future prospects for usa pulp and paper technology prospects for usa pulp and ... –economics do...

NC State University NC State University

Future Prospects for USA Pulp and Paper Technology

Richard B. Phillips, PhD

Student TAPPI Summit

Raleigh, North Carolina

January 20, 2012


Main Points

1. USA very competitive with Rest of the World in Pulp and Paper – Both Cost and Profitability

2. Biggest issue for USA Paper and Board Industry is shrinking Demand – We are becoming more export oriented

3. World will face shortage of softwood fiber for paper

– China’s growth in packaging will require more virgin softwood fiber

– OCC supply will become tight

– Growth of absorbent pulps will divert softwood pulp supply from paper

– USA – Southeast well positioned to participate

4. What will be required for a new softwood mill to be built?

NC State University

USA Competitive Costs

$0

$10

$20

$30

$40

$50

$60

$ p

er H

ou

r

Hourly Labor

$0

$50

$100

$150

$200$

per

BD

FT

of

Pu

lp

Transportation to Shanghai

Source: FisherSolve®

$0

$50

$100

$150

$200

$250

$ p

er B

Dt

Softwood Chips

NC State University

466 473489 494

519530

556569

621

497512

594

621

686

849

467

681

702 705

846

Total Cost and Cumulative Production

Cumulative Production, FMT per Year (x1,000,000)

0 2 4 6 8 10 12 14 16

Co

st,

US

D p

er

FM

T

0

100

200

300

400

500

600

700

800

900

0

Canada

Chile

China

Finland

Russia

Sweden

United States

Softwood Market Pulp USA Cash Cost Delivered to Shanghai very competitive

with all except Russia

4 Source: FisherSolve®

Canada Chile

China

Finland

Russia

Sweden

USA

Canada biggest producer of softwood market pulp USA minor player in

paper pulp

NC State University

Dominant in Fluff Pulp Market Both Cost and Fiber Properties

651

321

344357 358 366

377387

399 404 409 417436 439 447

460

Mfg. Cash Cost and Cumulative Production

Cumulative Production, FMT per Year (x1,000,000)

0.00 1.00 2.00 3.00 4.00 5.00

Co

st,

US

D p

er

FM

T

0

100

200

300

400

500

600

700

800

0

Argentina

Finland

Sweden

United States

Source: FisherSolve®

Southeast USA owns the fluff pulp market

NC State University

Fluff Pulp Demand Growth to Continue Mothers want their babies in disposable diapers

0

1,000

2,000

3,000

4,000

5,000

6,000

2009 2010 2011

Airlaid/Other

Adult Incontinence

Feminine Hygiene

Disposable Diapers

Source: RISI

NC State University

USA Corporate Returns competitive with Latin America and superior to ROW

Figure 13. Profitability of Major Pulp and Paper producers (Source: PriceWaterhouseCoopers “Global Forest, Paper and Packaging Survey”, 2012). (A) EBITDA Margin and (B) Return on Capital Employed

Source: PriceWaterhouseCoopers “Global Forest, Paper and Packaging Survey”, 2012

% EBITDA Margin % Return on Capital Employed

NC State University

Biggest issue for USA is declining demand Consumption of Paper and Board increasing in Asia

and stagnant to declining in the West

Asia account for ~ 50% of world Consumption Source: RISI

NC State University

Exports have not been a major factor for USA but they will be

Source: RISI

Exports are 17% of Production

NC State University

Production of Paper and Board is Local …

10

Shortage

Excess

2010

Relatively good Regional Balance

NC State University

… And will remain so in 2020

11

Shortage

Excess 2020

North America and Western Europe will become larger exporters

NC State University

Purchased Softwood Pulp Must Grow Softwood Pulp will likely be in significant shortfall

12

Shortage

Excess

Shortage in Asia not balanced by Excess produced elsewhere

2020

NC State University

Asia currently imports 25 Million Tonnes of waste Current collection rate of ~50%

13

Shortage

Excess 2010

Waste for Asia comes principally from North America and Western Europe

NC State University

Shortage grows to 35 Million Tonnes in 2020 If recovery rate grows to 64%

14

Shortage

Excess 2020

Waste availability from North America and Western Europe cannot grow because local consumption of P&B declines


Main Points

• USA very competitive with Rest of the World in Pulp and Paper – Both Cost and Profitability

• Biggest issue for USA is shrinking Demand – We are becoming more export oriented

• World will face shortage of softwood fiber for paper – China’s growth in packaging will require more

– OCC supply will become tight

– Growth of absorbent pulps

• What will be required for new softwood pulp capacity to be built? – Economics do not favor construction of new softwood capacity

– But prospects could change by incorporating biomaterials and bioenergy into scope of new mill

NC State University

Abundant Softwood available in SE USA

16

Export Wood Products

Pulp and Paper

Fuel Wood

Logs

Timber

Wood Pellets

30 Million Hectares 3.4 M3 / Ha / Year

Annual Growth ~ 100 mm M3 per Year Annual Removals ~ 80 mm M3 per Year

90% of harvest takes place on 10% of the forest

Saw logs 31,446,920

Veneer logs 4,721,578

Pulpwood 30,842,966

Composite products 4,133,231

Fuelwood 582,053

Posts, poles, and pilings 799,650

Miscellaneous products 703,356

73,229,755

All USA Forest Products Domestic Demand Falling Except wood pellets

Source: USDA FS RPA 2007

NC State University

Modern Kraft Mill

17

Woodyard

Pulp Mill Chemical

Plant

Pulp Line

• Roundwood • Sawmill Chips

• Kraft Cooking • Low Energy

• Turpentine • Tall Oil • Pulping / Bleaching

Chemical Prep

• Pulp Drying • Pulp Bales for Shipment

1

2

3

4

5

• High Pressure • 50% Excess Power • Black Liquor > 85% • Hog Fuel 15%

Power Plant

NC State University

Characteristics of Modern Kraft Pulp Mill

18

1,000,000

Woodyard $119,826,634

Pulp Mill $312,398,638

Caustic Plant $204,870,330

Evaporation $139,684,316

Recovery Boiler $377,829,924

Power Boiler $102,787,517

Turbogenerators $108,156,996

Machines $433,187,011

Chlorine Dioxide Plant $103,043,210

Infrastructure $99,143,913

TIC (USD 2016) $2,000,928,488

ADMt per Year

Southeastern USA

Greenfield Pulp Mill Investment

NC State University

Net Present Value (10%) requires unrealistic price for Paper Pulp

19

-$1,093,797,253

-$573,472,970

$276,900,247

Price Escalation

Net Present Value at 10%

Analysis is based on southeast United States with the lowest softwood pulpwood price in the world

Source: Author

NC State University

Chip Pile

Chipping Debarking Roundwood

Receiving

Sawmill Chips

Pulp Wood

Kraft Pulp Mill integrated with Bioenergy and Biomaterials

Chemicals Extraction

Chipping

Extraction

20

NC State University Chemicals Extraction

Chip Pile


Receiving

Sawmill Chips

Pulp Wood

Extraction


Chip Screens

Auto Hydrolysis

Enzyme Hydrolysis

Purify

Ferment

Sawdust

Wood Chips

Lignin

Pelletizer

Bioproducts

21

Cellulose Lignin

Chemicals / Materials


Chip Pile


Receiving

Sawmill Chips

Pulp Wood

Extraction


Chip Screens

Pre-Cook

Wood Chips

Kraft Cook

Hemicellulose Extraction

Bioethanol, Foams/ Gels

Turpentine Collection

Turpentine

22

NC State University

Debarking

Pre- Cook

Lime Kiln

Power Generation

Kraft Cook

Caustic Plant

Recovery Boiler

Pulp Washing

Evaporator Plant

Tall Oil Production

Tall Oil

Power


Biomass Boiler

Natural Gas

Chemical and Energy Recovery

23

NC State University

Debarking

Pre- Cook

Lime Kiln

Biomass Gasifier

Power Generation

Kraft Cook

Caustic Plant

Recovery Boiler

Pulp Washing

Evaporator Plant

Tall Oil Production

Power

Lignin Plant

X


Tall Oil Production

Tall Oil

Biomass Boiler

Natural Gas

Lignin Recovery

24

NC State University

Pre- Cook

Lime Kiln

Kraft Cook

Caustic Plant

Pulp Washing

Evaporator Plant


Biomass Gasification

25

Biomass Gasifier

NC State University

Chemrec Black Liquor gasification – biodiesel production

26


Chip Pile


Receiving

Pre- Cook

Lime Kiln

Biomass Gasifier

Power Generation

Kraft Cook

Caustic Plant

Recovery Boiler

Pulp Washing

Turpentine Collection

Evaporator Plant

Tall Oil Production

Oxygen Delignificatn

DEo+pDP Pulp Dryer

ClO2 Plant

Biological Treatment

Pulp Bale Line

Natural Gas

Sawmill Chips

Tall Oil

Turpentine

Power

Pulp Wood

Makeup Chemicals

Hemicellulose Extraction

Bioethanol, Foams/ Gels

X

Lignin Plant

X X

Fluff Pulp

Biodiesel

SBSK Pulp

Recovered Lignin

Extraction

Kraft Pulp Mill integrated with Bioenergy and Biomaterials 27


• Asia has become overly – dependent on cheap Recovered Paper that will become scarce and expensive in the future

• New softwood capacity will be needed to provide fiber to Asia

• Softwood capacity difficult to justify financially – bioenergy and biomaterials integration may make it work

• USA – Southeast a strong contender for a new mill 28


Questions?

29

future prospects for usa pulp and paper technology prospects for usa pulp and ... –economics do...

Documents