The new owners of Terrace Bay's pulp mill say the conversion of the northwestern Ontario plant appears to remain on schedule to begin next year.
Rayon maker Aditya Birla of India is planning to convert the former Buchanan pulp mill into a specialty pulp operation for use in its global operations to make rayon for textiles.
The operation, known as AV Terrace Bay, gives the company access to surrounding woodlands to produce dissolving wood pulp, a critical ingredient for its viscose staple fibre (VSF) business.
“We’re working through the testing of the fibre and the pre-engineering work with regards to the conversion,” said Giovanni Iadeluca, CEO of AV Terrace Bay, with much of that testing being done at Birla's lab in Sweden.
Iadeluca said the abundance of softwood in the fibre basket in the northwest is much different than any other fibre they use in Canada and the world.
“We've spent a lot of money, and will continue to do so, to ensure we have an understanding of what technology is going to be best deployed to be able to achieve a dissolving grade quality that is consistent and equal to the best in the world.”
The property was under creditor protection in 2012 when Birla acquired the shuttered pulp mill. It had been run by the Buchanan Group of Thunder Bay, which purchased the operation from Neenah Paper in 2006.
Birla is a multi-national Fortune 500 corporation with rayon manufacturing operations in India, Indonesia and Thailand, Birla is the world's largest maker of viscose staple fibre. It has two operations in New Brunswick.
The Terrace Bay conversion represents a $250-million investment. The conversion is expected to be take between two-and-half to three years with final completion sometime in 2016.
But in the short term, the company elected to keep making conventional kraft pulp.
“We’re running pretty hard at the mill,” said Iadeluca. “We’ve got a great team, as well as in sales and marketing, who have done exceptionally well at leveraging the volume here into the market.”
The mill won't be completely gutted during the conversion. The additional equipment that will arrive is mostly for the digester area.
How the entire dissolving pulp process works is considered proprietary information, said Iadeluca.
But at startup in 2016, the mill's workforce of 360 will produce 800 tonnes of pulp per day.
“There’s going to be a lot of our pulp that’s going to be for internal customers,” said Iadeluca, specifically for Birla mills in Asia and Europe.
A percentage will be sold on the open market. On the fibre side, the company has a wood allotment of 1.6 million cubic metres. Some area First Nation communities are doing the harvesting.
More fibre will come from wood chips bought from local sawmills.
How the product will get overseas is still a matter for discussion.
No longer is there direct rail along the north shore of Lake Superior from Terrace Bay to Thunder Bay and its large port facility.
“It's something that we’re looking at right now. We've got conversions with the port authority and we're taking a look at other viable options,” said Iadeluca. “That’s a few years away so our team is focusing on the technology and the equipment.”
One of the company's biggest challenges has been to find the source of their frequent power outages. Since Birla acquired the mill, they've had four interruptions.
“Once there's an outage in a mill our size it costs hundreds of thousands of dollars to start up,” said Iadeluca.
Company officials were to meet with Hydro One representatives last month to diagnose the problem. Eventually the company has plans to install a $20-million turbine powered by steam produced internally to generate 40 megawatts. It will make the operation close to self- sufficient.
Iadeluca hinted that the mill could be utilized as a research and development platform.
“The mill has been, in the past number of years, involved really on an operational focus.
“We’re looking to make some changes and look at the other value streams that we could have out of the mill. As we’re deploying new equipment and technology into the mill, we're looking at what is it that we could do differently to provide some bio-type profile to our mill.”