USA
SCA STARTS UP SECOND PAPER MACHINE

SCA Tissue North America started up its new No 14 paper machine on 19 October at its plant in Barton, Alabama. The new machine represents a strategic investment of $145 million that together with the Barton plant's existing paper machine will increase annual tissue production at the facility by 70,000 tons to 180,000 tons.

"This new paper machine strengthens our strategic position in the industry and increases our ability to better service our customers by increasing our internal supply of tissue. This will serve to enhance our ability to supply customers effectively and to build on our already industry-leading fill-rate of 99.8%," said Don Lewis, SCA Tissue president.

"The South-east region is the fastest growing in the country. Because SCA uses a regional manufacturing approach that involves making products in the regions where they will be shipped, the new machine in Barton is a strategic choice for us," said Lewis.

All products from the SCA Tissue mills are made from one hundred percent recycled paper. With the new machine, Barton will process an additional 100,000 tons of waste paper per year, bringing the total annual recycled volume for SCA Tissue to 800,000 tons.

SCA Tissue is a leading manufacturer of paper napkins, tissues, towels and wipers used Away from Home - in commercial settings such as restaurants, office buildings, schools and healthcare facilities. Nearly half of the disposable napkins used in US restaurants are


POTLATCH COMPLETES ELWOOD INVESTMENT

Elettric80 has recently completed installation of E80's Freeway® system consisting of robotic palletizers and laser guided vehicles (LGV) at Potlatch Forest Products Corporation's consumer products division facility in Elwood, IL, USA. The installation was completed on time in the spring of 2008, and was managed through E80's headquarters in Chicago.

The scope of the project consists of automating palletizing of all production lines and transport of finished goods via LGV to Potlatch's Midwest distribution center. Headquarted in Spokane, Washington, Potlatch is a leading North American tissue and finished products manufacturer with converting operations in Lewiston, ID, Las Vegas, NV and Elwood, IL.


KLEENEX ANNOUNCES FACIAL TISSUE UPGRADE

Kimberly-Clark Corporation has announced the North American launch of what it calls "the next generation in facial tissue performance" through Kleenex Facial Tissue with Lotion. This enhanced product "delivers a dramatic improvement in softness and strength to the Kleenex brand through a new proprietary advancement in tissue technology", the company claims.

"Kleenex is the leading facial tissue brand because it consistently meets or exceeds consumers' needs by delivering new innovations to the marketplace," said Kim Underhill, president of Kimberly-Clark's North American Family Care Business. "Our newest facial tissue innovation combines a more soothing feeling with the strength desired by so many consumers."

The enhanced Kleenex Facial Tissue with Lotion, a super-premium three-ply tissue, leverages a new proprietary surface treatment to deliver a recognizable improvement in tissue softness while at the same time increasing tissue strength by 17% versus its previous lotion offering.

The new tissue technology creates a demonstrable difference in softness and strength consumers can really feel. In comparative product testing, K-C found that a majority of consumers preferred the enhanced Kleenex Facial Tissue with Lotion over the major competitor's lotion tissue offering.

"We are changing the facial tissue category by offering consumers a softer, stronger and more soothing Kleenex brand facial tissue that delivers the next generation in product performance," said Underhill. "Up until now product changes in the category have typically improved strength at the expense of softness, and vice versa. This advancement in tissue technology resolves that issue, and will be notable in the category and only offered by the Kleenex brand."

Kimberly-Clark is introducing this proprietary technology on its Kleenex brand lotion product line first. Lotion facial tissues represent the fastest growing segment of the facial tissue category, with sales growing an average of 7%/yr over the past three years, according to AC Nielsen US Data 05-07. The company plans to expand the new tissue technology in other Kleenex brand product lines in 2009.

To support the launch of the enhanced Kleenex Facial Tissue with Lotion, the Kleenex brand team will roll out a multi-million dollar marketing and consumer sampling campaign to enable consumers to physically feel the softness in the product. Elements of the campaign include the largest consumer product sampling effort in the history of the Kleenex brand - helping provide the "ultimate touch experience" by delivering more than 60 million samples to consumers. In addition, the campaign will use TV advertising, FSIs and in-store promotions.

"K-C is committed to driving sustainable growth of the Kleenex brand by launching new product and marketing innovations and we believe the enhanced Kleenex Facial Tissue with Lotion will create customer and consumer excitement in the facial tissue category," said Angela Fisher, Kleenex senior brand manager. "Our marketing efforts are designed to engage consumers at every touch point - in-stores, inhomes and in-market."

The enhanced Kleenex Facial Tissue for Lotion will be widely available at retail outlets across North America beginning in October.


SOUTHERN PAPER GROUP BUYS PERMAFLEX ROLLER

Southern Paper Group (SPG), a leading supplier of MRO items, specialty chemicals, and services to the pulp and paper industry, has "taken an ownership position" in Permaflex Roller, formerly KRC, a leading supplier of rolls and roll covers.

Permaflex has manufacturing facilities in Canada and the USA. SPG has five sales and service offices throughout the US. The new structure takes advantage of the two company's facilities, applications, engineering, sales and service resources to better service customers in the paper, film, tissue, corrugated and converting industries.


ATLAS PAPER NAMES GAGLIARDI EVP

Ed Gagliardi has joined Atlas Paper Mills as executive vice president of sales and marketing. He has more than 30 years of experience in the janitorial and food service industries. He recently served as director of Colgate Palmolive's Commercial Customer Groups, developing and implementing strategies for entering new markets and revitalizing brands in commercial and industrial markets.


CONVERTING EXPERT TO HEAD SIGMALA US

Dave Rumson has joined UK-based Sigmala to head up Sigmala USA with the intention of rapidly escalating sales of the company’s flagship product, the SL50 knife holder, a device that does not use pneumatics or hydraulics, just electrically powered embedded servo motors and computer systems.


G-P LAUNCHES THREE-PLY TOILET TISSUE

For the at-home market, Georgia-Pacific (G-P) has unveiled in stores the first three-ply toilet paper in the USA. "This is to compete with Procter & Gamble's and Kimberly-Clark's TAD machines which have established industry benchmarks for tissue quality in ultra softness and absorbency," RISI's director of tissue Brad Kalil said in a presentation at the RISI North American Forest Products conference in Boston.

Three-ply has been in the marketplace in Canada for a few years, including with Irving Tissue's "Royale" brand, he said. "If G-P's launch is successful, some other mid-size US companies may follow rather quickly. This could result in a boost for toilet tissue consumption, measured in terms of weight." Three-ply tissue products are made with more raw material than two-ply, by roughly 50%, Kalil said before his presentation. He said the G-P three-ply was now in Wal-Mart stores. Canadian demand for tissue products is expected to grow slightly faster than US demand through 2011, according to Kalil's report.

Four capacity additions totaling 121,000 tons are expected next year in the USA. Wausau Paper is adding 16,000 tons/yr at its Middletown, OH, mill; Cellynne is starting a new 39,000 ton/yr machine at its Haines City, FL, mill; Augusta Tissue is starting a 33,000 ton/yr PM in Augusta, GA; and Allied West Paper is starting up its first-ever PM at a mill in Yuma, AZ.

Tissue remains the most consistently growing sector in the North American pulp and paper industry, with demand expected to rise 1.2%/yr through 2011 – primarily from growth in consumer home tissue and toweling paper use, Kalil said in his presentation. At home toilet tissue and toweling products each should grow by roughly 1.8%/yr. Awayfrom- Home tissue products should grow 0.9%/yr, with more than 1%/yr growth in both toilet tissue and toweling.

News from RISI (www.risiinfo.com)


NORTH AMERICA
THE NORTH AMERICAN TISSUE MARKET
By Brad Kalil, Director of Tissue, RISI

The tissue market is one of the strongest growing segments in forest products, especially in the mature markets of North America. Over the last 10 years the North American tissue market has expanded 2.1% annually while the rest of the world has grown by 4.6% annually. Even with worldwide tissue growth nearly double that of North America, the United States is still the largest tissue market in the world. The North American tissue market is comprised of toilet tissue (45% share of North American consumption), toweling (36%), napkins (12%), facial tissue (6%) and other uses, including sanitary (1%).

The US remains the largest single market because of its continued growth in per capita consumption. The US takes the worldwide lead at close to 24 kg, followed by Canada at 22 kg. In the last 20 years US per capita consumption has increased by 5 kg, while in the last 10 years it has risen by 2 kg. This development illustrates that the tissue business continues to have good growth opportunities even when the market is mature and product penetration is high.

Approximately two-thirds of US tissue consumption is in the consumer sector, or At- Home, while the rest (32%) is in the Awayfrom- Home (AfH) sector, including industrial converting applications.

Consumption growth has been faster in the At-Home (2.9%) than in the AfH sector (0.8%) in the last 10 years, further increasing the At- Home share. Usage patterns are similar in the USA and in Canada. US per capita consumption is higher than Canadian consumption, particularly in toweling, while climatic factors contribute to the high facial tissue consumption in Canada.

Consumption trends
North American tissue consumption experienced very strong growth in 1996-2000, driven by the strong US economy and consumer spending. At-Home consumption continued to be rather strong thereafter, although the growth declined to 1.7% annually in 2001-2006. Growth accelerated again in 2007 to 2.2%. For the period 1997-2007, North American consumer sector tissue growth averaged a respectable 2.9% annually.

Consumer toilet tissue and kitchen toweling, by far, accounted for the largest volume of growth in North America in 1996-2006 (see figure). Kitchen toweling has shown the fastest relative growth rate benefiting from new products and product modifications by all the main players, including Procter & Gamble (P&G), Kimberly-Clark (K-C) and Georgia- Pacific (G-P).

The At Home facial tissue segment is a stagnant market facing increasing competition from nonwoven-based wet wipes products. Suppliers have made efforts by increasing the supply of pocket tissues to complement boxed facial tissue when traveling and other "to go" applications, but these efforts have not been successful in growing the total facial tissue consumption. At Home napkins, another mature market, are gradually losing to kitchen toweling as consumers switch to using lower cost and, in some cases, better quality toweling products.

The AfH sector, on the other hand, has suffered drastically from the consequences of 11 September: North American converted product demand declined 2.1% in 2001 after several years of 2-3% annual growth. The overall growth rate of the AfH sector was further negatively influenced by the sharp decline in diaper carrier sheet demand, as new diaper constructions no longer require a tissue sheet, using instead a nonwoven sheet. This change took place within a relatively short period of time. Further severe substitution came from cleaning wipes using nonwoven and other higherperformance materials. The AfH tissue business suffered an additional (albeit one time) loss by the successful efforts of wholesalers and big end-users to use just-in-time deliveries and tighten inventory control.

Furthermore, AfH toweling growth has been cut by the ongoing change from folded towels to roll towel dispensers. Tissue companies, as well, have launched new series of touch-free, motion-activated and controlleduse towel dispensers, which promote paper reduction and discourage waste by controlling the amount of toweling dispensed at each use. Paper-saving napkin dispensers have also been introduced in fast-food restaurants; some outlets even moved the dispensers behind the service counter.

Future demand drivers

• The main variables that will drive future tissue demand in North America include:
• Expected future economic growth
• Population growth and other demographic changes
• Quality upgrading and inventiveness by companies for new product specifications
• Dispenser developments in the AfH sector
• Substitution effects.

The North American tissue business has grown in recent years mainly because of quality upgrading, new product launches and modified product re-launches, in addition to innovative marketing by the industry leaders. We expect this to continue, although it may be increasingly difficult for companies to find further, desirable innovations.

Overall demand for tissue products in North America is forecast to grow at an average annual rate of 1.2% over the next three years (2008-2010), growing nearly 93,000 tons annually. Canadian demand is expected to grow slightly faster than US demand. Quality upgrading will continue in the Canadian market where there is still more upgrading potential than in the USA.

News from RISI (www.risiinfo.com)


CANADA
BUYERS' GUIDE TO FOREST PRODUCTS

The Forest Products Association of Canada (FPAC) and PricewaterhouseCoopers (PwC) have developed a Canadian buyer's guide for purchasers of wood and paper-based products. It provides important guidance on what to consider when writing procurement policies and programs that need to be based on sustainable and socially responsible forest practices.

The Guide provides practical advice in areas critical to ensuring that purchasing practices contribute to the positive development of communities and do not harm the environment. It encourages the reader to go beyond the traditional considerations of price, quality, service and availability, by considering all aspects of the production process and their impact on the environment. Such topics as climate change, traceability, certification, legality and social desirability in the production of Canadian forest products are covered in the guide.

"In a world where illegal logging and deforestation are causing irreparable damage to the planet and our climate, responsible buyers of wood and paper-based products are seeking assurances that what they are buying comes from responsible sources - sources that harvest legally, regenerate promptly, recycle, reduce greenhouse gas emissions and welcome independent scrutiny. The Guide helps them attain these assurances in the Canadian context," said Avrim Lazar, president and CEO of FPAC.

"Decisions regarding the purchase and use of wood and paper-based products can have far-reaching, long-term impacts," says Bruce McIntyre, leader of the PwC Forest, Paper & Packaging practice in Canada and co-author of the Guide. "Beyond the immediate and obvious consequences of their purchases, consumers, retailers, investors and communities are taking an increased interest in how their buying decisions will affect the environment for future generations. We want to help make those choices by providing them with solid information on Canada's environmental credentials when it comes to forest products."

The Buyers' Guide to Canada's Sustainable Forest Products addresses the major considerations presented by the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI) - these include sourcing and legality, environmental and social aspects of production. The Guide recommends that organizations that purchase forest products should take a complete life-cycle approach to evaluating the sustainability attributes of these products. A life cycle assessment helps to objectively determine the environmental impacts of products, processes or services through production, usage and disposal of the productsan area where Canada in particular excels. The Buyers' Guide to Canada's Sustainable Forest Products is available from the FPAC website at: www.fpac.ca.


LATIN AMERICA
APEX GROUP STARTS ACTIVITIES IN LATIN AMERICA

Apex Group of Companies, a Netherlands-based group which makes anilox and metering rolls in the flexographic printing industry, has started operations in Latin America. It has appointed Dercilio Oliveira as Sales Area Manager for Apex Latin America.


BRAZIL
FACEPA OPTS FOR VOITH FOR PM REBUILD

FACEPA, a 50-year old tissue producer located in Belem, Pará - Brazil, has chosen Voith Paper to improve the quality of its tissue paper and at the same time increase the production of the 2.6m wide PM4.

To achieve those goals, FACEPA has contracted Voith Paper to rebuild the PM4 former, which was supplied by Voith in 1991. The project includes the supply of a new headbox - the MasterJet II T, a new crescent former replacing an old fourdrinier former, erection and start-up services as well as all the necessary engineering required for the project. The total investment will be approximately $2.5 million. Start-up is scheduled for the first quarter of 2009.

After the project is implemented, FACEPA will be able to increase PM4's speed from 950 to 1200 m/min, resulting in 27% production capacity increase. With the possibility of further development in mind, the company has opted for new equipment designed to achieve speeds of up to 1400 m/min.


SEPAC STARTS UP €40 MILLION PM PROJECT

Sepac's VTM2 tissue machine from Voith Paper is producing tissue paper successfully at the Mallet mill in Paraná, Brazil. The machine, which started up in July, raises mill capacity to 72,000 tons/yr. With a speed of 1600 m/min the tissue machine is producing tissue papers with basis weights between 14-35 g/m².

With the goal to become one of the largest manufacturers of tissue paper in Brazil, Sepac invested heavily on the tissue machinery project, in peripheral equipment, start-up assistance, trainings and engineering installation.

The investment is part of a large expansion project from Sepac, estimated at €40 million, which goes beyond the acquisition of the new tissue machine. The total project includes the modernization of other equipment and mill infrastructure, including thermo-electrical supply.

Created in the 1970s, Sepac is exclusively a tissue paper producer. It is No 5 on the Brazilian market and also sells toilet papers and napkins in other countries of the Mercosur bloc.