SCA opens integrated mill in Alabama to better serve the North American market

SCA hasn’t entered the North American tissue market in a small way. The new Barton mill in northwest Alabama is big and efficient, giving SCA a better position from which to grow with the expanding Southeast market, as well as helping the company to secure its paper supply.

Hugh O’Brian

Efficient. Innovative. Impressive. If anyone has any doubts whatsoever about the commitment of SCA Tissue to the North American market, one visit to the new Barton facility in northwest Alabama should certainly dispel them. Set on a site of some 750 acres, with buildings covering more than 220 acres, the complex includes a converting plant capable of producing 185,000 short tons per year of towels, napkins, kitchen rolls and bathroom tissue, an ultramodern 110,000 short ton tissue machine, and a 457,000 square foot distribution warehouse.

An investment of $240 million, SCA’s Barton facility is one of the world’s largest greenfield tissue mills ever constructed. Located on the banks of the Tennessee River, the mill took just 17 months from the time the first construction work began in October 2002, to the converting of paper in April of 2003, and finally to the production of tissue paper in late March 2004.

COLIN WILLIAMS, PRESIDENT OF SCA NORTH AMERICA’S OVERALL OPERATIONS, IS VERY PLEASED WITH THE BARTON PROJECT. Most importantly, he says, it gives SCA a major integrated tissue plant in the Southeast from which to serve the big customer base that the company already had there.

SCA is known as a company that takes a step-by-step approach to sustainable development. Upon making the decision to enter this market, the company sent one of its most senior managers to build its North American operations. Colin Williams arrived in the US in early 2001. His push to build an integrated tissue mill in Barton is just one piece in the complex puzzle SCA is putting together in North America, not only in tissue but also hygiene products and packaging.

SCA NOW HAS ABOUT $1.5 MILLION IN TOTAL SALES IN NORTH AMERICA, ACROSS ALL PRODUCT GROUPS. “Barton gives us a very important presence in the Southeast market with a major integrated plant,” explains Williams.

“This was critical for our overall national coverage as we now have Barton for the Southeast, Neenah for the Midwest, South Glens Falls for the Northeast and Flagstaff for the Southwest. This regional manufacturing capability makes a very significant contribution to lowering our cost base as it eliminates the need to ship tissue jumbo rolls around the country.”

LEADING SCA TISSUE NORTH AMERICA IS JOE RACCUIA, a 46 year-old executive from New York City. Following experience early in his career in sales with Colgate-Palmolive, Raccuia moved to Wisconsin Tissue in 1985. In 1992 he joined the newly established Encore Paper, which was a company based on the restart of the old James River South Glens Falls, New York, tissue mill. Raccuia became President and CEO of Encore in 1998 and then, following the takeover of Encore by SCA in November of 2001, he was appointed President and CEO of SCA Tissue North America in September 2002.

Raccuia says that while the Barton investment is quite large, there is no question that building this integrated facility was the right choice, both for SCA and for its customers. “There were numerous very compelling reasons for us to build this new facility.

These include improving customer service throughout the country, securing our paper supply, and achieving cost savings in our entire supply chain.”

IMPROVED CUSTOMER SERVICE. “Our supply chain is the key,” states Raccuia, “We will improve our customer service and reach through this modern facility. SCA’s mission is to provide essential products that improve the quality of everyday life.

Essentials for everyday life™ is our promise that we will continue to provide a breadth and quality of product that consistently serves the needs of our customers and end users in their daily lives. Our Barton site enables this promise to become more of a reality. By locating in northwest Alabama, SCA is ideally positioned to reach several major regions. This includes the Southeast all the way down to Florida, the south through Texas and even up to the lower Midwest. We are right next to Memphis, which is of course the hub for Federal Express and the model for companies that want to be in easy reach of much of the US population.”

SCA MADE ITS MAJOR ENTRY INTO THE NORTH AMERICAN TISSUE MARKET IN 2001 with the acquisition of part of Georgia-Pacific’s Away-From-Home tissue business, which was in turn composed mainly of the former Chesapeake/Wisconsin Tissue units. As part of the deal to sell the assets, GP agreed to supply paper to SCA for a certain period. The tonnage involved was on the order of 100,000 tons per year which was a net paper deficit for SCA.

In addition to the tonnage shortfall as far as paper supply, SCA also faced a challenge with respect to geographic location.

While the company had a rather large share of its business in the Southeast USA based on converting lines there, it had essentially no paper production in that part of the country. Thus it was shipping parent reels from as far as away as Wisconsin to the converting lines in Georgia and shipping finished product from all over the USA to supply the Southeast.

Faced with this situation, SCA carried out a thorough analysis of the possible solutions to the various challenges it faced. In the end it was very clear that a modern new greenfield mill would be the best choice. It had of course looked at the option of buying a mill in the Southeast and then perhaps expanding it in a brownfield project but in the end building on the Barton site proved to be the best solution.

Thus SCA decided that it would build a new complex from which it would primarily serve Southeastern USA. As part of the plan, several other smaller, less efficient converting plants in the East were closed and equipment was moved to the Barton site.

STRONG PROJECT TEAM STARTS WITH CLEAN SLATE. Following the decision to build the new mill, the company set forth to establish a very experienced and disciplined project team to carry it out.

One of the key persons involved in Barton was the Project Sponsor, Lee Bingham. A veteran executive who has worked in numerous positions in the pulp and paper industry for over 40 years, Bingham came into the SCA organization when it acquired the GP away-from-home (AFH) tissue assets as he had been vice president of GP Tissue. Eventually, as the structure of the new company emerged and the size of the Barton investment became clear, Bingham, now 63, thought it offered a once-in-a-lifetime opportunity for him.

“I had worked in numerous senior positions in the paper industry over the years,” says Bingham, “but had never been involved in a complete greenfield project like Barton. We were starting with a totally clean slate here and we were given the opportunity to do things exactly as we wanted. To me it was the ideal situation to take all the best ideas from a lifetime of experience and put them into practice at one ultramodern site. It was something I had always wanted to do.”

BINGHAM’S ROLES IN THE PROJECT HAD A VERY WIDE SCOPE, ranging from boardroom presentations to getting down on his hands and knees to examine rare plant species on the greenfield site. Working in close cooperation with the local government officials as well as the environmental authorities, SCA was able to ensure that the Barton plant would not have any negative impact on the environment.

“Sometimes it was a little tricky,” explains Bingham. “But by working in a cooperative rather than confrontational manner we were able to get everything through. Of course, we have spent a lot of money to ensure that the environmental impact is extremely low but we consider it money well spent both for now and for the future.”

Jim Haeffele was another key figure on the project team. He was the overall project manager and is now the Director of Southeast Operations for SCA Tissue. Before relocating to Alabama from Neenah, Wisconsin, Haeffele chaired all of the project meetings by teleconference once a week with the whole team.

NEW WORKFORCE AT THE NEW FACILITY. At the same time as the facility was going up, SCA Tissue was also carrying out the task of building a whole new workforce. Although some of the workers from the other converting plants that had been consolidated accepted transfers to Barton, the majority of the operators were very new.

Explains Haeffele: “Most of the work force had never seen a paper mill or a converting machine. So we had to put in place a very thorough and extensive training program. This was accomplished through internal SCA training as well as in cooperation with the machine suppliers. For the shift coaches we did bring in experienced people but otherwise we were starting with a new team which required solid training.”

SCA has also sought to instill an atmosphere of teamwork by building what it calls “high performance work teams.” Instead of the traditional hierarchy structure of the machine crew and the walls between the various parts of the process, SCA’s Barton facility has started from day one with an integrated approach to the entire mill. In this manner, says Haeffele, “instead of spending a lot of time and effort to break down walls, we decided to eliminate them from the beginning”.

HIGHLY AUTOMATED WITH MODERN WORK PRACTICES. Starting with the clean slate, SCA also sought to use outsourcing and automation to their best advantage in order to make Barton an extremely competitive mill, both for today and far into the future. Outsourcing of many key functions has been used extensively.

“We decided to focus on our core competencies and to do what we do best by ourselves,” explains Haeffele. “We think we are very competent on the pulping, papermaking and tissue converting operations. But some other areas are best done by other experts.”

State-of-the-art automation solutions are highly evident in the plant. Most striking are the numerous automatic guided vehicles (AGVs) that are used throughout the converting and finished product areas. These units deliver parent rolls to the converting machines, transport pallets of finished product to the warehouse and carry pallets of finished product to the shipping docks for transport to customers. Barton has about 40 AGVs moving around the converting and finished product plants, quietly carrying the various goods to the point where they are needed.

The facility has created about 400 jobs when one includes the direct SCA employees as well as the employees under contract for the other outsourced areas. Haeffele says that the combination of modern work practices, the latest automation techniques and strong employee training means that SCA has built efficiencies into the Barton plant from the beginning.

U-SHAPE FLOW PATTERN. The result of all of these efforts is a highly efficient facility that comes across as being both complex and simple at the same time. Complex perhaps due to the size of the site and enormous material flows taking place with raw material coming in and finished product going out on essentially the same trucks. But at the same time the Barton integrated facility appears extremely simple and straightforward, thanks to the very logical U-shaped layout in which the material flows smoothly from one part of the process to the next. The U shape of the mill is the ideal layout, says Bingham, as it allows raw material to come in at one end, then be made into pulp, and then paper, with rolls sent to the converting side or roll storage. The massive converting operation turns out finished product which is sent by the AGVs to the warehouse or to truck loading.

The fiber raw material for the process is 100% recycled fiber collected from various places throughout the southeast. This is transported by truck into the mill and in most cases these same trucks are used to take the finished product out. The recovered paper is slushed on one of the two parallel fiber lines and then fed to the stock preparation system before flowing out to the tissue machine. Deinking is used when necessary for the white grades. Regarding the paper machine, creping is done at the Yankee cylinder in a fairly wet state and then a set of after dryers follows the Yankee for final drying. Total capacity is 110,000 short tons per year of both white and brown paper for the AFH towel and napkin markets. The machine started up extremely well, says Haeffele, and has been exceeding the planned startup curve. From the paper machine, parent rolls are taken to the 660,000 square foot converting plant which includes around 30 converting lines. About one third of these lines are new and the other two thirds are relatively modern machines that have been moved from other SCA Tissue converting plants. Products made on the lines include essentially a full program of AFH products including folded towels, napkins, bathroom tissue, kitchen towels and jumbo roll tissue. The converting lines have a capacity on the order of 185,000 short tons per year.

TORK® MASTER BRAND FOR THE FUTURE. While SCA is the n°4 global company and a major player in both the consumer and AFH tissue business, in the North American tissue market the company is presently one of the top 3 suppliers in the AFH sector. Since entering the North American market, SCA Tissue has streamlined its offering of AFH brand names so that it is now rather concise. The main names used are the Main Street®, Coronet® and Park Avenue® brands under a good, better, best product architecture. Says Raccuia, “We have a tiered system to our brand architecture now, as we have removed some brand names in the past few years. The idea is to eventually, at some point in the future, use SCA’s global TORK brand name as the master brand on our AFH tissue. Thus we would have TORK–Park Avenue, TORK–Coronet, TORK–Main Street designations. In this manner we can keep the names that are known and appreciated in North America but put them under the TORK umbrella, SCA’s truly global master brand.”

ALTHOUGH THE BARTON FACILITY IS UP AND RUNNING, SCA IS NOT IN ANY HURRY TO MOVE TOO QUICKLY INTO THE FUTURE. Concludes Raccuia: “As far as a second paper machine, we have no immediate plans. We are taking things one step at a time and want to get 2004 under our belts before we look at our next step. We are hoping that the market continues to give us a good reception, as it has been doing, and then we will take a look at what we can do to make the most of our opportunities.”

The big question on many people’s minds now is if SCA will enter the US consumer tissue market. Colin Williams’ answer is a cautious one. “We are a very big player in the European consumer tissue market. We are a company with global ambitions. The USA is the world’s biggest market. So it would be very surprising if we did not eventually move into the consumer market, most probably through private label rather than brands. I can tell you that we will evaluate this opportunity carefully.”•

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