Presentation to International Mechanical Pulping Conference THE HYP ALTERNATIVE. May 6 9, by F. A. Dottori President FADCO Consulting Inc.

Transcription

1 Presentation to International Mechanical Pulping Conference THE HYP ALTERNATIVE May 6 9, 2007 by F. A. Dottori President

2 The Challenges Ahead 1) Evolution of Tembec High Yield Pulp 2) Quality Characteristics 3) Economics 4) Environmental 5) Issues Going Forward 6) Conclusion 2

3 1) Evolution of Tembec HYP started up 100 K T/yr. SW HYP in Temiscaming -Fibre: SW - Brightness: Targetted Market: tissue & towelling 3

4 1) Evolution of Tembec HYP HYP in rolls - Mix chemical/hyp: 30/70 - Brightness: 80 - Targetted Market: tissue, towelling, diapers 4

5 1) Evolution of Tembec HYP HW HYP -Fibre: Aspen - Brightness: Target: Paper producers, board High Bulk / Low Fines - Fibre: SW, HWD, Mix - Optimizing of fibre performance 5

6 1) Evolution of Tembec HYP Hi Bulk Maple -Fibre: Maple - Brightness: 85 - Targetted Market: Board, middle ply Started up Temcell 2 new line 100 K T/yr. Started up Temboard 200 K T/yr. 6

7 1) Evolution of Tembec HYP Hi Strength / Bulk Birch - Fibre: Birch - Brightness: 87 - Targetted Market: Paper producers - Blends of fibre - Different freeness levels - Tailor-made for specific customers 7

8 1) Evolution of Tembec HYP 1995 to date - Continuous improvement - High bulk development - High brightness - Brightness stability - Anionic trash reduction - Increased strength - Cleaner - Energy reduction 8

9 1) Evolution of Tembec HYP Today: - Production: over 2000 T/D - Low cost / competitive - Tailor-made - Hi-tech. Pulp furnish 9

10 2) Quality Characteristics Some key characteristics of HYP are: 1) High Bulk (more than double) Aspen Birch Birch Bulk Maple SWK HWK Recycle 10

11 2) Quality Characteristics 2) Higher opacity, better formation Aspen Birch Maple HWK SWK 11

12 2) Quality Characteristics 3) Higher absorption rate / quantity (10minutes) Aspen Birch Maple HWK SWK 12

13 2) Quality Characteristics 4) Advantages compared to Kraft Paper Board T/T Absorption Bulk Hold-out -- Formation -- Int. Fibre Board -- Compressibility -- Smoothness Softness Stiffness -- 13

14 2) Quality Characteristics 5) Brightness reversion / performance Pulp Fiction: Acidity of Paper making is a problem for all pulps No problem if alkaline Post 120 Min. HWK 0.8 Birch 2.4 More, but not significant Performance zero span loss HWK 4.5 Birch 4.3 Similar 14

15 2) Quality Characteristics 6) Print Quality Better with HYP because of higher fines, opacity, compressibility of fibres gives better print results. 15

16 2) Quality Characteristics 7) Strength Not as strong as Krafts overall, but can be modified to be similar in some characteristics, depending on enduse. 16

17 3) Economics 1) Papermaker HYP saves up to $100/T for paper and board manufacturers. This is significant! How? - increased filler for opacity, cheaper than fibre - less OBA or TiO 2 clays for opacity - lower basis weight due to bulk (10%) - energy savings very important in future (freeness to customer spec.) 17

18 3) Economics 2) Canadian Producer Costs USD/T HYP SWK HWK Fibre Same $/ADMT Chemicals Electricity HY no Cogen Energy (fuel) Kiln, dryer Finishing Materials Ref./Other Total Variable

19 3) Economics 2) Canadian Producer Costs USD/T HYP SWK HWK Variable Daily & Fixed Total Mill SG&A Depreciation Size $/T Ttl. Production Costs Freight Total Delivered Selling Price Margin Target

20 3) Economics - Relatively little difference on economic return - Looks like pulp producers need extra $100 per tonne to have a viable business in all cases - HYP offers distinct economic advantages to customer - energy - fibre characteristics for customer Price for HYP should be closer to HWK price. The differential should be approximately $50 if splitting advantages of fibre and energy savings between producer and consumer. 20

21 4) Environmental Zero Effluent - HYP mills can be zero effluent two already exist - Eliminates environmental issues (water, air, solids) - Green product renewable resource - Less wood per tonne of paper saves trees - No use of chlorine or chemicals with residual footprints - No GHG contributions - Consumers and producers can use Natural Fibre strategy to promote products. 21

22 5) Issues Going Forward - HYP is a Major electrical power consumer (cost risk?) - Brightness stability to be improved need R&D - Growth of Eucalyptus HYP will happen - Environmental advantages (see above) - New technologies to reduce power need to be developed (solvents, new chemicals?) - Differential to HWK needs to be reduced to reflect advantages of HYP - Industry needs to take a leadership role in developing uses for HYP 22

23 Conclusion At this time, HYP costs do not provide economic advantage compared to Kraft for a producer However, HYP can be customized and can provide significant energy and capital costs to pulp consumer, and should give HYP better economics in future Where to energy costs? This is the risk factor. Strong need to improve turnover $Sales / $Capex for HYP mills. Too expensive now. Mini-mills for $ K T/yr? Let s do it. 23