Study Group: Timber and Forest Industry Consultants

GLG News^SM Analyses by this Study Group's Leading Experts(?)

Tasmanian BEK Market Pulp Mill Back On Track

November 17, 2009

Analysis by:Dave Hillman, Independent Consultant,

Analysis of:GUNNS SAYS IN TALKS WITH SODRA ABOUT BELL BAY PULP MILL PROJECT | www.paperage.com

Four years after the initial announcement this mill is finally showing signs of becoming a reality. Financial markets have improved and now underwriting the US$1.7 billion project is no longer such a challenge.Having Sodra as a joint-venture partner proved to be the catalyst.This mill will produce 1.1 million mt of Bleached Eucalytpus market pulp for India, China and other SE Asia countries. This is most welcome in light of the new paper machines being installed.

Domtar Follows IP Lead In Reducing UCF Overcapacity

October 25, 2009

Analysis by:Dave Hillman, Independent Consultant,

Analysis of:Domtar To Convert Plymouth, NC Mill To 100% Fluff Pulp | www.paperage.com

Domtar has made a positive strategic move to reduce its UCF (uncoated freesheet) capacity at a time when this paper grade is shrinking. At the same time it is increasing its position as a Fluff Pulp producer - a market that many estimate is growing 6-7%/year.The Plymouth mill will, by the 4Q of 2010 be producing 444,000mt/year of Fluff PulpThey will reduce UCF production by 210,000. This follows IP announced shut down of their Franklin, VA mill which produces 600,000st/year.

IP Leads In Capacity Reduction

October 23, 2009

Analysis by:Dave Hillman, Independent Consultant,

Analysis of:International Paper to Shut Down Three Mills | www.paperage.com

IP has said there is excess capacity in both containerboard and uncoated freesheet (UFS). Now they've made a significant move to correct this situation by shutting down 3 papermills. plus one large machine in Oklahoma.Containerboard capacity was reduced by 2.1 million mt. Uncoated Freesheet by 600,000tpy. Coated paperboard (SBS) by 140,000 typy.The mills are located in Franklin, VA, Albany,Oregon, Pineville, LA and the one paper machine in Valliant, OK

Woodchips: a global commodity with a bright future.

October 9, 2009

Analysis by:Dave Hillman, Independent Consultant,

Analysis of:Global Trade of Wood Chips Down 26% in 2009 | www.paperage.com

WRI has published an excellent overview of the global aspect of wood chips as a strategic benefit to those pulp mills in countries where forest resources are limited.Even though tonnage shipped is down 28% in 2009 the benefits assure this business of growing substantially as economies get back to normal.As market pulp prices increase and energy becomes more expensive, it will prove beneficial for all pulp mills to maximize production-in many cases from purchased chips, especially softwood.

Newsprint's a Problem Even in China!

October 2, 2009

Analysis by:Dave Hillman, Independent Consultant,

Analysis of:Norske SKog to Sell Hebei Mill in China for RMB 925 Million | www.paperage.com

If newsprint was to be a growth paper grade anywhere in the world it was thought to be China with its 1.3 billion people. However, Norske Skog could not make either of its mills profitable during the last 4+ years.. They are now exiting the Chinese market.Hebei had a production capacity of 330,000mt/year of newsprint. Shandong Huatai will take over the Zhaoxian mill which will make them China's largest producer of newsprint. The deal will be finalized by the end of 2009

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