DublSoft sheet was as good a premium sheet as we could make with conventional processes,” he says.

The drivers behind growth of the pre-mium products are the functional/quality attributes that enable exceptional perfor-mance. “When drying your hands with our premium grade DublNature prod-uct, for example, the towel thoroughly absorbs the wetness from your skin. With a conventional towel, you might need to use two or three sheets. One 12-in.-long DublNature premium sheet will dry your hands perfectly well. It has a nice pattern and texture/feel, with good brightness,” Rudemiller says.

Wausau Paper takes its various prod-ucts to market primarily through JanSan distributors, Rudemiller points out. “We partner with JanSan distributors that rec-ognize the value that we bring as a service partner, and also recognize that how they take our product, with its proprietary fea-tures, to the marketplace will benefit them. We’re very selective about distributors. And with the right JanSan distributor, we have a good partnership, or service model, that really allows the growth trajectory to be what it is. So, in addition to the functional and performance attributes, the partner-ing relationship with our distributors is also a driving factor behind our product growth rates.”

This photo shows sheet transfer to the yankee (top cylinder) in conventional mode. The white sheet on the yankee was transferred from the crescent former felt traveling clockwise over the suction roll press (bottom roll) and diagonally out the top right.

Dry end view of PM 3, which is 220 in. wide at the reel. The MasterReel has independent primary and secondary arms operations for high efficiency reeling.


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Healthy European Tissue and Towel Market Driven by Growth in Per Capita ConsumptionIn 2005, 77 mills made 7.4 million mtpy; today, 121 mills make 9.6 million mtpy

This analysis was compiled by Jon Kerr, Sr. Consultant, Fisher International Inc., using Fisher International’s FisherSolve™, a data-driven business intelligence tool that contains a paper industry specific database that accurately describes the capacity of every pulp and paper mill in the world making 50 tpd or more. To learn more, please visit www.fisheri.com.

Europe’s tissue and towel mar-kets have grown nearly 30 percent in nine years—from 7.4 million metric tpy in 2005 to 9.6 million metric tpy in 2014. Population for the region over the same time period was about 750 million, with a flat to slightly declining rate of growth. So growth in tis-sue and towel capacity must be attributed to increased consumption per capita, much or most coming from improvement in eastern European economies.

Such a healthy market has brought quite a bit of merger and acquisition activity as well as new capacity coming online from small, single mill companies looking to participate in the rise in consumption and predictability of pricing that comes from high operating rates (Figure 1).

In 2005, there were 77 firms producing Europe’s tissue and towel, and the market was dominated by four companies: SCA, Georgia-Pacific, Kimberly-Clark, and Metsäliitto Group (now Metsä Group), who together held about half of the continent’s capacity. In 2006, Procter and Gamble sold its five European mills to SCA, amounting to about 250,000 metric tpy. In 2011, G-P exited the market by also selling to SCA and adding another 820,000 metric tpy to the company. These

acquisitions shifted the landscape dramati-cally as SCA’s capacity grew from 1.5 million metric tpy in 2005, to 2.3 million metric tpy in 2014—a 56 percent growth in market share or almost twice the rate of overall growth in the European tissue market over the same time period.

While SCA exercised an aggressive acquisition growth strategy, other top firms opted for slower, more organic growth; K-C, Sofidel, Metsä, and Wepa have all exhibited steady internal growth, bringing on more gradual capacity additions through debottle-necking and/or machine upgrades or even new machines.

In 2005, the 77 European tissue and towel companies made 7.4 million metric tpy. By 2014, 121 companies are making 9.6 million metric tpy. The proliferation of small inde-pendent tissue and towel makers has cre-ated a highly fragmented market (Figure 2). With so many small market shareholders, it is conceivable that as the European popula-tion starts to shrink and tissue consump-tion levels off, smaller, higher-cost mills and those with weaker market positions will shut down. Others may become acquisition targets as the large shareholders fight for a domi-nant position.

The market is still decidedly far from one producer having a market leadership position (30 percent or more market share). There would need to be M&A transactions, new capacity additions, and/or closures of at least 1.9 million metric tons for any single player to achieve market leadership, depending on the types of transactions and who was involved.

Figure 3 clearly shows that a large number of small European tissue and towel firms suffer a disadvantage when compared with the larger, corporately-owned facilities. Figure 3 shows all European tissue companies on the FisherSolve™ Viability Benchmark curve, which measures long-term competitiveness of manufacturing assets. The steep rise in the index of the compa-nies in the fourth production quartile indicates how many firms have a size disadvantage and that will almost certainly be at-risk during a tightening of the region’s tissue market.

The example of SCA in Europe at the time the market was growing is representative of the challenge faced by every player in a growing market: the company had to add 30 percent to its capacity over a nine-year period just to keep its market share from falling. It will be interesting to see how con-solidation in the European tissue market plays out as market growth moderates.

Figure 1. European tissue and towel capacity. Source: FISHERSOLVE™.

Figure 2. European tissue and towel market share. Source: FISHERSOLVE™.

Figure 3. European tissue and towel competitive ranking. Source: FISHERSOLVE™.


Maximizing Yankee Dryer Safety, Reliability, Efficiency Key Goals for Today’s Tissue MillsTAPPI YDS&R Committee members examine yankee cylinder, hood issues

KEN PATRICK

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The yankee dryer section of today’s tissue machines is the product of many decades of evolution, not only to improve product quality and production costs, but to maximize safety and reliability of operations. The latter two are the specific focus of TAPPI’s Yankee Dryer Safety and Reliability (YDS&R) Committee, one of the association’s largest and most dynamic committees that meets several times during the year to review and analyze issues and concerns of particular importance to the tissue making side of the industry.

To discuss some of the more current issues in the world of yankee dryers and hoods, Tissue360o magazine recently met with two members of the YDS&R commit-tee—John Holton, technical director with Jaeger Inc., and Scott Thompson, president of Airtherm Corp.

Discussions with Holton and Thompson explore issues and developments in the yan-kee dryer itself, including the present and future of steel cylinders, internals of the dryer drum, steam box operations, crep-ing blades, and the complete dryer hood assembly. Highlights of these discussions are included below.

STEEL YANKEES

Holton, who has been in the industry for many years including stints with Metso and most recently Albany International, officially opened Jeager’s U.S. office in Vancouver, Wash., on October 1. He says that the U.S. tissue industry has been very

slow to adapt to steel yankee dryers, “which are definitely the way of the future.” The thermal conductivity of steel is very close to that of iron, he points out, but its strength is greater. Thus it can be made thinner. “You get better heat transfer simply because steel is a thinner dryer,” Holton says.

From a safety perspective, steel is not brit-tle, so it won’t catastrophically fail like a cast iron dryer can, Holton notes. “But steel is actually too soft to make tissue,” he adds. “It would wear too quickly with a blade against it. It also has welds, which would cause a non-uniform surface. So all steel dryers have to be thermal sprayed, which turns out to be a good thing because a thermal sprayed dryer gives an extremely uniform surface for tissue making. Cast iron, by its nature, is a non-homogenous material. So it has areas more prone to wear and areas with more or less porosity. Because of that, a thermally sprayed (metalized) coated dryer, like a steel dryer, gives more uniform adhesion characteristics, which is very important in tissue making.”

The subject of steel yankees comes up in almost every TAPPI YDS&R Committee meeting. These cylinders, one member recently pointed out, are made with steel plates rolled into an arc and then welded together. Standard welds create a surface discontinuity, causing stress increases called stress risers, when stressed such as passing through a yankee pressure roll nip.

Because the welds create stress points that can f lex during operation, the group is

not really sure at this time what the service life of a steel yankee might be. On the other hand, several members pointed out, cast iron yankees can stay in service a very long time. Some cast iron yankees, they added, have been in service for more than 50 years.

From discussions during YDS&R com-mittee meetings, most of the committee members generally believe that metallizing (thermal spraying) is putting a hard coat-ing over the entire surface, including the welds, of a steel yankee. It’s mainly applied to increase the wear life, and doesn’t really add any strength to the cylinder. Also, as some members note, normal external visual weld inspection techniques can’t be used with a thermal spray coating. Obviously, they point out, the welds can’t be visually inspected on the outside, because they are covered by the coating. So the only time they can be inspected is when the coatings are ground off. If a good coating lasts 8-10 years, for example, a mill can’t really know what’s going on with the welds at that time.

However, at least one steel yankee manu-facturer reportedly has a promising new inspection technique that can evaluate welds even beneath the metalized surface. The technique does not use radiography, which would have some radioactivity expo-sure concerns, according to one YDS&R Committee member.

YANKEE INTERNALS

In regard to the yankee dryer internals, Holton says there are a lot of things going


on these days, many being related to wear over time. “After about 15 years of continu-ous operation, a yankee dryer’s internals have lost their fit—no matter who made the dryer. In one way or another, through erosion or just the consistent heating and cooling of the dryers, loss of gaskets, etc., the internals have lost their tight fit within the cylinder. There must be a dozen or more potential points of internal leaks.”

This kind of “fit erosion” creates a path for “short cuts” within the dryer, Holton continues. “It takes only a very, very small amount of what we call internal leakage (steam pressure) to initiate this phenomena. The steam is short circuiting to the easiest route, which is a leak in the system, and at that point it doesn’t add to the motive steam required to carry the condensate out,” he explains.

“What happens,” Holton says, “is that over a 15- or 20-year period, you very, very slowly lose efficiency. Anytime you have leakage of pressure—very high velocity steam eroding away at small holes—these areas, over time, slowly grow larger and larger. But it occurs

Although steel yankee cylinders are relatively new to the tissue industry and performance issues, including service life, are still unknown, many in the tissue industry see them as the “way of the future.”

so slowly that operators of the dryers really don’t see it. Often, these condensate systems are not properly inspected because the holes can be difficult to find. You have to know where to look for them, how to test for them, and how to repair them. And most mills cannot do all of the above. There’s lots of places where the systems can leak, and so much is often missed.

“So inefficiency slowly develops and grows inside of the condensate system—almost universally throughout the industry. It manifests itself not only in energy loss, but as profile issues, both in the machine direction and cross direction,” Holton emphasizes.

Yankee dryers normally have four or six headers, Holton continues. “If you have one header that’s not functioning correctly, it compromises the whole system. It creates not only an out-of-roundness of the dryer, but also a once per revolution cold area. And in the cross direction, if the system is not working right, you often get cold areas either on the edges or under the riser pipes. This is very common. Correcting it is an

often unrealized optimization opportunity in tissue making.”

STEAM BOXES

Holton says that, in a way, inspections of the steam box are similar to inspections of the yankee internals. When a steam box is not functioning properly, a thorough inspection needs to be conducted. For example, when inspecting a steam box, you need to make sure that the actuators are functioning cor-rectly with a consistent response across the control range, and that the perforated plates are clean. Again, a very thorough inspection of the steam box should be made periodi-cally by people who know what they’re look-ing for and who can repair problems when the unit is not functioning correctly.

“Unfortunately, some mills, practicing false economies, will continue to run very old steam boxes that have operating prob-lems, when actually they should just be replaced,” Holton emphasizes.

CREPING BLADES

Holton also believes that ceramic creping blades are clearly “the trend of the future.” In particular, ceramic blades and thermal coatings run very well together, he notes. Thermal coatings and ceramic blades used together give excellent blade life, which is most often the No. 1 controllable machine efficiency factor.

“But it’s more than just extended blade life. If you plotted on a Pareto chart all of the time that a sheet is off the reel, for almost every single machine the No. 1 rea-son would be blade changes. And so if you can minimize your blade changes, there’s a tremendous efficiency gain potential. A lot of quality tissue reels in Europe, which got started ahead of us with ceramics, are now running five to seven days on a ceramic blade. Based on what I see, the U.S. market isn’t quite there yet.

“Another key benefit of ceramic blades, in addition to extended life, is extremely uniform bulk and tensile of the sheet. When a steel blade wears, bulk goes up, and tensile goes down. After changing a blade (typically about four hours), tensile goes back up and bulk goes down. When this happens, the mill is sending variable paper to convert-ing, which obviously can cause operating problems. Overall, ceramic blades allow a


mill to run near constant bulk and tensile, which really helps the converting operation when it’s trying to control tension, wrap-pers, density of the roll, etc. They can set up the converting machines and not have to constantly change parameters.”

YANKEE HOOD ISSUES

In regard to the yankee hood, Thompson says that Airtherm is often called in when there is a malfunctioning burner system or a mill has occasional fires, which are always a big issue and often come up in YDS&R Committee discussions. “Nobody wants to have a major fire in the building. There’s been a real surge in dust control systems in and outside of the tissue industry these days, due especially to new NFPA (National Fire Protection Association) standards. And, of course, good housekeeping—keeping the dust accumulation under control—is a criti-cal factor in controlling dust related fires,” he says.

Also a contributing factor to occasional fires, Thompson continues, is the fact that some older yankee hood systems develop hot spots. Most mills, he points out, use thermal cameras, which appeared on the scene about 15 years ago, to locate exactly where hot spots are in the hood and air system.

The yankee dryer itself typically runs at 300°F to 350°F, based on steam pressure, but yankee hoods themselves can push 900°F or higher, Thompson explains. Typically, the older the machine, the more air leaks and exposed metal and degraded insulation. “So most mills today use thermal camera technology to find elevated temperatures in the skin sheets of the hood. They then use that information for more pinpointed inspection to find cracks or, many times, where the insulation has just broken down over time and needs to be replaced.” In recent years, he adds, Airtherm has done a lot of hood rebuild work, replacing degraded insulation or reinsulating the entire hood, as well as adding ceramic insulation, which has a very high R value (measure of thermal resistance).

Because they operate at very high tem-peratures, hoods can develop cracks and leak very hot air, whether they’re new or old. “We got a call recently from one of our YDS&R Committee members who is run-ning an older yankee hood. He wanted to

know if we could come in and do an inspec-tion, because they knew they had leaks, they just didn’t know for sure where they were. In these types of inspections, you’re looking for hot spots, cracks, and expansion joints in the ductwork that have developed cracks over time. We go in, find, and repair them,” Thompson says.

DUCTWORK PROBLEMS

Another major source of yankee hood air leakage, according to Thompson, is around the f lexible ducts, on the back sides of an air cap or hoods. “In the old days, we used dis-connect ducts where the ductwork actually separated from the yankee hood, when the hood retracted. Then all of the mills began switching over to f lexible ducts to allow the hood to retract without breaking loose from the ductwork.

“There have been a lot of different f lex-ible duct designs out there. Some are metal and some are fabric. We have done a lot of business over the years that has involved replacing f lex ducts that haven’t held up well. Depending on the application, some-times we use high-tech fabric material with ceramic insulation built into it. Other times, we use bellows-type metal ducts that allow movement when the hood retracts, while maintaining the air pressure and tempera-ture inside of the ducts,” Thompson says.

CORROSION CONCERNS

Another big issue with yankee hoods is corrosion, Thompson says, “and trying to get a handle on the chemistry around the papermaking process.” Hoods, he points

out, are made out of sheet metal, and many times chlorides are used in the papermaking process that can attack standard materials like 300 series stainless steel, mild steel, or corten steel. During the past 20 to 30 years, there have been developments in different types of duplex stainless steels, and there’s always a little controversy among suppliers as to which stainless steels are better to use and which ones are most cost effective.

“I think it’s a general trend now that everybody uses some kind of special stain-less steel on the wet end section of the hood for both manufacturing internal nozzle boxes as well as the inside and outside skin sheets. We’ve even gone as far as building all of the half-inch-thick side plates in the wet end section out of stainless steel. In the old days, mills would install hoods and hope to get 20 years out of them. Today, mills expect much longer hood life. They fully realize the cost of having to replace the air system and are investing a lot more money up front in special stainless steels to prevent corrosion,” Thompson explains.

The wet end half of the hood obviously has to withstand the wettest environment, he continues. “It’s up next to the press and the wet felts, and thus sees the wettest sheet. The lower toe section of the hood is a prime spot for corrosion. Many times, from that lower toe piece up past the horizontal centerline of the dryer will be fabricated entirely out of stainless steel rather than mild steel or high temperature corten steel. Some of these stainless steels get very expensive, but over the long haul, they’re generally worth the money,” Thompson concludes.

"IF YOU HAVE ONE HEADER THAT'S NOT FUNCTIONING

CORRECTLY , IT COMPROMISES THE WHOLE SYSTEM. IT

CREATES NOT ONLY AN OUT-OF-ROUNDNESS OF THE DRYER,

BUT ALSO A ONCE PER REVOLUTION COLD AREA. AND IN

THE CROSS DIRECTION, IF THE SYSTEM IS NOT WORKING

RIGHT, YOU OFTEN GET COLD AREAS EITHER ON THE EDGES

OR UNDER THE RISER PIPES."

JOHN HOLTON, TECHNICAL DIRECTOR, JAEGER INC.


feature | RECYCLED FIBER

The tissue industry in North America is a major consumer of recovered fiber, espe-cially printing and writing papers, mainly for the away-from-home market. However, certain technologies such as Voith’s ATMOS are designed to produce higher quality tissue and toweling using recycled fiber for both the at-home as well as the away-from-home market, potentially increasing the demand for recovered paper from an already dwindling graphic papers sector.

Coupled with the fact that wastepaper recovery rates in all grade sectors are begin-ning to peak out around the world, the tissue industry, together with the pulp and paper industry as a whole, could be facing a severe recovered fiber shortfall in the not too dis-tant future.

Currently, wastepaper recovery rates in North America are creeping up near 70 per-cent, Europe is approaching 75 percent, and

Japan is nudging 80 percent, already bumping against the ceiling of what can be efficiently and effectively recovered. And with recov-ered fiber demand still rising, a shortage of recycled fiber of all types, not just printing and writing papers, could be looming on the horizon.

The U.S., one of the world’s largest export-ers of recovered fiber with nearly half of its annual recycled paper stream (40 percent-plus) currently being exported, and some 70 percent of that going to one country—China, is especially vulnerable to global fiber dynamics where demand is growing faster than supply.

The hypothetical fiber recovery ceiling differs by country and region, depending on a series of conditions. In the U.S. there is general consensus that the ceiling is, on the average, around 80 percent, though spe-cific grades can vary above or below that. Old

corrugated container (OCC) recovery in the U.S., for example, has already exceeded 90 percent, according to some figures. In Japan with its large urban populations, some see the overall ceiling at 90 percent-plus, while the European ceiling is generally believed to be around 85 percent.

Concerns about a recovered fiber shortage are amplified by the fact that more than half of the world’s paper and board is now being made with recycled fiber. In the U.S., that figure is near 45 percent, and rising. At the same time, the growth rate of global fiber recovery has slowed in recent years as major fiber recovering countries push up nearer the ceiling. Currently, global paper recovery (according to Pöyry data) is at 223 million metric tons (collection rate of 56 percent) and by 2025 is projected to rise only five or six more percentage points to 308 million metric tons (61-62 percent collection rate), reflecting a slowdown in the rate of recovery.

Although these figures all point to a ner-vous tightening of recovered fiber supply in the face of increasing demand, the situation is more complex than that. Especially complicat-ing the situation is the series of stubborn, off-and-on economic slowdowns that continue to plague many countries around the world. Also a factor that has to be considered in the recycling “merry-go-round” is the fact that recycling does wear fiber out. The life span of pulp fiber is typically about five recycles, then fines begin to increase and quality (drainage, strength, yield, etc.) declines.

To help unravel these complexities and get a clearer view of the recycled fiber dilemma, Tissue360° recently met with three experts in the recovered fiber arena: Kathy Kneer, principal, Pöyry Management Consulting North America; Bill Moore, president, Moore & Associates; and Johnny Gold, SVP, Recovered paper collection rates, 1995-2025. Source: Pöyry.

Are We Running Out of Recycled Fiber?As recovery rates approach the ceiling, near-future global fiber shortages could develop

KEN PATRICK


happening, really. I think the real problem we have is that the quality of recovered fiber has gone down.”

Moore points out that “actually, the U.S. 40 percent recovered fiber export rate is very high considering that the country was exporting only around 10 percent some 20 years ago. We’re still holding 60 percent here. And the recovery rate has grown at the same time. As far as U.S. OCC recovery rates, specifically, Moore says they probably are 10 points lower than the “official” AF&PA (American Forest and Paper Association) numbers because of all the packaging/boxes that flow in from China and never make it into the accounting “pot.”

Moore adds that up near the recovery ceil-ing, quality and collection costs can dramati-cally limit recovery. “It can be pretty costly to get that last fiber,” he says.

THE CHINA FACTOR

There are numerous market drivers behind the increased collection and use of recovered fiber, but as Kneer explains, three in particu-lar stand out. First is the seemingly insatiable appetite for containerboard in China, which has led to further capacity expansions in that country. Second is the continuing envi-ronmental push for recycling, especially in the West, and the increased emphasis on diverting waste from landfill in the pub-lic sector, which has helped corral more recovered paper into the market. Third is the pronounced and ongoing decline of the graphics paper industry, removing very high tonnages from the global recycling stream in recent years.

There are other drivers, of course, such as legislation, cost of collection, pulp prices, paper demand, transportation, quality dete-rioration, and the growing share of tissue in the market, just to name a few. But of all the drivers, probably the greatest impact is com-ing from China. With China being a resource poor country, the vast majority of new mills there are focused on importing recovered paper. Kneer points out that the consumption

Recycled Fibers Division, Newark Recovery and Recycling, part of Newark Recycled Paperboard Solutions, and a member of the Recycled Paperboard Technical Association (RPTA). Their views and perspectives are included in the following discussion.

LINGERING ISSUES

All three experts agree that currently, at least, there are some recovered fiber availability issues building. “But what’s kind of confusing things is the spotty global recession that has dampened demand and slowed growth in so many regions—not all of them, but even Asia and Latin America have been affected,” Kneer says. “Right now they’re not demanding as much recycled fiber and the pressure isn’t as great because manufacturing has slowed, consumption is down, etc. But longer term, we think there will be lingering issues with availability and/or price. Eventually, do mills just start substituting virgin again?”

Gold emphasizes that “we haven’t run out of fiber yet, but we’ve never had these kinds of recovery levels in the past. The recovery levels are higher, not necessarily because we are recovering that much more fiber, but because there is less paper out there to recover. The recovery percentage has gone up but the amount of tonnage in some cases is actually less. There are certain grades that will always be there, such as packaging boards, but print-ing and writing (P&W) papers are less and less, for obvious reasons.

“I do get a little concerned about the 90 percent-plus recovery of OCC in the U.S.,” Gold continues. “In the future, if you need more, you might have to mine the landfills and/or go to non-traditional places. Already, we’re beginning to see some of that. But I don’t really get all that nervous about it, because, you know what, we always have virgin. If recycled becomes more costly than virgin in a grade sector like containerboard, then producers obviously will swing to virgin, where we currently do have excess capac-ity—and globally also. But I don’t see that

Bill Moore, President, Moore & Associates

Johnny Gold, Sr. VP, Recycled Fibers Division, Newark Recovery and Recycling, part of Newark Recycled Paperboard Solutions

of papermaking fiber in China was close to 104 million metric tons in 2011 and is forecast to grow rapidly, reaching 164 million metric ton by 2025. Of this volume, approximately 25 percent is imported recovered paper (the rest being domestic recovered paper, wood pulp, and non-wood pulp).

Moore, as a whole, sees China continu-ing to import more recycled fiber, primar-ily for board products, “but the growth rate will slow,” he believes. “Right now they have overcapacity in the board grades, and that’s helping hold the recovered paper market in check.” But China doesn’t have a domestic softwood source, he adds, so they will have to import more recovered OCC.

“The Chinese containerboard industry is definitely tied to OCC and, to a lesser degree to mixed papers—and it will continue to be,” Moore continues. “At the top of the cycle they use some unbleached kraft pulp, and that’s becoming more of a traded commodity—still very small, and mostly used for high-strength outer layers, special products, triple wall, etc.” But in the near future, Moore notes, China will increase its domestic recovery rates. More of their boxes will stay at home as their domestic markets grow in the coming years.

“On the tissue side, China has been virgin right from the start. From a cost standpoint, why ship recovered office papers out of the West and lose 40 percent yield, when China has ready access to Indonesian pulp and glob-ally trades in short fiber pulp?” Moore asks.

“With P&W papers, a few groups have tried using a little recycled paper here and there, but it’s just not going to happen in China—even less so than in the West. In newsprint, it’s really not happening in China either. Newsprint is 100 percent recycled there, but they shut down more than we do. They haven’t built a new newsprint mill in China in five to seven years,” Moore notes.

“Overall, when you look at China’s official recovery numbers, you have to ask why they don’t do a better job. But if you go to their landfills and incinerators, you won’t see much if any OCC. You see a lot more here in the states. But that’s because the boxes are going out, the price of fiber is high, and they’re-energized to recovery,” Moore emphasizes.

According to Gold, as the Chinese econ-omy grows, Chinese workers will want and get higher pay. “As their standard of living improves and Chinese have more spending money in their pockets, they definitely will buy more goods and pump more paper–based


packaging into the domestic market. Their recovery base will swell and their recovered paper rate will increase over time.”

Kneer agrees. “We do think that China’s recovery rate, especially with OCC, in real-ity is much higher than 40 percent—more like 60 percent—considering the amount of boxes that go out with their exported goods. None of this fiber outflow is available for them to recover, so it’s not fair to use con-tainerboard production as the denominator (or numerator) in determining recovery rates. Certainly, they try to recover in China—they see the value in re-use, and their Green Sense Initiative is helping in this regard. So their demand will continue to grow and place more stress on the whole global system.”

In regard to the emergence of China’s domestic markets, Gold sees the possible development of a new, reverse crisis. “As China begins to absorb more into its domes-tic markets, and thus begins to recover more, they will take less and less from us. As that happens, we won’t have the paper mills here to take it all. A surplus situation could build, tending to drive prices down as well as over-all recovery rates. In the future, the recycled fiber business in this country could suffer and decline as a result.”

QUALITY IN A HAND BASKET

Kneer says that the world’s movement toward sustainability has increased in most regions, and certainly has increased here in the U.S. “As landfill costs have gone up, municipali-ties have looked to recycling. And it seems to be going more toward single stream, which does increase the contamination levels. This is becoming a bit of an issue.”

Gold is especially emphatic about the con-tinuing decline of recovered paper quality. “Some of the formats we’re recycling in now, such as single stream, are designed to make collections easier, but they have definitely undermined the quality. Fiber we get out of municipalities today just doesn’t meet the specifications of most mills, with its high

levels of out-throws and contaminants. By mixing up so many grades of paper and board, we’re creating a sorting nightmare

“At Newark, we’ve seen the quality collapse first hand,” Gold continues. “We handle quite a bit of residential mixed paper in our own corporate mills. Once, one of our mills taking in 550 tons a day of residential mixed paper was removing close to 70 tons a day out of the trashing systems as cans, glass, plastic, etc. We were paying for that 70 tons, and then paying to get rid of it.

“OCC isn’t bad, but all of the other grades are terrible. The quality of today’s recycled paper—residential mixed paper—has gone in the toilet, there’s no doubt about that,” Gold concludes.

GOING FORWARD

Moore says that he prefers to look at the North American fiber situation going for-ward from a grade-by-grade standpoint, “and where I think we should be in terms of balance in fiber, and where it’s all going to come from. On the tissue side, I think we have reached the global and U.S. maxi-mum recycled fiber level, and probably will begin to decline. There’s a distinct reason for that—we’re making less P&W papers, and that’s the traditional source for tissue, especially away-from-home grades. As the markets have shifted, use of P&W papers in tissue has become progressively uneco-nomical. In the not too distant future, the world’s going to be awash in short fiber vir-gin pulp, chasing P&W paper demand that’s just not going to be there. So there’s going to be plenty of bleached tropical hardwood pulp available for tissue.”

On the P&W paper side, Moore says the penetration has never been more than 10-15 percent recycled fiber. “The economics have never favored it. It’s really a specialty thing. And I think, going forward, it will remain so, with very moderate recycled fiber rates. Recycled fiber use in P&W papers is almost uneconomical, but it does occur.

“On the newsprint and mechanical papers (both coated and uncoated) side, Moore continues, “it also has become somewhat uneconomical to use old newspapers (ONP). The cost advantage with these grades today is clearly to TMP and the other mechanical pulps. With newsprint, capacity shutdowns have been biased toward recycled because ONP supply is diminished and also because the quality has declined so much that it has

become uneconomical. What’s left of news-print is being more and more produced with virgin fiber. In North America, we have retreated from a peak of about 45 percent ONP to around 35 percent today. And even though the fiber stinks, nobody complains because the market’s good and there’s not enough newsprint around.

“Of course the recycled boxboard grades are 100 percent recycled—and they will continue to be,” Moore points out. “They still are an economical furnish to make shoe and cereal box paperboard and many other unbleached, moderate quality products. That’s going to continue. The high end pharmaceutical, ciga-rette, and specialty packaging is going to be bleached virgin paperboard.”

The global containerboard sector is a massive user of recycled fiber. “Globally,” according to Moore, “we’re probably at 55 percent recycled fiber, and in the states we’re around 40-45 percent. And that’s been sta-ble. We went way up over the past 30 years and now are at a stability point. Like tissue, I believe we are going to see a little bit of shift back to virgin fiber in the states, particularly in the Southeast where we have good kraft pulping systems and an abundance of big trees. In the rest of the world, we will start to see a slower market growth in OCC for containerboard, just because pricing at the top half of the cycle will become less com-petitive with virgin.”

Looking again at the ceiling in the U.S., Kneer says that going forward, “in urban and certain other areas we could get above 80 per-cent (rough average for all grades) because the capability and cost to collect is less—you’re collecting in blocks as opposed to country miles in Wyoming. But in rural areas, it will become progressively more difficult. And even in some suburban areas, it likely will grow more difficult.

“If you look at what could be recovered, you see that we could get to 90 percent maybe. But there are some grades that can’t be effectively recovered, such as tissue. Specialty grade such as cigarette papers, for example, burn, and thus can’t be recovered, along with most food wraps (contaminated by oil/grease, etc.). So there’s probably 20-30 percent that we will never be able to recover. It depends on what you are using as a base,” Kneer says.

Ken Patrick is Editor of Tissue360° magazine and Senior Editor of Paper360°. Contact him at: [email protected].

Kathy Kneer, Principal, Pöyry Management Consulting North America

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