Paper Made Cheaper and Cleaner

NORTHERN New Brunswick is one of the poorer parts of Canada. Traditionally a pulpmaking area, it is a place with plenty of trees, but not a lot of jobs. Now one company has capitalized on an old idea in papermaking to bring more work - and a cleaner environment - to the area.

Outside Newcastle, New Brunswick, on the shore of the salmon-rich Miramichi River, Repap Enterprises Inc. has built a $75 million demonstration plant that makes wood pulp using alcohol, rather than sulfur.

"This is the way of the future," says George Petty, chairman of the Montreal-based firm. "Making pulp with alcohol means clean, nonpolluting technology."

If the technique, successful in the small-scale plant also produces cheaper pulp in a full-scale plant, it could impact paper prices.

The demonstration plant itself feeds the pulp it makes to a modern coated-paper plant right next door. Coated paper is the stuff used to print news magazines. The technology also removes something common to the industry: the smell of rotten eggs - produced when sulphur combines with the air and forms hydrogen sulphide.

The process that Repap (paper spelled backward) uses is called Alcell, a name derived from the words alcohol and cellulose. The process uses alcohol and water instead of sulfur to break down wood into pulp. It was invented in Canada in 1972, sold to General Electric in the United States during the energy crisis in 1976, then bought back by Repap in 1984. It has never been made to work commercially before, but the firm hopes it can revolutionize the business.

Mr. Petty of Repap says building new pulp mills has become too expensive. The Alcell technology allows pulp producers to build a mini-mill, a size which cut costs dramatically in the steel industry.

"A new pulp mill costs $1 billion, and it demands an endless supply of wood. With an Alcell plant you can build a $350 million mill and keep it operating with a smaller wood supply," says Petty, who founded Repap in 1978. "That means a mill producing 350 tons of pulp a day instead of 1,000 tons a day. It also means a mill that can stay open in downturns."

Analysts say the Alcell process could be sold abroad, if it proves workable in New Brunswick.

"It's environmentally cleaner and the mini-mill concept will make it easier to build new pulp mills," says forest-product analyst John Duncanson. "The jury is out on whether it will work, but my gut feeling is that it will." Success for the process will mean it can actually produce pulp at a lower cost.

Repap plans to take its Alcell technology from its present 50 ton-a-day demonstration mill in Newcastle and put it in a new plant at Atholville, New Brunswick, about 100 miles north of Newcastle. It will be at the site of a plant that had been closed for more than three years when Repap bought it last December. Repap reopened the pulp mill and hired 500 workers. Some of them had been living on unemployment insurance or on small stipends paid to people in government retraining programs.

"Reopening the mill has given us jobs," says French-speaking Jean-Claude Duguay. The old mill recently began producing sheets of pulp.

Building the first full-sized Alcell mill in Atholville will cost $350 million. Repap intends to raise the money before the end of 1995 and start building it in 1996. The company loaded up on debt during the recession at the start of this decade. But high pulp prices have helped it dig out of what Petty calls "a four-year ditch."