PRIVATE TOUR-Verso Paper
by Henry Garfield
Rolling with the Changes
The paper industry worldwide has been in flux. Verso Paper in Bucksport is rolling with the changes, in part, by finding new uses for old machines, and nurturing its competitive advantage.
To paraphrase Mark Twain, reports of the demise of Maine’s papermaking industry have been greatly exaggerated.
“On a ton-by-ton basis, the paper mills in Maine are producing more paper than at any time in the state’s history,” says Bill Cohen, director of communications and public affairs at Verso Paper’s mill in Bucksport. This may seem hard to believe in the face of much-publicized mill closings and job losses. But it’s a fact.
That the industry employs fewer Mainers than it did 20 years ago is a function of technology and changing world markets: The Bucksport mill employed more than 1,200 people as recently as 1990, and today, 740 people work there. Still, Maine’s pulp and paper industry directly employs some 7,500 Mainers. The Maine Pulp and Paper Association (MPPA) estimates that for each of these jobs, an additional 3.8 jobs are created for contractors and suppliers associated with the mills.
But competition is fierce. Much of the mill machinery in Maine dates to the 1940s. In Europe, China, and, most recently, South America (where fast-growing trees supply a steady stream of raw product), large new mills filled with modern equipment have opened. To compete, Maine’s smaller and older mills have been forced to become more efficient and to seek out niche markets.
“The lion’s share of everything we make is magazines and catalogs,” says Michael Haws, vice president of operations at the Bucksport mill. “We have one machine that we have been transitioning into lightweight packaging grades. The other three machines are making lightweight coated grades.”
“Maine mills could not compete in the newsprint area,” Cohen says. “Spruce and fir have a fiber that lends itself to lightweight coated paper. There’s a lot of spruce and fir in Maine. It’s for that reason we have a competitive advantage.”
Though this magazine isn’t, Cohen estimates that one of every four magazines on a typical newsstand is printed on Verso paper.
There’s been a paper mill in Bucksport for as long as most people living there can remember. Construction of the present-day mill began in 1928 on the site of a demolished tannery at Indian Point—a spit of land that juts out into the Penobscot River where it begins its last zigzag turn before spilling out into the bay. The land was then owned by Maine Seaboard Paper Company, and the mill’s first product was newsprint; the New York Herald Tribune was its largest customer.
In 1945, Time Inc. bought the mill and hired the St. Regis Paper Company to run it. The mill was converted from newsprint to the lightweight coated paper used in magazines—still its bread and butter today. A year later, Time decided that it didn’t want to be in the papermaking business, and sold the mill to St. Regis.
Champion International purchased St. Regis in 1984. In 2000, Champion was bought by International Paper, the largest pulp and paper company in the world, headquartered in Memphis, Tennessee. Verso is a spinoff company, 4 years old, created from International’s coated-paper division. In addition to the Bucksport mill, Verso owns the Androscoggin mill in Jay, Maine, and single mills in Michigan and Minnesota.
International’s vast land holdings in northern Maine were sold separately. Verso owns no woodlots in the state; instead, it contracts with suppliers.
“In the old traditional model of papermaking, when an asset reached the end of its life in that use, it was retired,” Cohen says. “If a paper machine was designed to make a certain weight of coated paper, and that market went away or was not profitable, that machine would get retired.” That idea didn’t set well with Michael Haws’ Maine pragmatism. “When Mike was at the Androscoggin mill, and International Paper wanted to retire a machine, he convinced folks that machine ought to make pulp. That machine now makes pulp for this mill. And so we’ve become integrated in that sense. There was an asset that IP intended to shut down and just do away with.”
Haws explains IP’s reluctance to hang on to older equipment. “The lightweight coated paper market has become more competitive with the advent of very high-speed, large machines,” he says. “If you go to Europe, for example, there are machines twice the size and half the cost making that paper as compared to us. As the market continued to grow, people justified business cases to build ultramodern equipment. To take vintage machines from the 1930s and 1940s and to continue to compete on scale is very difficult.”
Aging facilities throughout the state have had to adapt or close, according to John Williams, president of the Maine Pulp and Paper Association. The former Georgia Pacific paper mill in Old Town, for example, has repositioned itself by partnering with the University of Maine on a project to make fuels from materials discarded in the pulping process. The Sappi mill in Westbrook is now the world’s leading producer of “release paper,” used to create patterns on leather and polyurethane products such as handbags and car dashboards.
Seeking to get value out of old equipment, Verso made the decision to diversify. “We happened to have two pulp machines that had been upgraded a couple of times, but they were older, slower, more narrow machines,” Cohen says. “What could we do with those machines that wasn’t in those lightweight coated grades? And what we figured out how to do was to take the base sheet and use it in food-grade packaging. So today, if you buy a Splenda pack, that yellow paper that the Splenda is in is made here in Bucksport.”
Paper for food packaging has become another stream of revenue for the mill, and the old machines are moneymakers again. “What we’re doing is repositioning what historically were commodity-based assets into markets where they are competitive again,” Haws says. “Lightweight packaging is a whole different business strategy than lightweight magazine papers. We’re trying to take assets that really are high-cost producers in one business and reposition them in a business where they can be low-cost producers.”
But it’s no secret to anyone familiar with the Maine paper industry that there simply aren’t as many jobs as there once were. Modernization has come with a price.
“We’ve had to compete on a more global level,” Williams says. Upgrades in equipment have led to a reduction in the overall workforce. “A lot of the controls are now computer-driven,” he says. “You don’t have to have someone going in and controlling valves.”
“There are not as many layers in our company or in our mill as there once were,” Cohen says. “You start at an entry-level job, and very quickly work into an operator’s position. Some of the entry-level jobs are still fairly manual. But a lot of it’s been mechanized. Where we used to load these four-foot pieces of wood by hand into a grinder, that’s done by somebody operating equipment today.”
Mechanics and machinists are still very much in demand, and so are electrical and implementation (E&I) technicians, who can maintain computerized equipment. Today’s Maine paper mill is a fascinating blend of old and new technology.
“The jobs are much different than they were 20 years ago,” Haws says. “Technology has consumed the industry. We have high-speed cameras on our paper machines that can stop a defect that’s running 40 miles an hour and show you a picture of exactly what it looks like, so that you can solve that problem before you make more. We have quality control systems constantly online, so that the paper we make today and the paper we make next month is all the same. Expectations are higher. The purchaser sees a very consistent, high-quality product.”
Freight trains roll in and out along the tracks beside the river, but the wood used by the mill arrives by truck. It comes in tree lengths, but it’s not old-growth wood; the logs can’t be much larger than one foot in diameter. A machine removes the bark; the wood is then cut into four-foot lengths to be fed into the grinders—basically two immense stone wheels that grind the wood down to fibers, which are mixed with water. What emerges is a liquid white-pulp slurry with the consistency of watery oatmeal, the raw material for paper. This is poured out onto a moving horizontal screen, through which much of the water will drain. The fibers in the pulp provide the paper’s cohesion. It will stick together even when it’s still 80% water.
Most of the remainder of the process involves getting the water out. The paper is finished by a process called “supercalendering,” which involves running the wet paper through a series of rollers to increase its density and assure a uniform thickness. Heat is necessarily a part of the process. Some of the water is squeezed out, some is steamed out, some evaporates into the humid air inside the mill. When the water level is down to 5%, the coating that gives the paper its glossy finish is applied.
The largest machine at the mill produces a sheet of paper 300 inches wide, at a rate of 3,700 feet per minute. It’s an awesome spectacle to behold. The inside of the mill feels like a sauna and smells like an old photo darkroom; the sound of the machines is too loud to permit ordinary conversation. Many of the machine operators sit inside enclosed air-conditioned stations the size of a turnpike tollbooth. Metal tracks set into the concrete floor support the machinery that moves the massive rolls of paper from one place to another.
Customers don’t often order 300-inch-wide rolls of paper; the size is for the sake of efficiency. The mill’s other two coated-paper machines have a maximum width of 220 inches. Rolls are cut to customer specifications. Some of them will be loaded onto trucks, but most will go by rail.
The paper industry worldwide has been in flux. Verso Paper in Bucksport is rolling with the changes, in part, by finding new uses for old machines, and nurturing its competitive advantage.
“The rail brings in some of our clay and other coating materials, and that’s how we ship quite a bit of our material out,” says Haws. “The railroad is a key piece of what we do. It’s a big issue, because it’s cheaper to ship by rail. There are some short hauls where a truck makes sense, but there aren’t a lot of short deliveries from Bucksport, Maine.”
A roll of Verso paper weighs more than five tons. The ideal shipping situation, Cohen points out, is to load paper onto a rail car at the mill and ship it directly to customers with their own rail sidings. It’s impractical and expensive to transfer such heavy cargo en route. A rail car can haul close to 80 tons of paper, while a truck can haul about 20 tons. The Bucksport mill produces close to 50 tons of paper an hour. According to Kim Marshall of the Androscroggin mill, “In one day, the mill produces enough paper so that a 20-foot-wide sheet would stretch from Maine to Las Vegas.”
Maine’s place at the corner of the country can make distribution a challenge, both coming and going. One-way deliveries cost money. An empty truck is an unprofitable one. And even rail cars aren’t easily turned around, because most of the incoming product—clay and other coating ingredients—comes in tank cars, while the outgoing product—paper—goes out in boxcars.
“We are a long ways from where the consumers are,” Haws says. “There aren’t a lot of printing presses left in Maine. Almost all the volume of paper made in Maine leaves the state. We need to figure out how to do that economically and efficiently. The world’s going to ‘just in time.’ Nobody wants to carry a whole pile of inventory of anything.”
In late November, Verso announced the launch of a $40 million renewable energy project slated to be constructed during 2011. The centerpiece of the project is the modification of one of the mill’s boilers to burn waste wood and other biomass, eliminating most of the use of fossil fuels, including all coal- and tire-derived fuel. A small amount of natural gas will still be used to start up the boiler after it’s been idle, Cohen says.
The boiler will create steam to power a new 25-megawatt turbine generator. Steam is a valued commodity, because it is used both in the papermaking process and to generate electricity to run machines. “There’s a value chain in steam just like there is in anything else,” says Haws. “If you have it at high pressure, you can generate electricity with it at certain stages, certain pressures, all the way down to still having value to dry paper with at the end.”
Each of Verso’s two Maine mills can generate about 200 megawatts of electricity, which is substantial. The Bucksport mill, Cohen says, is a net exporter of electricity, meaning that it generates more power than it uses, and sells the excess to the New England grid. The Jay mill is “configured a little bit differently,” Cohen says, and buys power off the grid to supplement the electricity generated on-site.
In a 2009 report titled Maine on Paper: An Industry We Can’t Afford to Lose, Verso identified the uncertainty of energy prices as a major issue facing Maine’s mills. “The state’s aging power infrastructure and lack of diversified fuel sources help to keep energy costs high, which in turn creates a competitive disadvantage for Maine paper companies,” the report states. Both Verso and the MPPA support the creation of an LNG (liquefied natural gas) import terminal in the state.
The challenges faced by Verso and the other paper companies doing business in Maine are many-fold. One thing everyone seems to agree on is the skill level of the workforce.
“Maine’s skilled papermakers operate complicated equipment using technology and a mix of art and science,” states an October 2010 report from MPPA titled Facts about the Industry, Policy Recommendations for Competitiveness. “Technological advances and productivity improvements in the pulp and paper sector demand highly specialized training and education.”
But that workforce isn’t getting any younger. “The average age at this mill is 53,” Cohen says. “Somewhere close to 40% of our workforce will turn over between 2015 and 2017. These people out there on the floor are world-class papermakers. They’ve got skills and knowledge that have got to be quickly transferred to new people.”
Where does one go to prepare for work in the paper industry? “On the engineering side, it’s Orono,” Cohen says. “The University of Maine has a great program; the issue is getting them to stay in the state. For the production folks, right now it’s the Kennebec Valley [Community College (KVCC)] two-year program. We’re working with them and others in the state trying to figure out how to expand that so that more kids can get into it.”
KVCC provides a certificate program and a two-year associate of applied science degree in pulp and paper technology. The Maine Department of Labor also offers apprenticeship programs, according to the MPPA report.
Maine is the most heavily forested state in the nation, with trees covering approximately 90% of its land area. For generations, the forests have supported wildlife, provided recreational opportunities, and supplied raw materials to industry. They are also a living example of a 21st-century concept: sustainability.
“There’s been a big push to adopt sustainable forestry practices, some of it driven by us but quite honestly a good deal of it driven by our customers,” Cohen says. Major publishing companies like National Geographic are requiring that the paper they buy come from forests that are managed sustainably. Some 65% of the wood that Verso uses is certified sustainable by third-party sources; Cohen maintains that many other vendors are using sustainable methods but have yet to complete the certification process.
Verso is a founding sponsor of the Family Forest Alliance, which works to extend forest certification to family landowners. “We have to convince landowners to go sustainable,” Cohen says, “and in Maine, it’s been well-received. Practices in Maine are very good.”
Managed properly, Maine’s forests are a completely renewable resource. Already, more new trees are planted than cut in the state each year. By pursuing new sources of revenue and streamlining existing ones, by adopting sustainable practices and developing new green sources of energy, Verso Paper—and Maine’s pulp and paper industry—hope to be around as long as the trees.
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Company Brief: Verso Paper – Bucksport, Maine
Year founded: 2006
Paper mills owned: Four (two in Maine).
Creation details: Spinoff of International Paper’s coated paper division, it owns mills in Maine, Minnesota, and Michigan. Corporate headquarters are in Memphis, Tennessee. The original Bucksport mill opened in 1930.
Previous owners: Maine Seaboard Paper Co., Time Inc., St. Regis Paper, Champion International.
Products: Coated magazine-quality paper, food-grade packaging paper.
Employees (Bucksport): 740
Positions: Mechanical, electrical, and process engineers; machine operators, machinists, electricians, computer technicians, communications experts, finance professionals.
New projects: A $40 million renewable energy project slated for completion in 2011 will convert one of the mill’s boilers to burn biomass. Verso continues to work with suppliers on sustainable wood- harvesting methods.
Current challenges: Energy costs, an aging workforce, competition from overseas mills with newer equipment, distribution costs.
To learn more: www.versopaper.com
Tagged as: leading Maine manufacturers, Maine paper industry, Verso Paper
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