Proponents of Prairie Pulp and Paper Co. won accolades last week for their moxie in daring to try to break into a daunting logistical, technological and capital-intensive business.
Industry leaders had words of congratulations and caution last week after hearing news the Manitoba company may spend up to $975 million on a pulp and paper mill.
The company is exploring plans to produce uncoated paper, the kind used in fax machines.
North American companies have pulped agricultural fibres on a smaller scale before for specialized, high value applications such as tea bags, cigarette papers and currency.
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Most major paper companies have environmental product lines. Domtar, for instance, recently launched a hemp and sugar cane fibre paper called weeds.
A spokesperson for Crane and Co. Inc., a 199-year-old non-wood pulp and paper company in Massachusetts, said less than 10 percent of paper comes from non-wood fibres.
Peter Hopkins said tree-free paper is starting to make in-roads into markets because it’s more available and of higher quality than it used to be.
Tree-free paper is particularly popular for high-end uses like letterhead and business cards, where small volumes offset the high cost.
Before the mid-1800s, all paper came from straw, cotton, rags and flax, said Med Byrd of North Carolina State University.
But as the population grew and literacy rates soared, industrialists looked for a source of pulp with higher quality and more uniformity.
Wood fibres proved to be a cost-effective answer, said Byrd. Logs don’t degrade under harsh elements. They are relatively easy to transport and they can be harvested year-round.
“We can’t beat the wood-based paper mills at their own game,” said Byrd, explaining non-wood pulping ventures need to explore new strategies and techniques.
Byrd, who one environmental paper activist calls the “young god of pulp and paper,” has been involved with research on the Prairie Pulp and Paper project.
Byrd declined comment on the specifics of the project, but spoke about the industry in general.
While barriers to the capital-intensive paper industry are steep, the business can be lucrative, said Byrd.
“Anyone who thinks people are in the non-wood business just to help Mother Earth are foolish: there’s money to be made here,” he said.
Some people in the industry think wood will become a less cost-effective source for paper as demand for building supplies soars.
Byrd said non-wood entrepreneurs would need a strong business plan, capital, pre-sold customers and guts to tap into demand.
“This is not a cakewalk, and (actor Woody Harrelson, who is in on the proposed venture), and Prairie Pulp and Paper, and all these other ventures are finding out it’s all about money,” said Byrd.
That’s a lesson known well to failed fibre start-ups on the Prairies, including two Alberta strawboard plants that were undercapitalized and ended up in receivership.
But traditional players in the agricultural industry should respect those who put their fibre projects on the line, said Barb Isman, general manager of flax fibre processor Durafibre Inc.
“We’ve had a tendency to be quick to judge when mistakes have been made by individual companies, and we can’t look at this that way,” she said.
Fibre pioneers face a dearth of research about how weather, varieties, soils and agronomics affect their highly variable raw material, she said.
They also deal with untested technology and unproven market demand.
There is ample supply of agricultural fibres, and demand for tree-free products, said Isman, an assistant vice-president for Cargill Canada.
But what’s missing is the infrastructure between supply and demand, she said.
Fibre plants have to be located within 100 kilometres of supplies. Otherwise trucking becomes cost-prohibitive, noted Geof Kime, president of an Ontario hemp fibre processor.
Kime sells hemp fibre for textiles, composites and animal bedding. He knows about competing with wood.
“It boils down to this: wood is cheap and it is renewable,” he said, explaining non-wood competitors need to produce an equivalent or better quality product at a competitive price.
He’s keen to hear more about the proposed pulp and paper mill. “I think it makes a lot of sense, right off the top,” said Kime.
He predicted financing will be the biggest challenge. He added that the pulp and paper company will have an easier time raising money if it has lined up strategic partners or sold its production in advance.
