Hot show hints industry is warming up: the mood at the SPCI pulp and paper exhibition often provides a guide to the industry's direction--and this year was no exception.

Yet again, splendid sunshine and high temperatures ushered in visitors to this year's SPCI paper industry exhibition in Stockholm, Sweden. The tri-annual event attracted 964 exhibitors, down somewhat from the 1121 recorded in 1999, but the organizers were nonetheless happy to keep the figure as high as that given the industry backdrop and current economic conditions.

SPCI has grown steadily since its launch in the late 1960s to become the largest such event in Europe--and possibly worldwide. As such, it is normally a good barometer of the health and optimism of the pulp and paper sector. On that basis, anecdotal evidence suggests that most suppliers believe they have weathered the worst of the economic storm, with many hoping for better news--and firm orders--toward the end of this year and beyond. In fact, although visitor numbers looked to be down on the last SPCI, several exhibitors appeared to be quite happy with their prospects.

NEW ORDERS

Despite a sluggish period for the paper industry, a number of suppliers used the event to announce new orders and unveil myriad new products and upgrades. Everything from the humble valve to state-of-the-art new paper machine designs got their 15 minutes of fame as a host of marketing pieces, press releases, and promotional gimmicks fought for their share of the popular consciousness.

Since the exhibition coincided with the first week of the World Cup in Japan and Korea, many of the booths featured soccer-related themes with penalty shoot-outs for the visitors. Games and re-runs were screened on stands around the halls. A number of the exhibitors even got dressed up in shorts and soccer strips (uniforms), which proved to be a good call when temperature and humidity rose inside the hall.

BACK IN BUSINESS

Along with the fun came some serious business. Among the most intriguing was the re-emergence of Kvaerner's pulp and paper division as an aggressive player in the sector. The supplier has been active in fiberlines, power, and recovery boilers for some time, but struggled in recent years as financial difficulties at the group prompted the company to announce that it would sell off its pulp and paper interests.

However, with the appointment of Helge Lund as president and CEO in January of this year, it appears that the sell-off is off and pulp and paper is again a core business of the group. As Lund stated, "It wouldn't be exaggerating to say that the company was almost bankrupt last fall. But we've had a massive restructuring--in fact, probably one of the most complex restructurings seen in Europe in recent years--and we're making steps in the right direction. A lot of people left last year, but I hope we've turned that around now and we've left our problems in the past."

As Lund conceded, the company had chased volume at the expense of profitability in the past, but he is looking forward to a new era under the leadership of Athol Trickett, the new president of Kvaerner's pulp and paper division. Trickett foresees strong potential in North America, where the average recovery boiler age is far older than Europe.

NEW FORMS

For ABB, the theme was "creating an entirely new business." Dinesh Paliwal, newly appointed head of the industries Division at ABB, is adamant that suppliers need to do more than just deliver and maintain equipment in the plant. "It's not about a new sensor or a new scanner any more; we have to do things differently," he said. "In recent years the paper industry as a whole has made less than a 30-year U.S. Treasury bond and that's just pathetic. What we want to do is drive asset utilization higher and push the whole industry higher along with it for our customers."

As such, ABB is working on a range of initiatives designed to foster closer collaboration between customers and the supplier in a bid to drive profitability for both. This has taken ABB's pulp and paper division into a new realm where the company is working alongside financial companies and other suppliers. As Paliwal explained, "We want to be sitting down with customers and saying "how can we take 10%-15% of the costs out of the supply chain, rather than sitting there talking about a 5% or a 10% discount on a piece of equipment."

SPCI is frequently the scene for new product launches, and that was the case for Experion PKS, a new offering from Honeywell. According to the supplier, the new Process Knowledge System "manages process knowledge through a combination of advanced technologies, industrial domain expertise and Six Sigma methodologies to realize untapped results that cannot be achieved through traditional architectures." This is a big move for the supplier; since it will provide the future direction for all the company's solutions.

Honeywell noted that the system incorporates a (DCS) distributed control system, advanced control methods, asset management, and information management technologies. These are designed to operate with knowledge driven decision support and diagnostic tools embedded in the Experion PKS that allow mill staff to focus on improving profitability rather than routine process maintenance.

KNOWLEDGE NOTES

Knowledge and knowledge management could well have served as the themes of the exhibition as far as suppliers were concerned. Indeed, the IT systems integrator, TietoEnator, even had a lunch seminar base, on its experiences of working with UPM-Kymmene. TietoEnator was instrumental in helping the paper company to integrate its mill execution systems with SAP's R/3 system. The IT group has already rolled out the system in nine mills in Finland and further work is ongoing.

Even the more traditional paper machinery suppliers are becoming heavily IT focused today. The big two--Metso and Voith--are both devoting formidable resources to the area and process and business knowledge integration is playing a major role in driving innovation across the sector.

For example, Metso used the SPCI event to launch a new system that provides instantaneous full-sheet measurement in the wet end-IQInsight.

There is ample scope for new developments on the process side, too, as Metso demonstrated with the news that it had received the first order for its OptiSpray coating concept for use on a printing paper line. Although the buyer remains anonymous at this time, the order comprises a double-sided coating station, TurnDry air dryer, and coating color preparation and supply systems. According to the supplier, the process facilitates the development of new paper grades as well as the improvement of paper grades produced using traditional methods.

Metso also used the event to announce a host of new orders. Among the most interesting were a new 200,000 metric ton/year board making machine for Sun Paper in China and a chemical handling system for a new 200,000 metric ton/year line for Kruger Wayagamack at the Trois-Rivieres mill in Quebec, Canada. The latter order for the company's PaperChem unit will be delivered as part of the larger Online OptiConcept LWC line order, where the unit is set to start up late in 2003.

Voith Paper took the opportunity to run through a couple of its recent projects on PM 11 at SCA Laakirchen in Austria, where the work on the 360,000 metric ton/year SC-A machine was completed five weeks ahead of schedule; and M-ReaPs BM 1 rebuild at the Agnekoski mill in Finland, which was completed within a short eight-week shutdown.

Here again, simply selling equipment was deemed insufficient for today's competitive environment, underlining a shift in attitude sweeping the industry. As Voith president and CEO Hans Muller pointed out, "Return on capital employed in the industry has been less than 10% around the world and we have to help get that up to 15% or so."

BONDS AND ORDERS

Andritz used SPCI as a platform to highlight a number of its recent achievements. According to CEO Wolfgang Leitner, sound financial management and the recently completed Ahlstrom deal have "allowed the group to make a successful issue for Eur 100 million bond, which will help the company optimize the structure of its balance sheet.

This comes on the back of a strong 2001 for the group, when it achieved among the best results recorded in its history. The company also went into some detail on the deal it has signed with UPM-Kymmene to supply the world's largest recovery island for the Wisaforest pulp mill in Pietarsaari, Finland. Other recent orders have included the woodyard and chemical recovery plant for Arauco's new Valdivia mill in Chile, a second TMP plant for the Solikamsk mill in Russia, and a refiner rebuild project for Holmen Paper's Hallsta mill in Sweden.

According to Leitner, these contracts and the group's focus on the high value-added service sector should see Andritz enjoy more financial success in the future. "And we are looking at acquisitions in both the capital and service areas," he noted.

SOME OPTIMISM

With almost 1000 exhibitors in attendance at SPCI, it is impossible to mention all the news and events that took place over the course of the show. While many companies were undoubtedly suffering under the weight of the industry downturn, there definitely seemed to be enough cautious optimism around to ensure that the show went off with smiles all round.

Whether that optimism will turn out to be justified remains to be seen. But at least one thing can be revealed with absolute certainty-Brazil went on to win the World Cup.

MEETINGS IN PROGRESS

Meetings are a part of life these days and SPCI is no exception. The event attracts a broad range of visitors, but the meetings staged in Stockholm always provide additional attractions for pulp and papermakers, This year, TAPPI got in on the act, holding its first ever Board of Directors meeting outside North America in conjunction with SPCI.

Among the many debates, forums, receptions, and conferences organized during the show, the Control Systems and the New Available Technologies conferences probably threw out some of the most fascinating titles. Attendees wrestled with topics as diverse as online capillary alectrophoretic measurements of ions from waters of pulp and paper mills and dryer section passivation. But along the way, there was also ample room for important insights into the paper business and where it is headed in the future, such as the comments from SCA's Sverker Martin-Lof about total efficiency and staying focused on margins.

Overall, SPCI proved again that pulp and paper industry personnel benefit greatly from coming together and exchanging ideas about how everyone in the sector can improve operations for the future.

IN THIS ARTICLE, YOU WILL LEARN:

* Highlights of the recent SPCI show in Stockholm, Sweden.

* Which major supplier has staged a comeback to the pulp and paper industry.

* Industry forecasts and project updates from top suppliers.

* New product developments introduced at SPCI

ADDITIONAL RESOURCES:

* For more information about the 2002 SPCI shaw, visit http://www stofair se/spci/

* Swedish Pulp and Paper Research Institute (STFI) home page: http://www.stfi.se/index htm

About the author: Jim Kenny is contributing editor/Europe, for Solutions! magazine, and is based in Brussels, Belgium. He is the former vice president of editorial for Paperloop and today heads his own company, DSI, Contact him by phone at [phone], or by email at [e-mail]