Noteworthy Newsflashes Winter 2018

Verso Expands Strategic Considerations to Include Sale or Merger

By Don Deckard, Forest Economist, Division of Forestry, Minnesota Department of Natural Resources (DNR)

January 16, 2018 (verso.com)—Verso Corporation (NYSE: VRS) announced today that the Strategic Alternatives Committee formed by its Board of Directors in September 2017, has, at the direction of the Board, expanded its evaluation of potential transaction alternatives to include other alternatives, including but not limited to, a potential sale or merger of the entire company. As previously announced, the Committee, with the assistance of Houlihan Lokey Capital, Inc., the company's financial advisor, has been charged with identifying and evaluating a range of potential strategic transaction alternatives to maximize value to Verso stockholders, and with recommending to the Board whether any potential transaction is in the best interests of the company and its stockholders.

Verso Corporation Expands Strategic Alternatives Considerations


Verso Seeks $1M Forgivable Loan for Upgrade to Duluth Mill

By Kristen Bergstrand, Utilization and Marketing Coordinator, Division of Forestry, Minnesota Department of Natural Resources (DNR)

January 17, 2018 (Duluth News Tribune)—Verso has asked the city of Duluth to seek a forgivable $1M dollar loan from the Minnesota Department of Employment and Economic Development (DEED). Verso Corp. is considering converting their recycle mill to process package-grade scrap paper into a type of pulp that can be used to produce brown paper grocery bags and corrugated cardboard products. Mill manager John Bastian states the conversion is needed because of the market decline in the paper products the facility currently produces. The city of Duluth could potentially offer almost $350,000 in additional forgivable loans for the conversion. Verso management is expected to make a decision on the $21 million expenditure to convert the recycle mill line sometime in March 2018.

Duluth could seek $1M forgivable loan for Verso paper mill upgrade


Meridian Launches Plans for Biomass Processing Facility in Minnesota

By Don Deckard, Forest Economist, Division of Forestry, Minnesota Department of Natural Resources (DNR)

December 6, 2017 (waste360.com)—Solid waste services company Meridian Waste Solutions, Inc. continued a flurry of recent activity with the announcement that its wholly owned subsidiary, Attis Innovations (formerly Meridian Innovations), has initiated commercialization plans for it first biomass processing facility in Minnesota. Attis will immediately begin feedstock evaluation and assess potential locations for commercial scale operations. In the past month Attis completed several acquisitions. It now holds an exclusive license to American Science Technology Corporation's (AST) patents and AST's biomass processing facility in Wausau, Wisc. Using the acquired intellectual property rights and personnel, Attis Innovations plans to take the next step and looks to build its first 60,000-ton per year commercial production facility in Minnesota. The company cited as an example that when used as a high-performance resin extender in thermoplastics, lignin brings a value of $600 to $2,000 per ton, depending on the performance requirements. Attis says it has begun evaluating potential feedstocks for conversion into pulp, cellulosic sugars and AST's melt-flowing lignin. Of particular interest it has identified hardwood and softwoods found in northern Minnesota as well as the agricultural crop residues from corn, soybean, and wheat growers found in the southern part of Minnesota. Collectively, the company estimates that Minnesota generates about 27 million tons of forest and agricultural residues each year in addition to having a living tree inventory of about 465 million tons.

Meridian Launches Commercialization Plans for Biomass Processing Facility in Minnesota


Tree Lignin Becomes a Value-Added Resin Used to Create Durable Plastic

By Kristen Bergstrand, Utilization and Marketing Coordinator, Division of Forestry, Minnesota Department of Natural Resources (DNR)

February 5, 2018 (NRRI News Release)—The Natural Resources Research Institute (NRRI) has found a way to utilize lignin and produce a bio-plastic that can be used to replace a petroleum-based plastic called "ABS plastic," used in many durable plastic commodity items such as car bumpers. NRRI and partners are working with a $3 million grant from the U.S. Department of Agriculture and plan to utilize the technology and research to develop composite siding and other products. The new technology to separate the cell wall compounds and produce the lignin-based resin greatly increases its value in the marketplace. Attis Innovations, Inc. is the company that will commercialize the technologies.

Unprofitable lignin to become valuable plastic


Wood Mass Timber Construction Lunch and Learn Opportunity: Products, Performance, and Design

By Kristen Bergstrand, Utilization and Marketing Coordinator, Division of Forestry, Minnesota Department of Natural Resources (DNR)

February 14, 2018 (WoodWorks)—Archie Landreman, Regional Director of Woodworks, will give a presentation on the types of mass timber products and there applications in building and design. He will talk about use in building with the current building codes and utilize examples from U.S. projects. Presentation is on March 14, from 9:30 a.m. to 12:45 p.m. at the Double Tree by Hilton in Rochester, MN. The cost is $20 and includes lunch. Preregistration is required as space is limited.

Mass Timber Construction: Products, Performance and Design


2018 Heating the Midwest Conference & Expo

By Kristen Bergstrand, Utilization and Marketing Coordinator, Division of Forestry, Minnesota Department of Natural Resources (DNR)

February 14, 2018 (Heating the Midwest Organization)—The 2018 conference and expo will be held at Black Bear Casino in Carlton, MN May 1 - 3 2018. The first day of the event will include tours of local biomass projects. The second day will include educational presentations on biomass thermal heating and cooling, vendor exhibits, and networking opportunities. The conference is a chance to meet a diverse group of professionals working in wood thermal energy and combined heat and power from around the Midwest region.

Heating the Midwest Conference and Expo


Kimberly Clark's Restructuring Plan Closes Two Plants in Wisconsin's Fox Valley Resulting in 600 Jobs Lost

By Kristen Bergstrand, Utilization and Marketing Coordinator, Division of Forestry, Minnesota Department of Natural Resources (DNR)

January 31, 2018 (Milwaukee Journal Sentinel) (Wisconsin Public Radio)—Kimberly Clark announced due to a global restructuring effort they will be closing 10 plants globally, eliminating as many as 5,000 jobs, and cutting approximately 12.5 percent of the company's workforce. Two of the 10 plants slated for closure are in Neenah and Fox Crossing Wisconsin. Kimberly-Clark makes Kleenex tissue and Huggies diapers is Fox Valley's third largest employer. Wisconsin has seen large losses in the paper industry with 15 mills closed since 1994 and 20,000 jobs lost since 2001. The Neenah plant will be closed within the next 18 months and employs 500 people who make personal care products like Depend adult diapers. The closure timeline for the nonwoven fabric producing plant in Fox Crossing that employs 110 people has yet to be determined. Kimberly-Clark will at this time maintain their other operations in Wisconsin.

Kimberly-Clark closing two Wisconsin plants, cutting 600 jobs, Milwaukee Journal Sentinel

Kimberly-Clark Plans To Close 2 Wisconsin Plants, Cut 600 Jobs , Wisconsin Public Radio


Flambeau River Papers Shuts PM3 on Declining Copy Paper Demand and High Wood Prices

By Don Deckard, Forest Economist, Division of Forestry, Minnesota Department of Natural Resources (DNR)

January 5, 2018 (pricecountyreview.com)—Flambeau River Papers today announced the shutdown of its largest paper machine and the subsequent termination of 82 employees at its paper mill in Park Falls, Wisconsin. According to a company statement, the copy-printing paper grades produced by paper machine #3 (PM3) are no longer a viable business. According to a mill spokesperson, the market for those paper products "crashed" this year, and the price of pulpwood—the raw material from which paper is made ? increased dramatically. Expected job cuts include 67 union employees and 15 management positions. Some employees were notified today of termination, while other positions will be eliminated during the coming weeks, according to the spokesperson. The mill will continue to operate two smaller paper machines that produce high-grade specialty papers. The closure of the largest machine will reduce the mill's pulp consumption by 100,000 tons annually.

Park Falls paper mill shuts down largest paper machine, reduces workforce


New Biofuels Plant Coming Soon to the Idled Paper Mill in Ontonagon, Michigan

By Kristen Bergstrand, Utilization and Marketing Coordinator, Division of Forestry, Minnesota Department of Natural Resources (DNR)

January 11, 2018 (Daily Globe) (Daily Mining Gazette)—Pat Tucker told the Ontonagon County Economic Development Corporation he expects a public announcement very soon on the construction and development of a $300 million dollar biofuel plant that will be located in a closed paper mill in Ontonagon, Michigan. SynSel Energy, Inc. is closing on the secured funds and while the process has been moving slowly it is progressing as planned. In pervious announcements the plant is expected to produce 250 direct and indirect jobs. In addition to those jobs the SynSel Energy, Inc.'s plant will require expansions to the local rail system and the local airport.

Biofuels plant development expected to begin at Ontonagon paper mill

Refinery project in construction financing stage

SynSel in The News


Wisconsin Expands Frozen Road Law Impacting Weight Limit for Logging Trucks

By Kristen Bergstrand, Utilization and Marketing Coordinator, Division of Forestry, Minnesota Department of Natural Resources (DNR)

January 18, 2017 (Transport Topics)—On January 6 the Wisconsin Department of Transportation announced that this winter the frozen road law would apply to the entire state, not just the regions located in the northern half of the state. Under the law, heavier loads of peeled or unpeeled forest products cut crosswise (not including woodchips), and salt and sand for winter maintenance are allowed for a period of time determined by weather conditions. The law applies to all numbered state and federal highways but does not apply to interstates except designated portions. The law is usually in effect from December until the loss of frozen ground conditions typically the end of February or early March. In 2015 3.7 million tons of forest material, valued at more than $550 million, moved across Wisconsin's roadways.

Wisconsin's Expanded Frozen Road Law Eases Weight Limit for Timber Haulers


Wisconsin Tree Farm Struggles with Tax Code not receiving a Small Business Designation

By Kristen Bergstrand, Utilization and Marketing Coordinator, Division of Forestry, Minnesota Department of Natural Resources (DNR)

December 1, 2017 (American Forest Foundation)—John and Janet Fisher, now retired, are working a tree farm in central Wisconsin. They have owned the farm since 1998 and envisioned that managing a tree farm would enhance their property and provide periodic income they could utilize for future property improvements. The Fishers enrolled their property in Wisconsin's Managed Forest Law program and joined the American Tree Farm program. They've planted about 20,000 trees on the property and view it as a small business. They generated income from thinning projects in 2011 and 2012. In 2012 using a certified IRS enrolled agent they filed their taxes as a small business. In 2014 IRS audited them because small businesses that don't make a profit within every 3 to 5 years are considered hobbies. The Fischer's disagree with the audit ruling, have appealed their case, and are looking for similar Tree Farm cases to show that Tree Farmers and private landowners operate like other farmers, which are small businesses.

WI Small Business Tree Farm Struggles With Tax Code


Michigan Forest Products Council calls for Forest Industry Litigation Reform

By Kristen Bergstrand, Utilization and Marketing Coordinator, Division of Forestry, Minnesota Department of Natural Resources (DNR)

Nov 17, 2017 (The Daily News)—Scott Robbins, director of forest policy for the Michigan Forest Products Council, supports the Fairness in Class Action Litigation Act, which passed the U.S. House of Representatives in March 2017. In an opinion printed in the Iron Mountain Daily News, Robbins states that the potential for frivolous class action lawsuits deter forest product companies from investing in the U.S. due to uncertain potential liabilities. According to Robbins, forest products markets are globally competitive and therefore litigation reform is needed to increase the states' odds of securing investment opportunities that may currently look safer in other countries. He states that the Act, if passed, could allow Michigan's largest rural industry to focus on changing from creating traditional forest products such as paper to creating more advanced building products such as mass timber and grow their most important renewable resource--wood.

Forest products industry needs litigation reform


Canada Won't Back Down, Vows to Resist Softwood Lumber Duties

By Don Deckard, Forest Economist, Division of Forestry, Minnesota Department of Natural Resources (DNR)

January 16, 2018 (bloomberg.com remix)( woodworking network)—Canada has initiated an appeal of U.S. softwood lumber duties with the World Trade Organization (WTO). The U.S. Department of Commerce imposed "amended" final duties earlier this month.
On January 3, the U.S. Department of Commerce announced the "amended" final determination of antidumping and countervailing duties on imports of Canadian softwood lumber. The combined final determination rates as announced by the U.S. Department of Commerce are:

  • Canfor 20.5%
  • Resolute 17.9%
  • Tolko 22.1%
  • West Fraser 23.6%
  • Irving 9.9%
  • All Others 20.8%

Moody's Canada expects benchmark lumber prices, which have increased about 25 percent over the past year, to remain high due to strong demand fueled by U.S. housing starts and post-hurricane rebuilding efforts combined with reduced harvest levels in British Columbia.

Canada won't back down, vows to resist softwood duties