Infrastructure Outsourcing: Worry-Free Risk for Pulp and Paper Mills
This article on outsourcing of the water, wastewater, and general environmental areas of a pulp and paper mill is the first in a series of four articles on outsourcing in the paper industry. During the next several weeks, other articles to run in Pulp and Paper Online will focus on outsourcing of production scheduling, chemicals management, and price risk management.
The U.S. pulp and paper industry is no stranger to outsourcing, but in some regards it lags behind other industries in critical infrastructure outsourcing, especially in areas of non-core competencies. The industry is generally experienced in outsourcing of the maintenance function, for example, which has been an on-again/off-again proposition with mixed results during the past quarter century. While some mills have been quite successful with "contract maintenance" arrangements, others have abandoned the practice after relatively short periods due to a combination of factors, not the least being labor problems in the wake of related downsizing efforts.
But probably the greatest potential for the paper industry is in outsourcing of various process support segments, such as power generation, chemicals management and handling, environmental, and water and wastewater treatment. One of the most successful outsourcing-related stories in the U.S. pulp and paper industry during the past decade has been in the wet end mineral additives area, where providers of precipitated calcium carbonate (PCC) have been increasingly building, operating, staffing, and maintaining on-site plants at paper mills since the early 1980s.
Although perhaps not outsourcing in its truest sense, these PCC plants have taken symbiotic processing to new levels. Using carbon dioxide off-gases from a pulp and paper mill, together with water and power from the mill, these plants are able to convert calcium carbonate to PCC engineered specifically for the mill's wet end additive and coating needs, and reduce the mill's environmental load in the process. With this arrangement, the PPC supplier has a contracted customer for a lengthy period of time, and the mill is assured of a steady supply of PCC customized to its specific process.
The industry has also experienced growing success in outsourcing of power plant operations. At least five U.S. mills are currently involved in such arrangements and generally report smoother operations and improved operating costs. Although the U.S. paper industry has been outsourcing landfilling operations to some degree, it, as yet, has no meaningful experience in outsourcing its general environmental and water and wastewater treatment areas. However, that could change in the near future.
Water and wastewater outsourcing (back to top)
One company that has been involved in outsourcing of the paper industry environmental and water/wastewater arena in recent years has been the infrastructure arm of Hyder PLC of the UK. Through its environmental services group, Hyder has been involved in several key paper industry environmental projects in Europe. Six recent projects are outlined in Table 1.
The company, now operating in the U.S. as Hyder North America, with headquarters in Lancaster, PA, is in the process of transferring these European paper industry experiences to pulp and paper mills in the U.S. and Canada. Matthew Brown, president of Hyder North America, explains that "outsourcing non-core competencies to industry experts is proving to be an attractive alternative for companies seeking improvements to the bottom line and gaining peace of mind environmentally. European and Asian corporations have successfully led this charge, and the U.S. is now beginning to embrace this new business trend."
Brown emphasizes that "for an industrial company, such as a pulp and paper mill, managing water and wastewater is becoming more time consuming, expensive, and risky. By outsourcing, a mill can significantly reduce and control costs, minimize legislative and environmental risks, and focus its people on the company's core competencies."
Recently joining Hyder North America as a senior consultant, Dr. Rudra Singh, who headed Scott Paper Co.'s bleaching technology worldwide for more than 20 years, points out that "environmental peace of mind" is especially important to pulp and paper mills "that have been struggling with progressively stringent legislation for the past half century. "
Singh adds that "by outsourcing its water, wastewater, and general environmental services, a mill can reduce its overhead costs through greater efficiency. As governmental regulations become more complex, especially with the recently promulgated U.S. Cluster Rules, outsourcing to industry experts ensures that a mill is always in compliance. This takes a big load off of a mill manager's shoulders, and allows more attention to things that matter the most, such as production efficiency and costs, changes in the marketplace, and the bottom line."
Hyder's outsourcing packages to the pulp and paper industry include either water or wastewater services or both. However, unlike most outsourcing services, it can handle a mill's entire needs, from design, building, and financing to operating. For example, it will purchase an existing system, upgrade it, and operate it to regulatory compliance, effectively transferring the risk from the mill to Hyder.
According to Singh, most mill managers today, and their staffs, are spending an inordinate amount of on-the-job time worrying about environmental matters. "And they're probably spending as much or even more time after work and on weekends worrying about it. That's why risk transfer is so important. Mill managers and production supervisors have more important things to be concerned about than water or wastewater treatment. Mills are in business to make pulp and paper products, and not to run waste treatment facilities. Those operations can and should be transferred to experts who know how to run them most efficiently," he insists.
The whole hog (back to top)
In contract handling of a mill's wastewater plant, Hyder typically provides full services to operate and maintain the facility. It staffs the plant with well trained personnel experienced in treatment facility process control and maintenance procedures, and who have required operator certification. It pays all expenses involved in normal operations of the plant, including costs for personnel, electricity, fuels, laboratory chemicals and services, process chemicals, and other normal operating supplies.
Hyder also handles all maintenance and repair of equipment, buildings, and grounds. It conducts all sampling and laboratory testing required for control and permit compliance, and prepares, signs, submits, and maintains all monitoring and operating reports. And, especially important, it covers any permit fines that might arise.
Hyder has built an impressive list of successful infrastructure outsourcing projects. For the past 100 years, it has provided infrastructure services in managing public and commercial water, wastewater, electricity and gas supplies, roads and railways, ports, and airports. Currently it manages ongoing infrastructure programs in 35 countries. "Hyder is a new kind of company," Brown says. "Our business is infrastructure in virtually all areas vital to everyday life. Around the world, we finance, advise on, develop, design, and operate infrastructure."
Singh adds that Hyder can be a technical consultant, contractor, partner, or all three. "We want to operate at a level of involvement that best supports a company's core business objectives," he says, "so that the mill can remain focused on its core activities while juggling the competing pressures of making a profit. And the latter certainly hasn't been an easy task during the past couple of years."
Pontevedra mill project (back to top)
Brown further points out that "our experience with the pulp and paper industry is worldwide, ranging from advice and design of water and wastewater treatment facilities to assessing the environmental impact of a paper mill's waste."
One of Hyder's most recent projects, for example, was at a pulp and paper mill in Galicia, in northwest Spain. The company was commissioned to assess this mill's effluent discharge into the Ria de Pontevedra. Because of the area's outstanding natural beauty and sheltered waters, it is an important tourist destination and major aqua-culture site.
Flow measurements and water samples were collected for two months from all nine of the effluent channels on the industrial site. Some analyses were carried out in a temporary laboratory, and others were transported weekly to Hyder's labs in the UK. At the time of the survey, the work was highly confidential on the part of the industrial plants.
The principal objective of the project was to advise on the compliance of the combined discharge with Spanish and EC legislation. The provincial government was particularly interested in any mercury being discharged from the chlor-alkali plant and any dioxins being generated in the pulp mill's bleaching operations.
At the time, industrial discharges were being made along the bank of the river. Based on Hyder's recommendations, a new outfall line was constructed to discharge into deep water. The industrial effluent is being combined with municipal effluents from a new wastewater treatment plant servicing several nearby towns. The impact of the new discharge on local aqua-culture sites and bathing beaches was predicted by Hyder using advanced modeling techniques. The deep water outfall line saved the mill potentially expensive mitigation in the future and/or additional treatment capacity, Brown emphasizes.
Hyder was subsequently awarded a 12-month contract to monitor mercury discharges from the chlor-alkali plant.
For more information: Hyder North America, 270 Granite Run Dr., Lancaster, PA 17602-6822. Tel: 717-560-6059. Fax: 717-560-0577
By Ken Patrick
Dr. Rudra Singh, recently appointed senior consultant for Hyder North America, headed Scott paper Co.'s worldwide bleaching technology for more than 20 years, and served as manager of the joint Impco/Scott/W.R.Grace ozone pilot plant project in 1972-73. He has been credited with developing much of today's non-chlorine bleaching technology, and has been referred to as the "father of ozone bleaching."
Singh holds more than 34 U.S. and foreign patents and has authored or contributed to some 90 technical papers and 10 book chapters, and has edited two major books on pulp bleaching (TAPPI) and delignification of pulps with oxygen, ozone, and peroxide (Uni Press, Japan). In 1987, he was elected a TAPPI fellow. He has served as an adjunct professor at North Carolina State University in Raleigh, Drexel Engineering University in Philadelphia, University of Auburn in Alabama, University of Washington in Seattle, and currently as adjunct professor of chemical and metallurgical engineering at the University of Nevada in Reno. In addition to his duties with Hyder, Singh is president of Emerging Technology Transfer Inc., a company engaged in the promotion and transfer of environmentally benign technologies.
Singh can be contacted at: 853 Lighthouse Court, Reno NV 89511. Tel: 702-853-7617, Fax: 702-853-5102 , e-mail: rpsingh@aol.com.