IP in talks with other parties, including a renewable energy JV, to use part of its Franklin, Virginia, mill site, where it recently completed conversion from paper to fluff pulp, for which global demand is growing about 4%/year

LOS ANGELES , August 13, 2012 () –

International Paper Co. (IP), which recently restarted part of its mill in Franklin, Virginia, to produce fluff pulp, is in talks with other parties--including a renewable energy joint venture--about using other parts of the mill site, reported The Wall Street Journal on Aug. 13.

The Memphis, Tennessee-based company, which is the world’s largest papermaker, invested US$90 million to reconfigure about one-third of the mill to produce fluff pulp. It would have cost $80 million to close down the mill.

IP began producing fluff pulp at the mill, which has a ltargeted output of about 840 tons/day, in in the week beginning July 1.

Another part of the mill is leased to a company that makes tissue products, and plans call for that operation to hire 85 workers, the Journal reported.

The Franklin mill is suited to making fluff pulp and shipping it overseas because of its large operations, southern location and proximity to a major port, said IP CEO John Faraci. In North America, fluff pulp is made from loblolly pine, a fast-growing tree that thrives in the U.S. South.

IP also makes fluff pulp at mills in Pensacola, Florida; Riegelwood, North Carolina, and Georgetown, South Carolina. Fluff pulp accounted for 2% of IP’s global sales in 2011, reported the Journal.

Among other papermakers who have expanded their fluff pulp capacity is Atlanta-based Georgia-Pacific LLC, which is already the world’s largest fluff pulp producer and is revamping part of an Alabama mill to produce more.

In 2012, Domtar Corp. converted part of its mill in Plymouth, North Carolina, to produce fluff pulp, the Journal noted.

Fluff pulp global demand has been increasing roughly 4% annually, with expectations of further growth in the future.

The Franklin mill used to make copier paper, but North American demand has declined in the computer age and North American capacity has plummeted in the past five years. Although copier paper demand is growing in Asia, North American producers cannot compete there.

However, increasing demand from Asian countries for more personal hygiene and baby care products is providing “a huge, huge opportunity,” said Rildo Martini, VP and general manager for pulp at IP.

World fluff pulp production capacity has reached 6.4 million tons, up from 4.5 million tons in 2007, according to industry consultant Rod Fisher, of Norwalk, Connecticut, reported the Journal.

The primary source of this article is The Wall Street Journal, New York, New York, on Aug. 13, 2012.


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