Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, July 17, 1994 TAG: 9407180122
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: COVINGTON LENGTH: Long
The Covington mill will mark the first year of operation of the new machine in October. It is a state-of-the-art piece of equipment that was a year late going into production because of construction delays caused by the 1990-91 recession.
When in 1989 Westvaco announced plans for the new machine, called No. 2, and a new chemical recovery boiler, it represented the largest single capital investment in Virginia business history - $530 million.
Since completing the project, Westvaco has renovated two other paperboard machines at Covington. In the period from 1983 to 1993, the company more than quadrupled its investment at the mill from $285 million to $1.27 billion. Statewide - at packaging plants in Richmond, an activated carbon plant in Covington and 242,335 acres of woodlands - the New York-based corporation increased its investment in its Virginia operations and property over the same period from $407 million to nearly $1.5 billion.
As the country continues its climb out of the decade-beginning recession, Westvaco' investment at the Covington mill is starting to pay off.
"We are now selling at levels considerably higher than a year ago," said Westvaco spokesman Robert Crockett. "We are now exceeding our goals in terms of where we wanted to be."
\ Papermaking is a very old process. The word paper itself comes from "papyrus," the reed that ancient Egyptians used for making writing material.
Although Westvaco's new paperboard machine uses the most modern of computerized technology to make high-quality products, science has not totally replaced the art at paper-making's roots.
Cleveland Tyson, 50, has worked for Westvaco for 30 years. As a team leader and machine operator, he oversees the operation of the mammoth No. 2 paperboard machine from colorful panels of computer screens located in two control rooms and at various work stations along the machine's 845-foot length.
The high technology, though, doesn't eliminate the need by Tyson and his two assistants to run their hands over the paper as it comes off the machine. They feel for imperfections and hit a reel of paper with a stick to see if it sounds right.
Years ago, said Alvin Reed, 47, Tyson's first assistant, mill operators would walk along a machine and tell whether the moisture in the paper was right by the amount of static electricity pulling at the hair on their bare arms.
Such traditional methods and tricks of the trade are ways for an operator to make sure that what his instruments are telling him is the truth, said A.M. "Lon" Rollinson, a paper mill superintendent.
A Westvaco employee for 14 years, Rollinson has an undergraduate degree from the California Institute of Technology and a doctorate from the University of Illinois. He's the kind of guy who says a "neat" vacation would be traveling around the country taking guided tours through other factories. He obviously is proud of the No. 2 machine's high-tech capabilities.
The machine was designed by Westvaco's own engineers and was built by Voith in Germany. The engineers used the knowledge they had gained from the mill's No. 1 machine, which was completed in 1986 at a cost of $325 million, to design No. 2.
A closely guarded feature of the machine are the coaters that put a latex-like, pure white coating on each side of the 24-foot-wide paperboard. One of the machine's special characteristics is that it can produce a thinner, less-dense grade of paperboard, which gives the company's customers more printing surface per ton. The thinner paper, however, maintains the desirable characteristics of thicker papers such as stiffness and smoothness.
The electrical drive system for the No. 2 machine was made by the General Electric Co.'s industrial drive systems plant in Salem. GE Drive Systems has computerized the Westvaco mill over the past seven years, beginning with controls for the No.1 machine, Rollinson said. The 158 GE units control the speed and tension of the paper as it passes through the machines.
The new machine is built so precisely that a 1,000th-of-an-inch variance can affect the quality of the paper it produces. "Really, the whole machine lives and dies by a 1,000th of an inch," Rollinson said. The unit this month set a daily production record of 1,077 tons of first-quality production.
Westvaco has not established a quota for the amount of waste that it will allow during a manufacturing run. "We don't set a standard as far as rejects; we try to make as much good paper as we can," said Curtis Linton, another first assistant operator on the No. 2 machine and a former employee in Westvaco's quality control department.
\ Like many other U.S. manufacturers, Westvaco has begun a quality management program. Signs placed strategically around the mill carry a message from mill manager Bill Small about the company's "People Dedicated to Quality" program.
"The objective of the Covington operations is to be recognized by our customers and the industry for our leadership and the excellence of our products services and systems," Small wrote.
At Covington, each production shift meets once a month and discusses quality issues. On the No. 2 machine, Supervisor Kenneth Bertram meets weekly with the machine's operators to talk quality. "We've made improvements on certain grades simply by listening to the operators," he said.
But talking about quality with the company's customers probably pays off more than all the conference room talk, Rollinson said. The company holds five seminars for customers each spring and fall at the mill, when it solicits their suggestions about improving the quality of the company's paperboard.
In 1991, the Covington mill was the first in North America to achieve the International Standards Organization's 9002 certification, a citation for consistent quality of its manufacturing processes. The company has since sought and received ISO rating for 13 of its other plants, including three other paper mills.
ISO certification is important to the company's efforts to export its products to Europe and Asia, where buyers often require the certification of companies they buy from. In 1989, when the company announced plans for the No. 2 machine and new recovery boiler, it was exporting roughly 18 percent of its product. Currently, that figure is more than 30 percent.
All of Westvaco's decisions, including that to build the new machine, are market driven, said Jack Hammond, senior vice president and bleached-board division manager. "We're never reacting to building bigger and better."
The decision to build No. 2 machine followed extensive marketing survey and analysis it was evident that the company needed the new machine to grow and serve its most important customers, Hammond said. At the time Westvaco's ability to make products was less than the market demand, Crockett said.
The No. 2 machine, which can produce up to 2,000 feet of paperboard a minute or more than 250,000 tons per year, increased the paperboard capacity of the mill by 40 percent to 875,000 tons per year. The mill has four paperboard machines and another machine that produces paper used to make corrugated boxes.
Besides the investment in the new boiler and paperboard machine, Westvaco spent $75 million at the mill last year for a plant to clean and process recycled paper into pulp for making new paperboard. In addition to is brand-name Printkote paperboard, the mill also makes Printkote Eagle, which contains recycled fiber. The new product is the only recycled paperboard that meet U.S. Food and Drug Administration requirements for direct contact with food, the company said.
\ Construction of the new boiler, paperboard machine and recycling plant created hundreds of temporary jobs at the mill and roughly 150 permanent jobs. Its most significant effect, however, was in ensuring the long-term presence of Westvaco in Covington and Alleghany County.
The company began operations in Covington in 1899. Its plant now stretches 1.5 miles along the Jackson River, a James River headwater.
The mill is the biggest employer in Virginia's Alleghany Highlands, providing 1,800 jobs. That figure includes those working at a plant in Low Moor, where paperboard is coated with plastic, and at an activated carbon plant and research lab in Covington.
Activated carbon, a form of carbon filled with little holes that soak up pollutants like a sponge, was once a byproduct of papermaking but no longer. The carbon plant supplies all the activated carbon used in U.S.-made automobiles and most for those made in Europe.
Staffing of the No. 1 paper machine in the mid-1980s was the focus of a dispute between the United Paperworkers International Union and management over seniority rights at the mill. And the union also was angered later with the choice of a nonunion contractor, BE&K Construction Co. of Birmingham, Ala., to build the No. 2 machine.
But labor and management relations now are much better. "We're in pretty fair shape as far as labor relations," said Roger Stover, vice president of Paperworkers Local 675.
There were many discussions between labor and management before the No. 2 machine went into production, Stover said. Westvaco learned from its experiences with the No. 1 machine and kept the union informed and asked for its opinion as work went ahead on the No. 2 machine, he said.
The union's current wage contract with the company expires in December 1995.
The average wage at the Covington mill is more than $15 an hour, the company said. Employees are drawn from Roanoke, Rockbridge, Bath and Highland counties and West Virginia as well as Covington and Alleghany County.
\ The bleached board division is Westvaco's largest business segment. The company also operates plants making fine printing papers in Wycliffe, Ky.; Luke, Md.; and Tyrone, Pa., and a cardboard plant in Charleston, S.C. The company has two paper mills in Brazil.
For the first six months of Westvaco's 1994 fiscal year, which ended April 30, the company's sales of $1.2 billion set a record and were a 5.5 percent increase above the same period last year.
The company's volume gains were greater in the second quarter than dollar gains due to lower average prices for Westvaco products.
Earnings for the first six months were 48 cents per share of common stock, compared with $1.44 per share for the same period in the 1993 fiscal year. However, the first-half 1993 results included a gain of 83 cents per share from accounting changes.
Company President John Luke Jr. said he was encouraged by volume gains and improved prices in some sectors but noted that white-paper prices had continued to slide.
Westvaco's business strategy since the early 1980s has been to de-emphasize commodity products like bulk paper and to develop a variety of specialized products such as packaging for specific markets. Such a strategy, the company said, helps stabilize its earnings through downturns in business.
The new No. 2 machine, Luke said, will help the company make even more distinctive products. "We now have special capabilities to produce paperboard with less fiber but without any sacrifice in strength, surface or performance characteristics," he told shareholders at this year's annual meeting.
Wall Street is fairly optimistic about the future of the company's stock price with no securities analysts advising Westvaco shareholders to shed their stock, according to Robert Culp, manager of the A.G. Edwards brokerage office in Roanoke.
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