Ian Melin-Jones
Domtar to permanently close its coated groundwood paper mill in Columbus, Mississippi
Domtar Corporation (NYSE/TSX: UFS) announced today that it will permanently close its coated groundwood paper mill in Columbus, Mississippi. The Domtar coated groundwood paper mill has an annual production capacity of 238,000 tons of coated groundwood and 70,000 metric tons of thermo-mechanical pulp. The mill currently has 219 employees. Operations are expected to cease by the end of April 2010.
"Market conditions for coated groundwood paper are challenging and despite the best efforts of our employees - and these efforts have been commendable - the mill continues to suffer from a weak cost position," said John D. Williams, President and Chief Executive Officer of Domtar. "With this permanent closure, Domtar is exiting the coated groundwood paper business."
Domtar also announced the sale of its Choctaw(R), Saturn(R) and Jupiter(TM) coated groundwood product lines and trademarks to NewPage Corporation. The sale to NewPage also includes the mill's paper inventory and book of business. Domtar intends to dismantle and dispose of remaining assets as deemed appropriate.
Domtar will take measures to assist employees affected by these decisions in accordance with its policies.
USGBC Urged to Support Forest Certification
PEFC has called on the United States Green Building Council (USGBC) to live up to its mission to truly 'transform the way buildings and communities are designed, built, and operated' by promoting the use of certified wood as one of the most environmentally-friendly building materials. 
The USGBC has ended its 3rd public comment period on the draft benchmarks to evaluate forest certification systems yesterday. The expressed intention of these benchmarks, according to USGBC, is to set high standards for forest certification systems and to incentivize 'their evolution towards more stringent requirements'.
"We have to bear in mind that after 20 years of activity, only eight percent of the world's forest are certified to the already strict requirements set out by the worlds two global forest certification systems, FSC and PEFC", said Ben Gunneberg, PEFC International Secretary General. "While wanting to raise the bar even higher is an admirable objective, it is rather unlikely that it will support efforts to increase the area of forests certified as sustainably managed."
PEFC is the world's largest forest certification system, and with about half a million certified forest owners the certification system of choice for small forest owners.
Mr Gunneberg added that the green buildings movement will lose its ability to promote changes if it settles at levels which are too demanding, elitist, and catering only for the boutique end of the market for wood. At the same time it is clear that the green buildings movement will lose its credibility if it is too undemanding, business-as-usual, and certifying the lowest common denominator.
He voiced his concern that if global certification systems have not been able to mainstream forest certification with the existing set of requirements, all that more stringent requirements will do is to continue to exclude forests from achieving certification for some time to come. "And if obtaining certification ceases to be a viable option for forest managers, there is a huge risk that they will re-focus their attention from implementing sustainable management methods to producing at low cost. And low-cost management methods are not necessarily sustainable."
Sustainable forest management is widely recognized as an essential component in tackling a number of societal issues, including climate change. Global forest leaders, gathered under the auspicious of The Forest Dialogue, an initiative hosted by Yale University's School of Forestry and Environmental Studies, has identified the substitution of high-emissions materials and fuels with sustainably produced forest products as an important component of the most effective forest-based approaches dealing with climate change.
In the U.S., buildings are of fundamental importance in the climate change debate as they account for almost 40% of the total CO2 emissions. Studies estimate that CO2 emissions for wood-based buildings are 20-50% lower than emissions associated with comparable steel or concrete based buildings.
"Both global forest certification systems are based on widely accepted requirements, with PEFC basing its understanding of sustainable forest management on broad societal consensus expressed in international, intergovernmental, multi-stakeholder processes and guidelines involving thousands of interested parties," concluded Mr. Gunneberg.
"While we believe that the USGBC is truly interested in 'enabling an environmentally and socially responsible, healthy, and prosperous environment', its efforts must be targeted towards increasing market demand for certified wood instead of potentially excluding one – or both – global forest certification systems from their credit system."
Further information
- Letter to Steve Baer (
203 kb), Chair, USGBC Materials & Resources Technical Advisory Group (14 March 2010) - Press release: USGBC LEED Standard: Friend or Foe in Global Movement to Fight Climate Change? (8 October 2009)
- Letter to Richard Fedrizzi ( 37 kb), USGBC President and CEO (8 October 2009)
Ahlstrom completes repurchase program of its own shares
Ahlstrom Corporation announces that it has completed the repurchase program of its own shares announced on February 3, 2010.
The company has acquired a total of 75,000 shares at an average price of EUR 11.68 through public trading on the NASDAQ OMX Helsinki exchange.
The shares were acquired under the authorization granted by the Annual General Meeting 2009 for the implementation of the Company's share-based incentive plan.
Ahlstrom's Board of Directors has an authorization to acquire 4,500,000 of the company's own shares, which is valid until the end of the 2010 Annual General Meeting.
Further information:
CFO Seppo Parvi
Tel. +358 10 888 4768
Distribution:
NASDAQ OMX Helsinki
Main media
www.ahlstrom.com
Ahlstrom in brief
Ahlstrom is a global leader in the development, manufacture and marketing of high performance nonwovens and specialty papers. Ahlstrom´s products are used in a large variety of everyday applications, such as filters, wipes, flooring, labels, and tapes. Based upon its unique fiber expertise and innovative approach.
The company has a strong market position in several business areas in which it operates. Ahlstrom's 5,800 employees serve customers via sales offices and production facilities in more than 20 countries on six continents. In 2009, Ahlstrom's net sales amounted to EUR 1.6 billion. Ahlstrom's share is quoted on the NASDAQ OMX Helsinki. The company website is at www.ahlstrom.com.
Mayr-Melnhof Karton release 2009 Annual Results
The Mayr-Melnhof Group managed to hold its ground in the financial year 2009, despite the continuing global recession which affected the cartonboard and folding carton industries with high volatility in the customers' demand behavior. Due to a considerable decline, particularly in variable costs, we managed to improve our results in comparison to last year's figures, despite reduced sales.
Both cartonboard production and processing were responsible for the improved earning power of the Group. The generation of a high cash flow reinforced the stable high equity financing power of the MM Group, thus facilitating dividends at last year's level.
Annual Results 2009
Operating profit +9.5 %
Profit for the year of EUR 97.4 million above previous year
Dividend at 1.70 EUR / share maintained at last year's level
Start 2010:
Good capacity utilization since the beginning of the year
Sharp increase of recovered paper prices
To see the full results follow the download link below.
Forest industry to donate €4 million to the Aalto University
The forest industry is to donate €4 million to the starting endowment of the Aalto University in order to strengthen the forest-based sector’s innovation environment in Finland.
Forest industry companies are seeking out top international universities as cooperation partners in their effort to create new products and services. The Aalto University is counted among these top schools.
It is important that sufficient financial resources are made available for it to rise into the global elite with regards to its research and teaching activities. This will enable it to support the renewal of the forest industry as well.
The forest cluster’s research strategy has steered industry research and teaching activities towards key areas of growth. Forestcluster Ltd, Finland’s first Strategic Centre for Science, Technology and Innovation, and Finnish Wood Research Ltd, an agency that networks the wood products cluster’s joint research and development activities, provide resources for significant projects, which promote the renewal of the forest industry.
VTT Technical Research Centre of Finland and Keskuslaboratorio (KCL), an organisation specialising in forest industry research, were merged into an internationally unique concentration of competence last year. The Aalto University professorship, which was donated by the forest industry, will promote the teaching of wood construction specialists as well as strengthen the regeneration of the forest-based sector through education.
Further information:
Antro Säilä, Senior Vice President (Business and Innovation Environment),
tel. +358 9 132 6633, +358 40 589 1891
Arauco's First phase assessment
The entire country, as well as ARAUCO, have set an agenda to aid the victims of the earthquake and tsunami that hit Chile on February 27. The Chilean people's spirit of cooperation was seen during the Telethon that took place on March 5 and 6, which collected 50 billion pesos. The company contributed 1,500 million pesos to this effort and commited to install two facilities to build emergency homes: one in Constitución and another in Arauco, which is where the company has focused most of its relief aid.
During the first ten days following the catastrophe, ARAUCO sent trucks with relief aid to workers, contract workers and their families, as well as to part of the communities neighboring its facilities.
In total, the company has distributed 5,500 food rations; more than 319 thousand units of non perishable food (in kilos, cans, packs or liters according to each unit); more than 17,700 liters of drinking water; more than 97,600 units of essential personal care products; more than 13,900 units of clothing, bed linen, mattresses, mats, tents, plastics and bags, etc.; six electrogen equipment units and more than 94,300 liters of fuel.
Also, in a joint effort with the municipality, machinery was made available to clear the streets and highways and to provide basic services. Additionally, four hectares of land were donated for the temporary installation of one thousand emergency homes.
During this first phase, corporate aid has been important but we would like to highlight the spontaneous support efforts that company workers who have not been affected by the earthquake have organized, through the company, to help their coworkers down south.
Today, the company as a whole is preparing for the second phase which will mainly consist of debris removal and cleaning and repairing the affected production facilities and locations to get them back on their feet.
Scottish Woodlands Ltd achieves PEFC Certification
Scottish Woodlands Ltd has added PEFC (Programme for the Endorsement of Forest Certification) Forest Management Certification capability for those forests in its Group and Resource Manager Schemes in the United Kingdom. The Certificate was issued to the Company by SGS Italy.
Clients of Scottish Woodlands whose forests are managed within these Schemes will now be able to access timber markets in the UK and Europe, which require PEFC certified timber. Chain of Custody arrangements are currently being finalised to allow the first volumes to move in due course.
Rob Shaw, SEQ and Contracts Director for Scottish Woodlands announced, “We had received expressions of interest from major UK timber processors about our ability to provide PEFC certified timber. This is something we have been considering for some time. The most important aspect within the UK is that there is one agreed Certification Standard which is the UK Woodland Assurance Standard (UKWAS), and so we are now able to complement our existing Certification arrangements using this same world-leading standard. We would like to thank everyone who has worked hard to bring this to fruition, especially Douglas Orr and his colleagues at SGS Qualifor”.
William Walker of PEFC UK welcomed the announcement and said that “it ensures timber from the forests managed by Scottish Woodlands can enter the market with the label from the world’s largest certification programme which now has a certified area in excess of 225 million hectares spread over five continents.”
Notes to Editors:
* For further information, please contact Rob Shaw, SEQ & Contracts Director (E: This email address is being protected from spambots. You need JavaScript enabled to view it. T: 01349 864999), Garry MacInnes, Resource and Group Scheme Manager (E: This email address is being protected from spambots. You need JavaScript enabled to view it. T: 0131 451 5154) or Jean Nairn, Business Support Manager (E: This email address is being protected from spambots. You need JavaScript enabled to view it. T: 0131 451 5154).
* Scottish Woodlands Ltd is one of the country’s leading forestry management companies and is predominantly an employee-owned company. The core activities are forest management, new woodland creation, timber harvesting, and generation of new forestry investment as well as a growing presence in utilities, landscaping and renewable energy. Scottish Woodlands operates from a network of 16 offices throughout the UK, utilising the company’s biggest asset - its staff. The business had a turnover of £40.3 million in the year to 30th September 2009. Web: www.scottishwoodlands.co.uk.
* Scottish Woodlands’ existing Resource Manager and Group Scheme now has over 82,000 hectares under management distributed across Great Britain and Northern Ireland.
Call for speakers goes out for MainTrain 2010 in Fort McMurray
PEMAC (the Plant Engineering and Maintenance Association of Canada) and the Fort McMurray PEMAC Chapter is inviting interested parties to submit abstracts or topics for presentations/workshops for the MainTrain 2010 conference to be held in Fort McMurray, AB, September 15-17, 2010.
MainTrain is developed and produced by PEMAC, is supported by industry sponsors, and has been Canada's leading maintenance, reliability and physical asset management conference since 2004.
PEMAC is a national, not-for-profit association. It provides global leadership, education and certification in world-class maintenance, reliability and physical asset management practices.
The Oil Sands industries are continuously challenged by the reliability of mining, extraction and upgrading operations. Topics of the presentations/workshops for the Fort McMurray conference should be focused on how to help delegates measure maintenance and reliability success, adopt world-class maintenance practices, explore innovative ways to use emerging technologies such as non-destructive testing tools, and how to prove your value to management.
Key learning takeaways for participants are expected to be:
* How to measure maintenance success
* Prove value to your company CEO
* Lower critical asset management costs
* Increase the life cycle of key equipment
* Reduce waste with lean maintenance practices
* Boost production capacity and reliability; and
* Improve safety and environmental compliance.
Submission abstracts should be a maximum of 200 words, and include a biography and a photograph. Also, please submit a description of any venues/conferences where you have presented before. Case studies and interactive sessions will be given priority. Speakers will receive free admission to the conference.
Send submissions to This email address is being protected from spambots. You need JavaScript enabled to view it.. The submission deadline is April 2, 2010.
For more information, visit the events website at www.maintrain.ca or call Norman Clegg, PEMAC executive director, at 905-823-7255, or Amin Elsherif, president PEMAC Fort McMurray, at 780-715-8737.
Apollo and Avenue aim to roll-up paper sector with NewPage
Apollo Management, Avenue Capital and Franklin Templeton are consolidating more than 50% of NewPage’s USD 1bn worth of second lien bonds, four persons familiar with the matter told Debtwire. The vulture trio’s bet is that the second liens will prove the fulcrum in a near-term restructuring.
Taking over the struggling coated paper producer would align strategically with Apollo’s and Avenue’s other investments in the industry. Apollo controls Verso Paper, while Avenue is a lender and creditor to bankrupt AbitibiBowater and will hold a large stake in the company upon exit from Chapter 11, the sources said.
Apollo, Avenue and NewPage’s equity sponsor Cerberus Capital Management, declined to comment. Calls to officials at Franklin and NewPage were not returned.
NewPage faces a real threat of running out of cash this year, said three buysiders and two sellside analysts. Stripping out the USD 304m one-time benefit the company received from the IRS’ black liquor tax credit that expired in December, NewPage’s underlying EBITDA in 2009 totalled USD 84m, down 86% from USD 584m generated in 2008. Over the same time period, liquidity fell to USD 223m at YE09, down from USD 344m at YE08.
The company will struggle to generate positive EBITDA in 1H10, and with USD 30m of projected capex and USD 180m of interest costs, Newpage could burn through its available funds quite quickly, said the buysiders and analysts. Management did pad its cash pile last week by issuing a USD 70m first lien incremental add-on.
Cerberus has several balance sheet levers it can pull to buy more time. The sponsor has amassed majority positions at the unsecured bottom of NewPage’s capital structure by buying its USD 150m 12% senior sub notes due 2013, and its USD 196m L+700bps senior unsecured PIK notes due 2013. The fund could tender the notes back to the company, and use its own cash augmented by USD 150m of prospective asset sale proceeds to sweeten a de-leveraging exchange of the second lien notes.
However, given the control positions in the seconds accumulated by aggressive hedge funds, any exchange offer that doesn’t involve giving up the equity keys will prove challenging to execute, the buysiders said.
Financial advisors are reaching out to second lien bond holders to open dialogue with management before a steep USD 160m interest tab falls due in 2Q09. However no formal broad organization of the class has taken hold, said a source familiar and a buysider.
NewPage’s USD 804m 10% second lien notes due 2012 traded at 60.5 last week, from 56 on 23 February, according to MarketAxess. Its USD 225m L+625bps second lien notes due 2012 last traded at 55 on 2 March from 59 on 26 January.
The USD 150m 12% senior sub notes due 2013 have been trading in small lots in the mid-30s for the past month. The USD 196m L+700bps senior unsecured PIK notes due 2013 last traded at 15 on 25 November.
Rolling up the paper
If NewPage’s well runs dry, Apollo is in a prime position to benefit from the spoils.
The firms loan- to-own strategy in NewPage puts into play a potential synergistic payoff with its Verso Paper portfolio company, noted one of the person familiar, several buysiders and sellside analysts. Between the two of them, NewPage and Verso control 55% of coated free sheet and 50% of coated ground wood paper production in North America, according to trade service Resource Information Systems Inc (RISI).
Together, Verso and NewPage reported USD 4.7bn of revenue in 2009. Assuming a conservative 4% of revenue synergy rate, a pairing of the two companies could unlock an additional USD 188m of revenue, said two buysiders and one sellside analyst. More important, the ability to control supply would usher in much needed pricing power to the struggling manufacturers, they added.
As for Avenue, an ownership stake in NewPage could further consolidate the ground wood and supercalendered paper grades AbitibiBowater produces. AbitibiBowater controls 15% of coated ground wood paper production in NorthAmerica and is the leading producer of supercalendered paper with 28% market share. Newpage is number two supercalandered producer with a 21% market share, according to RISI.
Granted, any transaction that involves the potential for such massive consolidation will invite heavy scrutiny from antitrust regulators. But the radical repricing afflicting the paper industry will play in Apollo’s and Avenu’s favor.
The possible consolidation of 50% of one paper grade may seem aggressive, but the Department of Justice typically focuses on the pricing impact of a merger over the consolidation of market share, said an antitrust lawyer. “If there is secular decline and there are other technologies coming online that will keep pricing from going through the roof after the merger, that can justify a merger,” the lawyer said.
The DOJ approved the 2007 merger of Abitibi and Bowater, which consolidated 47% of North America’s newsprint capacity. That deal went through with only one mill divestiture required, dropping the combined company’s market share to 45%.
Source www.ft.com
Media advisory: Domtar at the Goldman Sachs Conference
Domtar Corporation (NYSE/TSX: UFS) announced today that Mr. Daniel Buron, Senior Vice-President and Chief Financial Officer, will be presenting at the Goldman Sachs Montreal Paper and Forest Products Investor Event in Montreal, Quebec, Canada on Wednesday, March 17, 2010 at 11:00 a.m. (ET). Financial analysts, media and other interested individuals are invited to listen to the live webcast on the Domtar corporate website at www.domtar.com