PT Paper Corp. plans $25 million investment in 2017

Allison Arthur, aarthur@ptleader.com
Posted 2/21/17

Since buying Port Townsend Paper Corp. in 2015, Crown Paper Group executives estimate that $30 million of capital has been pumped into improvement projects and another $30 million into maintenance …

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PT Paper Corp. plans $25 million investment in 2017

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Since buying Port Townsend Paper Corp. in 2015, Crown Paper Group executives estimate that $30 million of capital has been pumped into improvement projects and another $30 million into maintenance projects.

And they’re not done with making changes to a business that has been the largest private employer in Jefferson County since 1928. The mill employs 280 people and most of them live in Jefferson County.

“In 2017, we plan to invest an additional $25 million in capital and maintenance upgrades and improvements,” said Steve Klinger, Crown Paper Group CEO. “In addition, we are evaluating multiple potential major upgrades for the next several years. We are committed to continually improving this mill and building its long-term value.”

Two of the projects that mill owners say put the aging paper plant in a good position for the future include the completion of the Boiler Maximum Achievable Controlled Technology (MACT) compliance project, and the conversion to using compressed natural gas (CNG).

It cost the mill $3.1 million to make the conversion in the fall of 2016. The mill became the first large manufacturer in the state to switch from oil to CNG. The CNG conversion should reduce greenhouse gas emission levels by 25 percent and save on fuel costs over time.

The mill requires about five truckloads of CNG a day. Each truck holds about 355 million standard cubic feet of gas.

FUTURE MARKETS

For now, Port Townsend Paper Corp. sells the container board it produces to internal customers of Crown Corrugated Co. and Montebello Container Corp., as well as to external customers in primarily western states, Klinger said.

“These markets are growing modestly, and we expect growth to continue with upside as we increase production capacity through focused investments,” Klinger said, adding, “Over the last two years we have been moving towards container board.”

In addition to container board, which is used to make boxes, the mill also makes kraft and specialty paper.

“We sell kraft paper primarily to domestic customers in the Northwest and western U.S. and Canada. These markets are flat to declining. Over the last two years, we have produced less kraft and more container board,” he said.

Another third of what the mill makes is unbleached kraft pulp, which is exported primarily to Asia.

“These markets are flat with volatile pricing that recently declined,” Klinger said. “However, we expect prices to recover and we see positive long-term prospects. Here again, over the last two years, we have produced less kraft and more container board.”

Klinger said the Trump administration appears to be focused on foreign currency issues, “which are relevant to us as Canadian and other foreign currencies that are stronger versus the U.S. dollar help our export business.”

“Beyond that,” Klinger said, “regardless of their political party of origin, public policies that improve economic conditions benefit our business.”

ODOR AND WATER

Perhaps the two biggest community issues for the mill are the historic telltale odor that most paper mills are known for and the mill’s use of water.

“When Crown Paper acquired the mill, we took action to address the odor issue, including accelerating settlement pond remediation,” said Klinger, who added that the number of odor comments have “decreased dramatically.”

In 2016, a Seattle law firm, Terrell Marshall Law Group PLLC, mailed out a solicitation to Port Townsend residents asking people to participate in a class action lawsuit against alleged “noxious odors” emitted by the mill. Klinger declined to comment on that threat.

In 2016, the state Department of Ecology received 244 odor complaints about the mill, down significantly from 2015, when it received 445 odor complaints related to the mill, according to Andrew Wineke, Ecology communications manager. In 2014, there were 567 complaints, and in 2013, there were 340 complaints.

The availability of water is one of the most important issues to the mill. In 1928, production at the mill began just one day after water from a new pipeline became available, and by 1929, the mill had started using a second paper machine, considered the largest kraft paper machine in the world at the time, according to the mill’s historians.

The mill also faced a drought situation in 2015. In that year, as well as in 2016, mill officials decided to reclaim water by using water cooling towers.

“In 2017, based on snowfall and rainfall, we expect water conditions to be better going into the summer,” Klinger said.

By agreement with the City of Port Townsend, the mill helped build 100 miles of the city’s water system and continues to this day to maintain the system in exchange for water.

The deal with the city was set to expire in 2000, but was renewed in 1983, modified, and extended until 2020.

ENVIRONMENTAL AWARD

Mill officials are proudest of an award the mill earned in 2016 from the Northwest Pulp & Paper Association, which presented its 2016 Environmental Excellence Award to Port Townsend Paper Corp.

“When we first started tracking greenhouse gas (GHG) emissions in 2005, we were emitting about 153,000 metric tonnes per year,” explained Kevin Scott, engineering and environmental manager for PT Paper. “We are now less than half that, reaching about 61,000 metric tonnes in 2014.”

Scott said that the award is exciting because º“it’s significant for us to be recognized for this achievement, especially in a group of our peers.”

Colin Fernie, president of Port Townsend Paper and Crown Packaging, agreed and also recognized the work of employees in the achievement.

“Three hundred employees of Port Townsend Paper accomplished this. We appreciate the recognition and are committed to continued environmental stewardship,” Fernie said of the 2016 award.

(Editor's Note: This story part of Peninsula Proud: Leader Progress Edition, published in The Leader on Feb. 22)

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