Abitibi-Price Inc.'s two newsprint mills, located in Grand Falls-Windsor and Stephenville, have worked aggressively to maintain their overall competitive position in the global marketplace. Investment in these operations over the last 10 years has totalled more than $220 million. Spending has improved pulping and papermaking systems; wood handling capabilities; and environmental protection systems. Roughly, 75 percent of the spending has been directed to making improvements at the Grand Falls mill, with the remainder to the newer mill at Stephenville. Within the Abitibi-Price organization, the Newfoundland mills are referred to as the International Business Unit, as they are charged primarily with serving offshore markets. As such, these mills are the first in the organization to feel change in international market conditions.

Both mills ship heavily into Latin America and Europe, producing standard, specialty and coloured newsprint. One of the mills' biggest customers is El Neuvo Dia in Puerto Rico. At times, roughly 10 percent of overall output has been shipped to this customer. Other major clients include The Guardian and The Kent Messenger in the United Kingdom; El Tiempo in Colombia; five press rooms in Japan; and several newspapers in India. The Times India Salmon contract is particularly interesting, as a salmon coloured newsprint is made to order. Some newsprint is also sold domestically for use in local newspapers.

Grand Falls Division

Situated on the Exploits River, this mill has the longest historical ties to the Province, first founded by the Anglo-Newfoundland Development Company in 1909. Today, the mill has the capacity to produce more than 200,000 tonnes of newsprint annually. Two machines are in operation using black spruce and balsam fir as pulpwood. For the most part, newsprint is shipped to market via ocean vessels loaded at nearby Botwood. Some of the strengths of the Grand Falls operation include the availability of good quality fibre; its use of modern pulping processes; and its ability to generate its own electricity.

From a marketing perspective, Grand Falls produces a clean newsprint (low in lint). This advantage is due in large part to the significant concentration of black spruce used in its manufacture. Spruce is touted as one of the best inputs for newsprint making because of its long fibres and high strength properties. The pulping technology employed at the mill is thermo-mechanical (TMP). TMP is chemical-free and produces a strong mechanical pulp, high in yield. Complementing this is the fact that the mill generates about 70 percent of its electrical requirement. Only four of the ten Abitibi-Price mills in North America can boast of this advantage, and this has been a significant contributor to the operation's bottom line, making it the lowest cash cost producer in the Abitibi-Price chain of mills. As part of its long-term strategy, Grand Falls has focused on several priorities to better position the mill in the marketplace. Activities have been restructured to improve efficiency and lower costs, and $15 million has been spent on a new effluent treatment system to meet environmental regulations. This year, the bulk of the almost $35 million allotted for capital spending will be used to upgrade the hydro generation and pulping systems.

Stephenville Division

Stephenville is the Province's most modern newsprint mill having come into production in 1981. Abitibi-Price purchased the former linerboard facility in late 1978 and spent approximately $80 million converting the operation to newsprint. Situated on tide waters, the mill operates one machine with the capacity to produce about 185,000 tonnes of newsprint a year. Modern TMP processes are also used by Stephenville, with a small amount of kraft pulp purchased to strengthen certain market orders.

One of the key strengths of the Stephenville operation is the fact that it is a relatively new production facility. This facility has been designated as the most efficient mill in the Abitibi-Price organization. Stephenville produces strong newsprint, consistent in thickness and low in weight. This is a plus as more customers are demanding lighter weight newsprint that holds up well through the printing process. From an environmental perspective, Stephenville has benefitted from a secondary effluent treatment system since its initial start-up.

This year the mill will continue to focus on reducing costs and improving product quality. Capital spending in 1996 is expected to reach about $15 million. A considerable portion of this expenditure will go towards paper machine and pulping system improvements.

Conclusion

Abitibi-Price Inc. is a major player in the Provincial forest industry, operating two mills which produce roughly half the newsprint exported from Newfoundland and Labrador. From a marketing perspective, the mills are international, serving customers around the world. As such, a focus must be maintained on changing demands in the international market. By watching costs, continually investing and making appropriate quality adjustments, the mills appear poised to maintain their position in the very competitive global newsprint market.