Corner Brook Pulp and Paper Limited has demonstrated a clear commitment to the newsprint industry in the Province as reflected in its capital investment program. Over the past decade, the Company has improved its pulping and papermaking systems; enhanced its wood handling capability; introduced recycling technology; and made environmental improvements. These investments have, for the most part, increased product quality, productivity, and helped to solidify market position for the Company.

Corner Brook Pulp and Paper operates the Province's largest newsprint mill, producing about half of the newsprint exported from the Province. Situated near the mouth of the Humber River in Corner Brook, the mill has direct shipping capability. The mill's biggest customers tend to originate in the United States where historically about half of its product has been sold. Other major markets include Western Europe, South America and Asia. Specifically, newspaper customers include The London Daily Telegraph; The Boston Globe; and The Philadelphia Enquirer. Closer to home, newsprint is also sold to some local newspapers.

Some of the Company's competitive advantages include its use of modern pulping technology, quality fibre, and its ability to produce its own electricity. Quality fibre together with input advantages presented by efficient pulping allows the mill to produce newsprint of good opacity. This means that print on one side of the paper does not interfere with print on the reverse side. Also, the ability to generate about 70 percent of its electricity requirement helps reduce costs.

The Corner Brook mill has a longstanding history, dating back to the 1920s when it was commissioned by the Newfoundland Power and Paper Company. Kruger Inc., of Montreal, parent company of the current operators, purchased the mill in 1984. Kruger's commitment was evident at the outset, as an extensive modernization program was immediately initiated. This program, together with other investment over the years, has totalled close to $400 million. Today, the mill is a four paper machine operation producing newsprint from balsam fir and black spruce.

One of the biggest components of the modernization program was the adoption of the latest in pulping processes. The mill has spent $93 million on TMP conversion, and improved screening and cleaning procedures over the years. When Kruger purchased the mill, various pulping technologies were being employed including sulphite, stone groundwood and thermo-mechanical pulping (TMP). Over the years, the new owners have converted the entire mill to TMP.

Another significant portion of Corner Brook's investment (about $112 million) has been directed toward its paper machines. Improvements have included twin wire formers, presses, reels and winders. These projects were primarily designed to improve product quality and to a lesser extent, productivity. This year alone the mill will spend a further $20 million on its machines. The largest project, completed in March, was the modernization of the No. 7 machine, the newest and largest machine at the mill. Downtime on No. 7 was required in March to perform this work. These latest improvements to No. 7 have increased the mill's potential output from 355,000 to 375,000 tonnes.

Recycling was introduced at the mill in 1992 with the opening of a $6 million facility. The plant uses unprinted wastepaper backhauled from markets along the eastern U.S. and shipped from local recyclers. The recycling facility has the capacity to produce enough pulp for 160 tonnes of newsprint per day. From a marketing perspective, this move helps the mill to fill orders to the U.S. which demand a certain content of recycled fibre.

The Company has also spent $54 million on environmental improvements. The largest project was the $43 million installation of a new bark burning boiler to replace the old two boiler system which released sulfur dioxide and wood fibre emissions into the air. The new boiler became operational last year and is used to produce steam to operate mill machinery. Another major environmental project, aimed at meeting water regulations, is a new secondary effluent treatment system costing $23 million. Work on this system started in 1995 and should be completed around mid-1996.

Conclusion

Corner Brook Pulp and Paper Limited has invested heavily over the last 10 years in its papermaking assets in the Province. Currently, the mill is benefitting considerably from the turnaround in the global paper market. Capital spending for 1996 is budgeted at around $45 million. The current up-cycle in demand and prices has allowed the mill to continue its environmental upgrading and effect productivity enhancements. This reflects the mill's commitment to improve its competitive position in the marketplace.