Paper Manufacturer Banks on Biomass

Paper Manufacturer Banks on Biomass

Ohio plant will operate entirely on alternative energy.

By early 2009 fossil fuel will truly be a thing of the past for Ohio paper maker Smart Papers Holdings LLC. The company, located near Cincinnati in Hamilton, has begun construction on a $30 million cogeneration facility that will utilize yard, industrial and fiber waste to power its manufacturing operations. The 115-year-old company claims to be the first North American paper manufacturer and second in the world to move to 100% biomass for its power-generation needs, according to Tim Needham, chairman of Smart Papers. (IndustryWeek contacted the U.S. Department of Energy to confirm Smart Papers' claim, but the federal agency says it doesn't keep track of such records).

The company began looking for alternative energy sources after emerging from Chapter 11 bankruptcy about 18 months ago. When Smart Papers declared bankruptcy in March 2006 and closed a Wisconsin mill, the company cited rising raw materials costs as a major reason for its troubles. By being energy independent the $200 million manufacturer not only expects to protect itself from similar pricing pressures that nearly destroyed the company two years ago, but may gain a marketing advantage over other paper producers.

"We sell to major retailers in corporate America -- whether Procter & Gamble or Starbucks -- and they are aggressive today in wanting a recycled product or recycled fibers or wanting us to be carbon neutral, and Wal-Mart has a gigantic effort to go carbon neutral," says Needham.

This Smart Papers' facility will be powered by 100% biomass fuel by 2009 and will sell some of the power generated back to other users.
Additionally, by late 2010 the company plans to sell renewable energy produced by the cogeneration system throughout Ohio and the Midwest.

Smart Papers expects the project will pay for itself within seven years of completion, Needham says. When finished, the 40-megawatt cogeneration system will consist of four turbines, two condensers, a cooling tower and auxiliary equipment. Honeywell International Inc. is supplying the cogeneration system and supervising facility construction.

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