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Major moves by US industry The North American industry will take on a new profile as the biggest companies revamp themselves. — International Paper will no longer be the world’s largest paper company, once it has cut its holdings by $8 to $10 billion to focus on uncoated papers (it has 6.6 million tons of capacity at 14 mills around the world) and industrial and consumer packaging (it has 6.7 million tons of capacity for containerboard and coated board, and 128 converting plants in the US, Latin America, Europe and Asia. It bought Box USA in 2004). It will retain its distribution business, xpedx. IP will sell or spin off: its 50.5% stake in Carter Holt Harvey (already announced); the coated and supercalendered (SC) papers business including the Inpacel mill and associated assets in Parana, Brazil; the beverage packaging business, including the Pine Bluff, AR, mill; the kraft papers business, including the Roanoke Rapids, NC, mill; Arizona Chemical; part or all of its 6.8 million acres of US forestlands; the wood products business. Some mills will be converted to make new grades. Memphis, TN, may replace Stamford, CT, as the headquarters. Other major announcements about the same time (coincidentally, as second quarter results were released) included: — Kimberly-Clark will slim down by 6000 people. By the end of 2008, about 20 plants, or 17% of its worldwide total, will be sold or closed, another four facilities will be streamlined and seven others will be expanded as some production capacity is transferred to them. There is a particular focus on Europe. — MeadWestvaco will trim up to 850 salaried workers in a "revamp of its business model designed to save about $200 million a year." — Sappi will "reconfigure" its Muskegon mill affecting 450 jobs. No. 4 printing and writing machine will be shut and the heavyweight coated grades production shared between the mill’s No. 5 machine and machines at the Cloquet, MN, mill. The Muskegon pulp mill will be shut. In Canada: — Abitibi-Consolidated said it was continuing to cut capacity by shutting its Stephenville, NL, virtually closing the mill at Kenora, ON, by shutting down one machine and idling the other and putting its Fort William, ON, mill on the market. Lufkin, TX, may be restarted to make coated groundwood papers. — Paperboard manufacturer and converter Roman Corporation decided it would revise its capital structure in order to be more flexible and be able to prepay subordinated debt without penalty during 2005. — Tembec recently closed a small mill in Quebec producing machine finish coated and high-bright news grades. — In a slightly less dire move, Norske Canada will change its name to Catalyst Paper Corp. |
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