North American producer keeps growing with a $30M investment
Since last January, Cascades Tissue Group has held the proud title of operating the greenest tissue paper machine in North America at its Quebec mill in Candiac.
Since October 2010, Cascades Tissue Group has relied on Voith’s Atmos Technology to reduce its environmental footprint by consuming less fresh water during production and using 60% recycled fibre. With a global investment of $ 30 million and a financial contribution of $ 4.9 million from Investissement Québec, Cascades has been able to invest in the niche market of high-end products with its brand new Cascades EnviroMD Ultra.
"Like our range of premium products, which represents 30% of the market, Ultra represents about 10% of our market segment. This is a paper with significantly improved characteristics of softness, which costs more to produce in terms of machine time, but saves energy compared to traditional paper, while requiring fewer chemical additives, "says the CEO of Cascades Tissue Group, Suzanne Blanchet.”In addition, we achieve these features with a significant contribution of recycled fibre, unlike the competition that makes Ultra quality toilet paper with virgin fibre. "
Blanchet, despite a very busy schedule, hosted Le Maître papetier at her Candiac office on April 29. The catalyst for the accelerated expansion of Cascades Tissue Group, (especially since Cascades acquired Perkins Papers in 1995), Blanchet has a background in accounting and made her debut at Cascades in 1978. One year after her arrival, she was appointed controller at Cascades Industries, a specialized mill in tissue paper manufacturing. She became executive director in 1985.
After quadrupling Tissue Group’s sales, Blanchet managed the expansion of Cascades in the U.S. with the company’s first acquisition of an American enterprise. She also actively contributed to the entry of Cascades on the retail market in 1992, a sector characterized by a strong competition.
After the acquisition of Perkins Papers, Blanchet became Executive Vice President, with a specific mandate: increase the company’s profitability. In 1997, Blanchet was appointed CEO of Perkins Papers, making her one of the few women to hold a strategic position within a multinational company.
Today, Cascades Tissue Group operates 18 North American mills; eight in Canada (including the Candiac headquarters) and 10 in the United States. With a production of 263,000 short tons in 2010, Cascades Tissue Group is the second largest player in Canada and holds 32% of the market, just behind Kruger with 37% of the market. In terms of production capacity in North America, Cascades Tissue Group (595,000 tons) is the fourth largest producer, Procter & Gamble (1.3 million tons), Kimberly-Clark (1.5 million tons) and Georgia-Pacific (2.4 million tons). Blanchet manages a mill network composed of about 2,000 employees, with global sales of $ 858 million, or 22% of Cascades total sales last year ($ 3.959 billion).
The TAD equivalent
For its machine upgrade project, a "fast track" type project which took only nine months to complete (see additional text on the project progress), Cascades Tissue Group has set its sights on Voith and it’s Atmos technology. This is a North American first, as the only other paper manufacturer to use this new technology is in Chile. Unlike its competitors, Cascades did not choose the real TAD process (Through-air-dried) but the so-called TAD equivalent or TADe.
"The TAD process is used by most paper manufacturers for the production of high-end tissue paper, but each has its variations: Georgia-Pacific uses the eTAD, while Kimberly-Clark refers to its manufacturing process as the UCTAD (for uncreped TAD)” explains Blanchet. “It is the exact same technology but prepared with a homemade sauce! Here we chose a hybrid TAD process, operating at low velocity and temperature, allowing the production of a highly structured sheet of tissue. A conventional manufacturing process is largely based on the molding of the sheet of tissue paper, but Atmos works on the dry end of the machine and can achieve a higher dryness of the sheet on presses with the inflow of hot air and suction provided by the system. The Atmos hybrid process also allows for the production of tissue in a conventional manner. This flexibility allows for easy movement from one range to another. This project brought the current paper machine a second life, but it also enabled some job consolidation at the mill and helped ensure its long-term competitiveness.”
But why produce high-end toilet paper and paper towels, when we are talking about convenience products? And ultimately, what does “high-end” stand for? "Just because it is the market trend," says Blanchet. "Procter & Gamble started the trend 15 years ago with its very absorptive Bounty paper towels, with a structure not easily altered by liquids. Then came the Charmin toilet paper, which also set a new standard. Generally, high-end tissue paper absorbs better as it is softer, thicker and more bulky. There is a real demand for these products, and we wanted to quickly take advantage of this trend to invest in the market while improving our performance and our product range. These products are intended for the retail market (2 / 3) as well as institutions such as office towers and hotels (1/3). Unlike the retail market, which is seeing robust growth, the institutional market is characterized by slow, but stable growth.”
Current and future challenges
For Cascades Tissue Group, one more challenge makes no difference. The company is already up for the environmental hurdle by using recycled fibre in its products and constantly decreasing its water usage. In 2010, Cascades used an average of 12.4 m3 of water per metric ton of paper produced - five times less than the average for the Canadian paper industry for the same period (60 m3). Cascades Tissue Group recently highlighted the contribution of 23 customers and distributors from the institutional segment, whose purchase of nearly 1 million crates of tissue paper made of 100% recycled fibre saved 580,684,397 litres of water last year - the equivalent capacity of 232 Olympic pools! This year, Cascades chose water management to demonstrate its environmental contribution because it represents one of the top ten concerns shared by organizations when making purchase decisions. In addition, Blanchet confirms Cascades’ 2010-2012 sustainability plan forecasts a further reduction of water consumption over the next two years.
If the environmental variable is relatively easy to control, it is not the case for fibre costs and the value of the Canadian dollar. When asked which variable pains the company the most as of late, Blanchet confirms without hesitation the cost of recycled fibre, which nearly reached $300 a ton compared to $125 two years ago. "The stronger Canadian dollar actually helps Americans bring their products into Canada. So we have to deal with this additional competition. In terms of our sales in the United States, the strength of the dollar has less impact because we are more of a producer than an exporter." Blanchet notes the recent increase in paper tissue prices should help better contain these costs fluctuations.
As for future challenges, Blanchet remains discreet about her medium to long-term goals. "First we will maximize the use of the newly modernized paper machine. Then it would be interesting to have a second Atmos machine. The time and place still need to be determined," she adds. The company is also looking into new products. This was the case in 2010 with the IntelligentMC antibacterial paper towel from Cascades. Launched after the H1N1 vaccination campaign, the product is experiencing a slow start. "There is still education to do, admits Blanchet, particularly in the health community, mainly using alcohol gels. But the disinfectant in it, alcohol, evaporates -unlike in Cascades’ antibacterial paper, which lasts for 30 minutes. It is now available to the consumer market under the name Cascades DefensiaMC "
Will the company’s expansion happen with business acquisitions, and if so, where? "Cascades is present elsewhere in the world and this presence could increase. We are looking into South America, especially Brazil, where a lot of interesting things are going on. But it’s only observation for now, " Blanchet cautions.
TADe Technology: an implementation success in just nine months
When the first TADe roll of paper towels rolled off the paper machine at the Candiac plant in November 2010, only nine months had passed since the upgrade project was initiated.
Looking to capitalize as quickly as possible on the trend of high-end products, Cascades Tissue Paper engaged a somewhat ‘slower track’ project. Following the agreement with Voith in November 2009, the plant proceeded with an initial 33-day shutdown in August 2010, in order to install the equipment. The machine started up in conventional mode on September 10, 2010, only to stop for another seven days in October. The first roll of TADe paper towels TADe was produced on October 31 and the first roll of toilet paper was churned out less than two months later. The tight schedule was strained in August 2010 during the stevedores’ lockout at the Port of Montreal. The machine equipment was stuck at the port for several days because of the conflict.
At the plant, the amount of work required was considerable and many of the machine’s components were replaced. "We recovered guard-boards, showers, the save-all, the wet end and the press, the Yankee and vaporcowls. Everything else has been upgraded including the winding section, which received a new Master Reel, "explained Jean-David Tardif, director of the Candiac mill for the past four years and team manager of the modernization project. "However, the pulp now goes through a new headbox working by wet molding, which results in a more structured sheet in the press rolls section. "
"The biggest changes are found at the suction level (suction pumps were added), and with the number of rolls and showers. We find 2.5 times more of those on Atmos than on a conventional machine, "says Tardif. "With serious space constraints in terms of machine length, we had to go with a more vertical design, so that a press section can be found on the lower floor of the factory. "The result is a higher dryness rate at higher speed presses. And the paper produced has all the softness and absorption characteristics of an Ultra paper quality."
As part of the modernization project, the B conversion line of the Candiac mill will get a $1.5 million upgrade in July. Included in the projects is a robot wrapper that will improve speed and flexibility, especially for the preparation of high-end products sold in the U.S. "Since the acquisition of Atlantic Packaging two years ago, and with the conclusion of the TADe machine project, Candiac’s role tends to be more focused on manufacturing high-end products," says Tardif.