Ecorr August 14, 2007


	August 14, 2007 Contents Out of the Box: Industry News News from TAPPI Sponsored by Additional Resources TAPPI BUYER'S GUIDE TAPPI CALENDAR OF EVENTS CORRUGATING INTERNATIONAL JOIN TAPPI For information on sponsoring this newsletter or other sponsorship opportunities with TAPPI, contact Eric Fletty at efletty@tappi.org or by calling +1 770-209-7535. Explore TAPPI's updated website for the latest in news, products and services, and all of your member needs at www.tappi.org. TAPPI assumes no responsibility for statements of fact and opinion; they are not intended nor should they be construed as a solicitation of or suggestion by TAPPI for any agreed-upon course of conduct or concerted action of any kind. Tell a friend to subscribe to TAPPI CI E-Corr or send a blank email to subscribe-ci_ecorr@list.tappi.org.	OUT OF THE BOX THE PACKAGING AND CONTAINERS INDUSTRY is doing very well so far in 2007 and is showing resilience after more than two years of unprecedented cost increases, according to a new Fitch Ratings report titled "Packaging and Containers: The Wrap-Up." The report provides a review and outlook for the sector, an in-depth discussion of raw materials and energy trends, and an analysis of the impact of the emerging sustainability trend on the packaging industry. Fitch's outlook for the packaging and containers sector remains stable for the remainder of the year. Although the industry is facing ongoing headwinds from energy and commodity prices, many packagers are improving profitability through price increases and improved efficiencies. In addition, some firms are strengthening their balance sheets through divestiture. A number of larger packaging firms are forecasting higher cash flows for 2007 and first-half results are showing evidence that this outlook is reasonable. Taken as a whole, Fitch believes the sector will show stable credit metrics for the year, with a few firms achieving measurable improvement in 2007 and into 2008. Energy and raw materials prices continue to be the variables of most concern for the sector. Raw materials remain above long-term averages so far in 2007, while oil has trended higher and natural gas has moderated somewhat. The "Packaging Scorecard" being implemented by Wal-Mart Stores could have a meaningful impact on the industry as the sustainability trend gains momentum. CASCADES INC., Kinsey Falls, Ont., will acquire Honeycomb Products of Michigan's honeycomb board mill in Grand Rapids, Mich. In making the announcement, Cascades noted that the acquisition enables Cascades Specialty Products Group to solidify its position as the second largest manufacturer of honeycomb board in the market and to increase its "green" industrial packaging product line entirely made from recycled paper. End-markets for honeycomb products include the packaging of furniture, household-appliances, and transportation industries. Cascades produces, converts, and markets packaging and tissue products made mainly with recycled fibers. CENTRAL LEWMAR, one of the largest privately held packaging distributors in the U.S., is being acquired by International Paper for approximately $185 million. The acquisition, expected to be complete within 30 days, will become part of IP's xpedx network of 105 distribution centers and more than 140 retail stores in the U.S., Canada, and Mexico. Serving 6,500 customers, Central Lewmar has annual sales of some $900 million and 400,000 ft2 of warehouse space. The company employs approximately 550 people at three hub centers, 22 offices, and 14 locations, including Strategic Paper Group, Whiteman Tower, Andrews Paper House of York, Buff-Pac, Central Lewmar International, Central Lewmar/MidAtlantic, Central Lewmar/Newark, Central Lewmar South, Automated Machine and Control, First State Paper, Geo. W. Millar, Marquardt & Company, McAliece Imaging Products, and eight PickQuick Papers stores. FBA (Fibre Box Assn.) reports that its new technical manager, Dave Carlson, is now available to help answer technical questions about the corrugated industry. Carlson's new job, FBA notes, is to provide timely and correct responses to technical inquiries from FBA members and non-members, industry customers, academics, government agencies, NGOs and the general public. At the start of his career in 1964, Carlson spent nine years with CCA in engineering and plant management. In 1973 he moved to Hoerner Waldorf/Champion International in Minnesota. When that company was acquired by Stone Container in 1986, his title changed to director of technical services, which he maintained until he retirement this past April. He also has been very active with TAPPI since 1978, having served as committee chair, Corrugated Division officer chair, and as a TAPPI Director. He has received the Corrugated Division's Leadership and Service and Technical awards and TAPPI's Distinguished Service award, and was also named a TAPPI fellow. He continues to chair TAPPI's Quality and Standard Management Committee and edit Corrugated International magazine. To contact Carlson with technical questions, e-mail him at dcarlson@fibrebox.org, or phone him at 847-364-9638. GEORGIA-PACIFIC has agreed to purchase the assets of Smurfit-Stone Container Corp.'s Brewton, Ala., white top linerboard and bleached board mill for approximately $355 million. The companies expect the transaction to be completed by the end of September. The Brewton mill has an annual production capacity of approximately 300,000 tons of white top linerboard and 190,000 tons of solid bleached sulfate (SBS). INTERNATIONAL PAPER announced that it will officially close its Terre Haute, Ind., containerboard mill on Oct. 1. IP had initially announced plans this past May to close the mill, based on a company study of options for strengthening its containerboard business. That study concluded Terre Haute's limited production capacity hindered the mill's long-term competitiveness. The company explored selling the mill, but, ultimately, the same limitations that made continued operations unfeasible made a sale unfeasible as well. The Terre Haute Mill employs approximately 170 people and annually produces some 200,000 tons of corrugating medium. The mill began operations in 1917 and was acquired by IP in 1998 as part of the company's acquisition of Weston Wabash Co. IN OTHER IP NEWS, the company has completed the purchase of the remaining shares of Compagnie Marocaine des Cartons et des Papiers (CMCP). IP announced on July 12 it had signed an agreement with its joint venture partner Cofipac to acquire their shares in CMCP for approximately $40 million. The Moroccan packaging company is now wholly owned by IP and will be fully managed as part of the company's European Container business. CMCP has approximately 1,500 employees and operates four box plants and one recycled containerboard mill in Morocco. CMCP produces corrugated packaging materials for the industrial and agricultural markets. In 2006, CMCP had sales of approximately $145 million. SMURFIT-STONE CONTAINER CORP.'s corrugated container manufacturing facility in Memphis, Tenn., recently received the Tennessee Governor's Award of Excellence for Workplace Safety in recognition of its safety achievements in 2005 and 2006. The Governor's Award honors Tennessee employers and employees who achieve a required number of hours worked during a calendar year without workplace injuries serious enough to cause a lost-time or restricted-duty incident. The number of hours is based on the number of employees. At the end of 2006, Memphis' 108 employees had completed 89 months without a recordable incident and 118 months without a lost-time accident. That's more than 419,000 man hours without a lost-time or restricted-duty incident. Smurfit-Stone's Memphis facility also earned the workplace safety award in 2002. IN OTHER SMURFIT-STONE CONTAINER NEWS, the company named John Lingle VP of its corrugated container division's sheet feeder region. In addition to leading the company's three sheet feeding facilities, he will focus on pursuing and developing alliances to strategically grow Smurfit-Stone's sheet feeding business. Lingle most recently served as GM for Smurfit-Stone's sheet feeder facilities. He was one of the founders of Innovative Packaging in Milwaukee, Wis. (acquired by Smurfit-Stone in 2000), serving as its president since its inception in 1997. Prior to that, he held various management positions with the former Stone Container Corp. and predecessor companies. KPS CAPITAL PARTNERS reports that it has completed selling its portfolio company, Blue Ridge Holding Corp., the parent of Blue Ridge Paper Products Inc. to Packaging Holdings Inc., an entity wholly owned by the Rank Group, for $338 million, subject to certain adjustments. Rank Group, headquartered in New Zealand, is owner of the Carter Holt Harvey group of companies, Evergreen Packaging (formerly the Beverage Packaging Division of International Paper), and SIG Holding (Switzerland). The transaction represents the seventh sale of a portfolio company by KPS over the past 14 months, and one of many complex, cross-border sale transactions that KPS has completed involving strategic buyers in Europe, Japan, and Greater Asia. SONOCO reports that it will immediately begin to repurchase 1.5 million shares of its common stock. The share repurchase will be made with available cash in open market transactions and is expected to be completed by the end of the current quarter. The shares are being repurchased under a five million share repurchase authorization previously approved by Sonoco's board of directors. Sonoco previously repurchased 1.5 million shares of common stock in February 2007 for $56.7 million. As of July 31, the company had 100,919, 886 shares of common stock outstanding. Sonoco is a $3.7 billion global manufacturer of industrial and consumer products and provider of packaging services, with more than 300 operations in 35 countries. NEWS FROM TAPPI New TAPPI Member benefit: Reduce Utility Costs Power Systems Group (PSG) -- TAPPI's new utility cost reduction affiliate -- is beginning a pilot program with converting operations to offer utility cost reduction services and energy industry information. These services will be offered on a pay-for-performance basis at a significantly discounted rate for TAPPI Members. This new benefit of TAPPI Membership can help converters achieve important savings in energy costs, and improve their "green" profile for even greater benefit. Benefits to the member's company include: Retrospective audit of possible past overpayments Discovery of options for savings going forward Detailed report showing all options for cost reduction. Unlock federal, state, local, and utility rebates and incentives Turn waste streams into profit centers No risk or upfront cost PSG will offer its utility cost reduction services to members of TAPPI at a special discounted rate. There is never any cost if no savings are found or implemented! For more information, and to receive the special TAPPI membership discount, contact gcampbell@psgenergy.com. TAPPI Press End-of-Summer Sale It's the end of summer and TAPPI PRESS has great deals for you. Save 50% on more than 100 titles during the 2007 PRESS Summer Sale! Rock bottom prices on many titles, including books, CDs and Virtual Seminars. Here are just a few of the titles: Corrugated Survey Book, 2005 TAPPI/FBA Coating, Converting and Specialty Processes Corrugator Roll Wear Measurement Focus on Quality Exciting World of Flexography CD-ROM Design & Production of Corrugated Packaging & Displays Visit the TAPPI bookstore for a complete list of sale books or call TAPPI PRESS at 1-800-332-8686 for more details. Final Call: Come golf with Chicago TAPPI! The Chicago TAPPI Local Section invites you to attend its Annual Golf Outing and Dinner Awards. The event will be held at Ruffled Feathers Golf Club in Lemont, Illinois, on Tuesday, August 21, 2007. Spend the day networking on the golf course; then enjoy dinner, the awards, and a grand prize drawing. Attendees are welcome to invite their clients as guests for the event. Full details are available at www.chicagotappi.com. The Chicago TAPPI Local Section's mission is "to build business relationships and promote the corrugated industry by educating our members through the exchange of new ideas and technical expertise." The group offers several educational programs per year, as well as the popular golf outing. Membership in Chicago TAPPI is encouraged, but not required. Great sponsorship opportunities are available for the Golf Outing and Dinner Awards - don't just play, let your company be an integral part of the event's success! 2007 CPC features "State of the Art" presentations The TAPPI 2007 Corrugated Packaging Conference and CorrExpo will take place October 30 - November 1, 2007, in Indianapolis, Indiana, USA, at the Indianapolis Convention Center. Approximately 400 of your industry peers, from box plants and corrugated converting companies across the country, are expected at these important events. The 2007 Corrugated Packaging Conference will follow the same format of hands-on training and problem solving that made the 2006 event such a success. Presentations will again concentrate on Corrugating/Corrugating Maintenance, Converting/Converting Maintenance and HRD/Safety. Special hour-long presentations will be added to the technical program this year, focusing "State of the Art Corrugating" and "State of the Art Converting." These presentations will be free to all box plant employees, even if they are not paid conference attendees. So plan to bring your problems and ask the experts to help you solve them! Learn more online, where you can also make an application to participate in the New Technology Showcase. Plan now for SuperCorrExpo®2008 The Largest Corrugated Packaging Machinery Show in the Western Hemisphere is on its way! AICC and TAPPI will present SuperCorrExpo®2008 on September 22-26, 2008 in Atlanta, Georgia, USA. To date, 129 exhibitors have already purchased almost 77,000 square feet of exhibit space-which they will fill with the newest products, hottest ideas, and best new services available. You will NOT want to wait another four years to be a part of it. Get a first hand look at all the excitement experienced at SuperCorrExpo®2004 by viewing the SuperCorrExpo® video. Or, read the 2004 show wrap-up published in E-Corr. Visit www.supercorrexpo.org to learn about sponsorship opportunities, conference registration, and more - then add that address to your favorites and check back for program updates. Corrugated Packaging Division Calendar of Events August 21, 2007 Chicago TAPPI Golf outing Ruffled Feathers - Lemont Info: kmsbox25@yahoo.com October 30-November 1, 2007 2007 Corrugated Packaging Conference and CorrExpo Indianapolis Convention Center and RCA Dome/Westin Hotel Indianapolis, IN September 22-26, 2008 SuperCorrExpo2008 GWCC - Atlanta, GA, USA

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