Birla preps for mill conversion.

• Author: Ross, Ian
• Position: Aditya Birla Management Corporation Ltd.

The new owners of Terrace Bay's pulp mill say the conversion of the northwestern Ontario plant appears to remain on schedule to begin next year.

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Rayon maker Aditya Birla of India is planning to convert the former Buchanan pulp mill into a specialty pulp operation for use in its global operations to make rayon for textiles.

The operation, known as AV Terrace Bay, gives the company access to surrounding woodlands to produce dissolving wood pulp. a critical ingredient for its viscose staple fibre (VSF) business.

"We're working through the testing of the fibre and the pre-engineering work with regards to the conversion," said Giovanni Iadeluca, CEO of AV Terrace Bay, with much of that testing being done at Birla's lab in Sweden.

Iadeluca said the abundance of softwood in the fibre basket in the northwest is much different than any other fibre they use in Canada and the world.

"We've spent a lot of money, and will continue to do so, to ensure we have an understanding of what technology is going to be best deployed to be able to achieve a dissolving grade quality that is consistent and equal to the best in the world."

The property was under creditor protection in 2012 when Birla acquired the shuttered pulp mill. It had been run by the Buchanan Group of Thunder Bay, which purchased the operation from Neenah Paper in 2006.

Birla is a multi-national Fortune 500 corporation with rayon manufacturing operations in India, Indonesia and Thailand. Birla is the world's largest maker of viscose staple fibre. It has two operations in New Brunswick.

The Terrace Bay conversion represents a $250-million investment. The conversion is expected to be take between two-and-half to three years with final completion sometime in 2016.

But in the short term, the company elected to keep making conventional kraft pulp.

"We're running pretty hard at the mill," said Iadeluca. "We've got a great team, as well as in sales and marketing, who have done exceptionally well at leveraging the volume here into the market."

The mill won't be completely gutted during the conversion. The additional equipment that will arrive is mostly for the digester area. How the entire dissolving pulp process works is considered proprietary information, said Iadeluca.

But at startup in 2016, the mill's workforce of 360 will produce 800 tonnes of pulp per day.

"There's going to be a lot of our pulp that's going to be for internal customers," said Iadeluca. specifically for...