CENTER FOR PAPER BUSINESS AND INDUSTRY STUDIES (CPBIS)
AT
TAPPI Engineering, Pulping, and Environmental Conference
August 28-31, 2005
Philadelphia , PA

CPBIS researchers and staff are participating in two sessions during TAPPI's Engineering, Pulping and Environmental Conference later this month, as shown below. Please contact Colleen Walker (colleen.walker@cpbis.gatech.edu) if you have any questions or would like additional information about any of these presentations.

Please plan to join us for some great discussions in Philadelphia! 

Monday, August 29 - 10:30-12:00 Noon

Session 6: " The State of The N.A. Pulp and Paper Industry - The Innovation Imperative

James A. McNutt - CPBIS Executive Director
Dan Cenatempo - President, Value Resolutions Group

The North American Pulp and Paper Industry is not the low-cost producer on most grades, and high-volume grades have significant substitution threats. In addition, a large share of N. A. assets are aging and approaching the end of their economic lifetime. Participants must learn to thrive under these negative conditions. The overall industry will probably not fare well, but the individual companies can thrive if they use the next short-term upturn to embrace and leverage innovation. Innovation is imperative to create value. Typical North American pulp and paper companies have shutdown their innovative capacity (if it ever existed). As a result, in part, industry performance has been dismal. Investment is spiraling downward and competitiveness is eroding. However, individual suppliers and paper companies can leverage innovation to outperform the industry and create value. To restart the innovation machine, we need to open the culture to allow practices that drive innovation, become more comfortable with different risk/return ratios by adopting an investors' mentality of portfolio management, and become more intellectual through leverage of market-driven inventing and valuation/portfolio management tools.

Monday, August 28 - 1:30-3:00 PM

Session 10: "Pulp and Paper Business Issues"

1:30 - 2:00     A. F. Button, H. Nanko, D. C. Hillman: "The Myth of Commodity Pulps"

Most people who work with pulp are familiar with the concept of commodity pulps and can probably supply most of the acronyms, like NBSK, NBHK, SBSK, SBHK, DIP, and BCTMP. As many of these labels illustrate, the commodity, Northern Bleached Softwood Kraft (NBSK), for example, is defined by a region, level of bleaching, wood type, and pulping process. Recently the New York Board of Trade (NYBOT) began trading NBSK pulp futures. This commodity is described in the press releases as being of a commercially accepted "prime" grade of a specific moisture content, dirt count and brightness. All of this information suggests that NBSK is a commodity, but is this "commodity pulp" truly a commodity? This presentation delves into this question by looking at the similarities and differences of a cross-section of market NBSK pulps available around the world.

The testing results of 16 NBSK market pulps, ranging across the northern hemisphere from Coastal British Columbia to Siberia, are compared to show that major differences exist in many key properties of this commodity pulp. These differences are translated into both likely paper performance outcomes and their economic impact. The major role that fiber morphology plays in these differences and the reason for the trends in the data will be highlighted. The presentation will examine, additionally, the connection between traditional paper industry pulp analysis and commodity pulp.

2:00 - 2:30     Michael C. Farmer: "The Adaptable Integrated Biorefinery for Existing Pulp Mills"

One important pathway to commercialize black liquor gasification for a noticeable impact on the US Industrial Energy Market is to operate at an adequate scale. Larson et al (2003) suggest a 7 CFA gas turbine operating from a 1900 dry T/day pulping operation. However, many ageing mills do not operate at that scale and most new mills have new Tomlinson boilers unlikely to retire in the next 15-20 years. If older, smaller mills face a rebuild, shut down or convert choice; it is arguably unlikely they will adopt the dual investments of a large scale gasification system and scale up pulping operations at the same time. One option for impact in the 25 year horizon is the biorefinery but the exemplar or reference mill arguably should address the realities of those mills likely to be conversion candidates in the intermediate term.

This work considers the adaptable integrated biorefinery that operates at a large scale for gasification but not perhaps at a large pulp making scale. This means that biorefinery conversions may look very different from place to place, producing different products, using different mixes of feed stocks and even producing different types of pulp.

Without determining the optimal product array here, the basic economic principles that drive these choices (and therefore the research priorities) are all familiar. Product Diversification and Market Influence wherein the producer or pulp industry collectively has some market influence beyond vulnerable price-taking positions and the value cycles among the various products are counter-cyclic, or obey a standard portfolio position.

Represented here are the basic micro-economic concepts that can be rewritten as a formal investment model. This way of treating the adaptable biorefinery may open new venues unexplored. Under favorable conditions that respond to the pulp mills as they are it may be possible to locate biorefinery conversions where initial outlays remain more modest, new value streams may be drawn from agriculture as well as from forestry, and pulp mill adaptations may be a platform able to add new products (extracted chemicals, fuels, hydrogen cells) as they come on line rather than depend on these breakthroughs to commence commercialization. Technical hurdles exist, but are perhaps less constraining than other technical hurdles to commercialization in the shorter time horizon.

2:30 - 3:00     Jacek M. Siry, Thomas G. Harris, Jr., Sara Baldwin, David Null, and Jose Gonzalez: "Global Competitiveness of the U.S. South's Linerboard Sector"

The U.S. South is the world's leading linerboard producer; this thirteen state region accounts for nearly a third of the global capacity. The linerboard industry takes advantage of ample fiber supplies and well developed industrial infrastructure. Rising trade and intensifying global competition, however, put the industry under increasing pressures to improve its competitive position. The industry is negatively affected by rising manufacturing costs, production shifts to countries of origin for imports such as China , and the development of cost-effective kraft linerboard alternatives such as testliner and kraft-top testliner. To assess the industry's competitive position, we examine its technological assets, manufacturing costs, and product markets. We find that the industry is about average in terms of technological assets and above average in manufacturing costs, which indicates that, in absence of any changes, the industry may experience increasing problems in retaining its leading position. We analyze virgin and recycled fiber costs and availability, investments in new capacity, and product standards and markets in search for solutions that would raise the competitiveness of the U.S. South's linerboard industry.