Flambeau River Papers | Wisconsin Central
Flambeau River Papers, Park Falls

Park Falls in northern Price County boasts that it blends nature with industry. This story will most certainly underscore the truth of that. This is a story about economic activity in progress, where a paper mill central to a town's economy was closed, a group of local investors and businesspeople took the bull by the horn to re-open it, and took the next step, reaching "one rung higher" to invest in and pursue new technologies that have the potential to make the plant energy self-sufficient and enable it to produce new kinds of ethanol fuels to sell. This company among the only ones embarking on this road. There are plenty of unknowns and risks, but their road is filled with excitement and great, perhaps even endless possibilities. This is an outfit worth watching, and a town and area worth visiting.

By Ed Marek

February 1, 2008

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I'm told Park Falls in upper Price County is among the coldest places in the state. The day I visited, January 23, 2008, convinced me it can has every right to assert that. She was cold. But the sun was shining, and it's now easy to understand why.

This was my first visit to Park Falls, my "rookie run." I fear I left showing my rookie colors a little too brightly, as I missed some things I will want to go revisit next chance. Nonetheless, I bumped into a heck-uva story revolving around the "Park Falls Mill," now known as the
Flambeau River Papers Mill. The building you see at the opening is the front entrance on 1st St. and 1st Ave., a wonderful building, dating back to 1896.

Park Falls has a population of about 3,100, and the mill has been employing about 300 workers over recent years, with perhaps another 300 loggers connected to the business. It had most recently been owned by Smart Papers of Hamilton, Ohio. Glen Ostie, in a report dated December 1, 2006 entitled,
"Reopened Flambeau River Papers targets energy independence," said the Park Falls plant had "three older paper machines producing 420 tons per day (tpd) of uncoated paper using 140 tpd of hardwood sulfite pulp, 80 tpd of recycle and 120 tpd of direct entry clippings or purchased pulp." He added,

"Its sulfite pulping process was expensive to run even before energy prices spiked. As profits slipped, a lot of things at the mill weren't fixed that should have been."

Smart Papers operated the plant for about a year after buying it from Toronto, Canada-based Fraser Papers. Smart Papers decided to close the plant in February 2006 and then file for Chapter 11 bankruptcy. So the plant was closed, and some 300 workers and 300 loggers found themselves at the short end of the stick, a common refrain in this business these days, indeed an all too common refrain in rural Wisconsin period.

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Mr. William "Butch" Johnson, the CEO of Johnson Timber in Hayward, a guy whose company sold its logging to Smart Papers, led the effort to save the "Park Falls Mill" and is engineering what we all hope will be a great comeback. We have seen other photos of him, and this one is not the most flattering, but I love it because it shows the image of a no-nonsense and intent leader, a professional in his field.

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Johnson led a complicated business effort to form a new company, Flambeau River Papers, LLC. That company then acquired the Park Falls assets in bankruptcy court in July 2006, rehired the workforce, and reopened the mill on August 9, 2006. There was a lot involved in this action which we are not going to try to explain in any depth. Let's just say it was a complex business transaction, I'm sure filled with highs and lows and a good deal of angst for those involved in the business dealings and the towns people and workers.

I have opined that this is a story in progress.
Joel Dresang, writing for the Milwaukee Journal Sentinel in December 2007, tells us why:

"The company has yet to post a profitable month five quarters after starting up again. But Johnson says it is making more pulp and paper than ever. And employee-led initiatives to reduce energy costs have achieved savings exceeding $2 million a year. But the brightest prospects are still on the drawing board.

"Flambeau is proposing a pilot plant on site that would make the mill not only free of fossil fuels but a net producer of energy, generating an entirely new stream of earnings estimated at $3.9 million a year. Encouraged by employees, researchers and state officials, Flambeau is investing in the notion that pulp and paper mills are in a prime position to be alternative energy producers."

In a press release of January 23, 2007 from Atlanta, Georgia, we learned this:

"Flambeau River Biorefinery, LLC of Wisconsin has entered into a Memorandum of Understanding with
American Process Inc. of Atlanta, Georgia** to provide project management and engineering services for its cellulosic ethanol project at Park Falls, Wisconsin. The new biorefinery will be constructed adjacent to the Flambeau River Papers facility in Park Falls, Wisconsin.

"Flambeau River Papers, LLC makes 400 tons per day of book printing and copy grades on three paper machines. The mill recently announced plans to replace its natural gas boilers with a biomass boiler or gasifier. This will make Flambeau River Papers the first energy independent integrated mill in North America.

"The Flambeau River Biorefinery project will be the first modern U.S. based pulp mill biorefinery to produce cellulosic ethanol. It will be designed to produce 20 million gallons of cellulosic ethanol per year from spent pulping liquor. The technology selected for this biorefinery is AVAP™, a patent pending process technology of American Process Inc. This technology enables production of ethanol without putting additional pressure on the wood basket and without fossil fuel consumption."

For us rookies, "cellulosic" is an adjective that relates to cellulose, an insoluable substance that is the main constituent of plant cell walls and vegetable fibers, in our case, wood, specifically wood chips. Cellulosic ethanol is a type of biofuel produced from cellulose waste generated by lumber and lumber products. In short, an alternative fuel.

**We understand from the company that Flambeau is no longer working with American Process, but we've kept the report in to give you an idea of the objective. The company is seeking biorefinery options.

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Flambeau River Papers facilities, a view from 1st Ave. North, Park Falls.

I'm a big fan of industries that produce useful products in small towns. I'm one of those who loves driving through Wisconsin's wonderful countryside to arrive at a town where I see some smokestacks churning out steam. Like the people of Park Falls, I believe nature and industry can work "side by each."

It is especially exciting that a group of business people involved in the region would take the bull by the horn and not only save a business and a town, but reach "one rung higher" and vault ahead to employ new technologies to do new things. Returning to Joe Dresing's article, he mentioned this:

"Flambeau plans to make Park Falls a launchpad for a network of such biorefineries - as many as 132 nationwide by 2016, according to an application the company has filed with the federal government."

That is, perhaps, "several rungs higher."

Let's take a look at Park Falls and the extent of the present operation.

Aerial

Park Falls resides on the North Fork of the Flambeau River, at the junction of Hwys 13 N-S and 182 E-W. The Wisconsin Central rail line cuts diagonally through the town. Downstream there is the Lower River Dam which will be shown at the close.

To me, the layman, there are four major elements to this complex: Johnson Timber, Flambeau River Papers, Xcel's Flambeau Energy Station, and the transportation system afforded by the highways and the rail line. It's also important to remember we are in the north country, famous for logging, close to Lake Superior, Minnesota and Michigan's Upper Peninsula.

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Let's start with Johnson Timber. Butch Johnson is the CEO of this company. It was begun by his father in 1973 at a time when the aspen forest was over mature. Its main offices and original mill are a few miles south of Hayward, Wisconsin, to the northwest, in Sawyer County. Johnson Timber remains a family business, and has formed a few additional companies in ways that would grow the business.

In spring 2001, Johnson spun off a company called Summit Lake Timber which joined with the Toronto-based Fraser Papers Inc. to take care of all Fraser's de-barking and chipping operations at this large wood yard you see in the Park Falls aerial. We believe Summit continued this line of work on behalf of Smart Papers when it bought the Park Falls operation from Fraser.

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Here is a close-up of the Johnson Timer "wood yard." Regrettably, I did not know about this during my visit and did not go here. I will fix that next visit. So in lieu of our photos, we've gone to the Johnson Timber Corp. web site to help explain what they've got here.

We believe the "troops in formation" are multiple stacks of logs brought in from the logging area by Summit Lake Timber. Johnson Timber says this about Summit:

"Summit Lake Timber procures 115,000 cords of white birch per year. The wood is then stored and aged for 12 months prior to recovery and processing into chips. This process concentrates the sugars within the fiber while decreasing the pitch content."

So Summit brings in the raw materials where they are "stacked and racked."

Now I'll draw your attention to the area encompassed by the yellow circle in the next photo.

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You are now focused on the same area encompassed by the yellow circle in the previous photo, but you are viewing it from a different direction. At its most basic level, the raw logs go into machinery in the area of the yellow arrow to have their bark removed, or, to be de-barked. They then travel into the building where they are converted into chips and conveyed into the pile of chips you see, marked by the green arrow. Following this, the chips are move by a 2,300 ft. conveyor system to the pulp mill's storage facility. Part of that conveyor is shown by the red arrow.

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In this photo, the green arrow points to the pile of chips in the wood yard. The red arrows point to the 2,300 ft. conveyor system that moves the chips from the chipping area to the pulp storage facilities, highlighted within the yellow box. To get your bearings, the blue arrow points to that wonderful main office building we showed at the outset. You'll also note that part of the North Fork Flambeau River has been diverted into the paper mill complex, a common practice at mills throughout the state.

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This is a view of the complex inside that yellow box, as seen from 1st Ave. North.

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This is a closer view at some of the plant along 1st Ave. North.

With the chips arriving by means of the conveyor system, the tasks from here on are to convert the chips to pulp, then the pulp to paper, then cut the paper to size, package it, ready it for shipment to the customer, and, move the product out.

As a general rule, when you see cylindrical structures as you see on the preceding two photos, most likely you are looking at storage structures, some holding the chips, some holding chemicals used in the paper-making process. The chips have to be cleaned, metal has to be removed, and the chips then have to be refined, reduced to fibre and pulp. The refining process involves employment of a great deal of heat in the form of steam, which explains why you always see steam rising from a mill.

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This is a back-end view of the complex taken from Wisconsin St. on the east side of the North Fork Flambeau River. Note the electrical transmission complex in the foreground of the lower right quadrant. Just to the right of it, outside the photo, is the Xcel Energy Flambeau Electrical Station.

Pulp is actually about 99 percent water, incredible when you think about those huge logs we always see. Inside the factory complex, the pulp is moved over screens at high speeds to remove the water, thence to drying facilities, and then wound into rolls after which it is cut. The machinery involved here is something to see.

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1st Ave. North ended at 1st St. South, which is also Hwy 182, and we spotted this facility connected to the factory complex by large tubes on a bridge over the rail tracks. I do not know for sure what this facility is, but I am going to guess that it is known as No. 6 boiler. If correct, it is fueled by wood waste, coal and natural gas and, according to Wayne Nelson, in his article, "Parks Falls mill is about more than paper," published by Business North on February 15, 2007:

"It produces about half the mill's steam requirement and 5 megawatts of electricity."

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Here's another aerial close-up that is the southern end of the aerial shot preceding it. The red arrow points to the end of the chip conveyor system that brought the chips from the wood yard to the factory complex. As a frame of reference, the blue arrow again points to our wonderful old office building of 1896. The two green arrows point to the facilities that convert the chips into pulp into paper, cut it up, and ready it for packaging and shipping. The yellow arrow points to the building that was in our last photo that we have guessed is No. 6 boiler. I am guessing that the pile of stuff in the yellow box is woodchips, though I have wondered whether it might be sludge, a left-over from the paper-making process. The area within the circle is the bridge that carries tubes of steam to the paper-making factories from No. 6 boiler.

In the case of Flambeau River Papers, one of the reasons it fell into financial trouble was that it used too much energy and the price of that energy kept rising while the price of paper kept falling because of foreign competition from places like China.

One action taken by Butch Johnson and his people has been to reduce their use of coal as the main energy source, and revert to burning wood chips. We understand they are buying wood chips for this purpose, chips that burn very efficiently. The company hopes to be coal free by year's end.

The company has proposed an $84 million demonstration project to convert biomass into energy to drive the mill and to convert biomass to what's called cellulosic transportation fuels or fuels with ethanol content. The company is hoping the Department of Energy offers it a $30 million grant for a pilot biorefinery. The company believes that would draw private investment to make up the rest. The company expects to hear soon. Cellulosic fuel is seen by experts as the next generation ethanol, in part, because most seem to agree that ethanol produced from corn cannot fill the need.

If I have read the press on this correctly, the company is shooting for two goals. First, become energy independent, making it more competitive. Second, produce and sell ethanol as a fuel-substitute for the transportation industry, providing it a new stream of income. The company envisions replacing its natural gas boilers with a biomass boiler or gasifier. That would make it the first energy independent integrated mill in North America. The management expects this effort will produce 100 new jobs.

I mentioned earlier that Flambeau has joined with American Process Inc. to employ the latter's AVAP™ technology to break down wood chips such that one output is a flow of "hydrolyzed hemicelluloses" which are fermented to yield bioethanol.

It's always fun to see new technologies come on line, but everyone must be careful, because there is always risk associated with new technologies. Mr. Johnson knows that. He has been quoted saying this:

"We've got a tough job in front of us to make sure we can try to keep the mill going ... The biorefinery would help shore up the future of the Park Falls economy."

It's good to know, however, that research dollars are starting to emerge in substantial sizes, and people in our region and the northwest are working to reduce the risks and turn production of this kind of bioethanol economically feasible.

There is one final point which intrigues me a great deal, and demands further research. The paper industry produces a lot of paper, and to do so, it produces a significant waste stream known as sludge. Traditionally, paper manufacturers have had to find ways to dispose of this sludge, ways which have created environmental controversy associated with landfills, sludge combustion, and others means of disposal.

It turns out that paper sludge can be converted to ethanol fuels as well. Work has begun in the Pacific Northwest and elsewhere to find out whether sludge can be converted into ethanol fuels and offer solid rates of return for the mills involved. There are a host of technical and economic challenges involved, but this shows promise as yet another energy producer. I do not believe Flambeau has this in its plan just yet.

There is controversy surrounding what impact the use of ethanol can actually make on our requirements for fossil fuels. Thus far, producing it demands a great amount of energy, and it's hard to envision that enough can be produced economically to replace fossil fuels. That said, it is uplifting to see a group of local people dive in, try to save a company that is fighting to survive in a very competitive business, and employ good ol' fashioned guts and creativity to change and grow. The underlying core principle of capitalism in a democracy is that everything is always changing. That always means outmoded ways get destroyed and new ways emerge, and there is almost always a lot of turbulence in the process, especially for workers and owners.

Quite clearly they are working to change and adapt to capitalism's demands in Park Falls, and that is exciting. We are cheering for them and will watch their progress as time goes by. They've got lots of brains and brawn working the problem, but at the end of the day, they'll need a little luck too. They are enhancing their opportunities to get some, so we'll keep our fingers crossed for them.

To close, as this editor is unapologetically infatuated by dams and and the way Wisconsinites employ rivers to work for them, I am compelled to show a photo or two of the dam downstream Flambeau River Papers on a very cold January day.

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This is a Mapquest aerial of the dam in summer. It's known as the Lower Dam Park Falls. That's Hwy 13 passing it by, and the location from which I took a few shots upstream toward the dam and downstream. I ran back and forth across that bridge to stay warm!

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In 1920, a book written by William Bond Wheelwright was published in Menasha, Wisconsin, entitled, From Paper-Mill to Pressroom. In the early pages, Wheelwright wrote this:

"The transition from the old ways of paper-making to modern processes was sudden. The century which gave them to us stands out in radiance against the dark ages of heavy toil at the vat and the press.

"First came the mechanic whose genius caused tons to be produced in the time that pounds were made of yore. Next came the chemist who developed unthought-of raw materials to supply the every-growing demands of 'papivorous' civilization, until it has been said with so much truth that ours is the paper age.

"Times were heard on the continent, yet the Government of France, recognizing the importance of the (papermaking) invention (of Louis Robert), awarded Robert eight thousand francs and a patent for fifteen years. Furthermore, permission was given to carry over the small working model to England, with the hope of interesting British capital.

"Being in need of funds, they interested two wealthy London stationers ... and in 1804 the first successful machine was started at Frogmore."

Sound familiar? God's speed, Park Falls!