Plans for US$25M warehouse for housing Kruger paper rolls at Virginia's Portsmouth Marine Terminal put on hold due to engineering concerns

LOS ANGELES , August 22, 2011 () – A proposal to build a US$25 million warehouse at the Port of Virginia’s Portsmouth Marine Terminal was shelved due to concerns regarding the ground under the planned facility and its ability to handle the weight of heavy paper rolls, HamptonRoads.com reported Aug. 19.

At the end of May, Glen Allen, Virginia-based logistics company CrossGlobe Group said it aimed to run a paper-and-pulp import-export business out of a 500,000-sq.-ft. warehouse to be constructed in 2012 at the terminal. On May 24, the Virginia Port Authority’s Board of Commissioners signed off on financing for a $25 million warehouse.

Montreal-based paper company Kruger Inc. inked a deal with CrossGlobe Group that entailed hauling approximately 150,000 tons of newsprint into the port annually, of which 40,000 tons would be directed to publications and the balance would be exported to India and Brazil, B.W. “Bill” Franks, president and CEO of CrossGlobe, said in May.

Engineers determined that though it’s technically possible to build the warehouse so it can handle the weight, the project would no longer be economically feasible, pushing the cost up 100% to $50 million, according to Joe Dorto, CEO of Virginia International Terminals Inc.

The newsprint is now being run through Norfolk International Terminals, according to Dorto.

Kruger currently has a three-year deal with Norfolk International Terminals but may not want to extend the contract when it expires, according to Franks.

Virginia International Terminals will be getting a second opinion about the engineering issue at the Portsmouth terminal, Dorto said. One alternative may be to situate the warehouse further back from the pier, he said, but qualified that by adding that being as close to the pier as possible is crucial when handling paper. Another option, Dorto said, would be to construct a covered underpass bridging the pier to a warehouse set back from the water.

The primary source of this article is HamptonRoads.com, Aug. 19, 2011.

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