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Adapt or Perish
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UPM has announced it will be closing mills and reducing capacity in Finland and Germany, and selling one mill in France.

The mills being closed include Myllykoski in Finland and Albbruck in Germany. A paper machine at the Ettringen mill also will be closed, and the Stracel mill in France will be sold, or otherwise removed from paper production.

Meanwhile, NewPage is looking to sell the Port Hawkesbury mill in Nova Scotia, Canada, in an effort to avoid bankruptcy.

Reading those lists is like receiving sad news of former coworkers.

During a decade of travel, I visited and wrote stories about many of those and other mills (such as the Burnie mill in Australia, which closed last year). At the time, the industry and suppliers were transitioning through a period of mergers and consolidations, down-sizing and rationalizations. Diversified companies decided they needed to focus on their core business and started shedding non-core businesses and holdings.

Through the last few decades, the industry has transitioned from a somewhat reliable, cyclical, and largely domestic market. Globalization, the rapid shift away from print media to electronic communications, and the collapse of the housing market have transformed the industry and altered the economic rule book.

China has transitioned from being the customer for used and dismantled paper machines to being the prime investor in new mills and machinery. That has been good news for some suppliers, helping to compensate for a decline in major orders and new construction in North America.

Adaptability is a key factor in survival. Sometimes that simply means finding new uses for an existing mill. Last year, International Paper closed its mill in Franklin, Virginia. The mill had been producing uncoated freesheet (and coated paperboard). This year, IP is repurposing a portion of the mill to produce fluff pulp, and is hiring 212 workers.

For towns heavily dependent on one industry, surviving the loss of that primary employer can be especially difficult. Two years ago, Tembec closed its newsprint mill in Pine Falls, Manitoba. Some of the mill’s 200-plus workers retired, some moved away. Approximately 80 former mill workers managed to find jobs at the relatively nearby Bissett gold mine. The community has survived, but the town has lost nearly half its tax base.

As the industry and economy continue to evolve, it might be worth considering an often-quoted observation of Charles Darwin: "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change."

A Consultant Connection Member at your service: HurterConsult Inc. - Consulting Engineers for Pulp, Paper, Fiberboard & Cellulosic Biofuels from Nonwood Fibers, Wood, Wastepaper & Purchased Pulp | Resource, Market & Feasibility Studies, Engineering Solutions & Technical Advisory Services | Bob Hurter (613) 749-2181



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