PaperAge Magazine

Nippon Paper Industries Agrees to Sell Port Angeles Paper Mill to Bio-Pappel

Port Angeles paper mill in Washington Paper production at Nippon Paper Industries' Port Angeles pulp and paper mill was curtailed in January for market-related conditions. However, the co-generation facility at the site is continuing to run.

March 2, 2017 - Nippon Paper Industries Co., Ltd. today announced the sale of the Port Angeles, Washington paper mill and cogeneration assets, which are owned and operated by Nippon Paper Industries USA Co., Ltd. to McKinley Paper Company.

McKinley is the US subsidiary of Bio-Pappel, a leading producer of paper and paper products in Mexico.

Terms of the deal were not disclosed.

Nippon Paper Industries noted that it acquired the Port Angeles mill in 1988 in order to produce and sell printing and writing papers including telephone directory paper. Although the operation performed well in sales and leveraged lightweight and high quality paper products mainly in the North American market for many years, it has recently been facing a challenging business environment due to diminishing demand for its products.

After conducting a strategic review of its global operations as part of its fifth medium-term business plan (FY2015-FY2017), Nippon Paper Industries concluded that the Port Angeles mill did not fit with its global strategy and objectives and began looking for an appropriate buyer.

The Port Angeles mill was built in 1920 and operated under the name Crown Zellerbach. Daishowa Paper of Japan purchased it in 1988 and later merged to become Nippon Paper Industries USA. The mill is a fully integrated pulp and paper mill with the capacity to produce about 325 tons per day of lightweight printing and specialty papers. The recycled deinked pulp mill was built in in the early 1990's and has the capacity to produce more than 200 tons per day of high quality recycled pulp.

In December of 2014, Nippon Paper curtailed production of the mill's No. 2 Paper Machine, and according to a recent news story in the Peninsula Daily News, Nippon Paper curtailed paper production on the mill's remaining paper machine as of January 21, 2017 for market-related conditions. However, the co-generation facility at the site is continuing to run.

Andy Grossell of Port Angeles, the Association of Western Pulp and Paper Workers Local 155 president at the Ediz Hook plant, told Peninsula Daily News that most of the 105 hourly workers have been laid off, and that about 20 to 30 employees are maintaining the plant and running Nippon's recently built $90 million-plus biomass co-generation plant.

Nippon Paper Industries expects the sale to close on March 31, and noted that “McKinley has an intension to sustain Port Angeles mill operation.”

McKinley Paper Company operates paper collection and recycling centers in New Mexico, Texas, Arizona and Colorado.

Nippon Paper Industries Co., Ltd. is one of the top 10 pulp and paper companies in the world. Founded in 1949, the company owns more than 160 group companies and 180,000 hectares of private timberlands.

SOURCE: Nippon Paper Industries Co., Ltd.