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A major Chinese paper company will add recycled pulp production lines at two U.S. virgin fiber mills it purchased earlier this year, and both will consume mixed paper and OCC.
ND Paper, the U.S. subsidiary of Chinese paper titan Nine Dragons, will invest $300 million in its recently acquired Biron, Wis. and Rumford, Maine virgin paper mills. The company will add three recycled pulp production lines producing 3,100 metric tons per day. One line will be installed at the Rumford facility, and two will go into the Biron mill.
Besides the pulp production capacity, Nine Dragons will also convert one paper machine at the Biron mill to produce corrugating medium and linerboard for containerboard manufacturing. One of the two pulp lines at the Biron mill will supply the containerboard machine with 700 metric tons per day of recycled pulp.
The move comes shortly after Nine Dragons entered negotiations to purchase its first U.S. recycled paper mill, in Fairmont, W.Va.
In an interview, Brian Boland, vice president of government affairs and corporate initiatives at ND Paper, said the Maine and Wisconsin mills will use a blend of mixed paper and OCC as feedstock. Boland said the company doesn’t yet know how much of each material it will consume at the mills. But whatever the volume, Boland noted that the facilities are well-positioned for sourcing, which will be coordinated by Nine Dragons’ purchasing arm, America Chung Nam.
Boland said material could come from a variety of major metropolitan areas. The Biron mill is relatively close to Chicago, Milwaukee and Minneapolis, while the Rumford facility is close to Boston, Montreal and Portland, Maine.
“The geography of these mills is pretty good to secure raw materials,” Boland said. “There’s opportunity to collect materials from a short distance away and keep our freight costs low.”
Excepting the 700 tons per day that will go to the converted containerboard machine at the Biron mill, the vast majority of the recycled pulp output will be shipped to China for internal use at Nine Dragons’ paper mills.
The investments will be carried out over the next two years. Out of the $300 million, $189 million is going to the Biron facility and $111 million to the Rumford plant.
Spurred by short-term shortage and long-term planning
The company has quickly gained a foothold in the U.S. market. The acquisition of the Maine and Wisconsin mills took place in May. In September, the company announced it was in negotiations to purchase the recycled paper mill in West Virginia. And just last week, Nine Dragons announced another pending purchase, this time of a virgin paper mill in Old Town, Maine. The Old Town facility is a virgin kraft mill that’s been idled since 2015, and Nine Dragons plans to restart it as an unbleached softwood kraft mill producing 275,000 metric tons per year.
The pulp capacity represents another significant milestone for the company’s U.S. presence. Once the three lines are added and the West Virginia mill is acquired, Nine Dragons will have total U.S. recycled pulp capacity of nearly 1.3 million metric tons per year.
Nine Dragons’ Asian operations have a capacity of 14 million tons per year across nine paper mills. Eight of those are in China and one is in Vietnam. They have struggled over the past year as the Chinese government imposed more and more restrictions on scrap material imports. Nine Dragons’ mills have been forced to take downtime, even as the company remains one of the largest scrap paper importers in China.
“With the Chinese waste paper restrictions, this helps us to secure a long-term source of fiber supply for those paper mills,” Boland said. Recycled paper pulp is not subject to the import ban in China, although as of Sept. 24 it is subject to a tariff that was first proposed in August.
But Boland noted that the investment is also about looking ahead and ensuring a stable supply no matter what happens with the Chinese import restrictions. The U.S. has solid paper recovery rates, he said, and the company has no reason to believe that will change.
Although it’s not handling recycled feedstock, the Old Town, Maine mill was purchased with largely the same purpose in mind, Boland said: to secure stable feedstock sources for the long run.
Photo credit: Giorgio Morara/Shutterstock