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Recovery Boiler Maintenance

There is an interesting phenomenon going on in the virgin pulp business in the United States. Companies seem to be universally stretching out their recovery boiler outages to eighteen months from twelve. Other than thinking they are saving a bit of money, no other reason seems apparent.

This is a bad idea. In general stock prices in the industry are in pretty good shape and we are earning a decent return. This is reminiscent of the early 1990's when companies announced they were going to not reinvest the value of their depreciation each year. All sorts of crazy reasons were given for this; what we ended up with were a pile of assets whereupon you could substitute the word "junk" for "assets." Of course, the geniuses that cooked up this scheme took their bonuses and retired, leaving the rest of us that love the industry to say, "What do we do now?"

There have been enough catastrophic accidents in the industry (not necessarily involving recovery boilers) that anyone thinking of stretching out recovery boiler maintenance should pause and think about what they are really doing. The insurance companies and the regulators also have a role here and should be exercising it vigorously. Nothing has changed about the metallurgy and the pyrotechnics of recovery boiler operation. We may have a few more sensors than we used to have, but the history on what they tell us is not well developed. I feel a catastrophe coming on.

Jim Thompson is CEO of Paperitalo Publications.

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