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International Paper Reports ‘Solid’ First Quarter Despite Cantonment Explosion
April 28, 2017
International Paper delivered a sold financial first quarter of 2017, despite the January explosion at the company’s Pensacola Mill in Cantonment.
Thursday, IP reported first quarter 2017 net earnings of $209 million (50 cents per share), compared with net earnings of $218 million (53 cents per share) for the fourth quarter of 2016 and net earnings of $334 million (81 cents per share) in the first quarter of 2016.
“International Paper delivered a solid first quarter in the face of several challenges, including the digester incident at our Pensacola mill and higher input costs driven by a significant rise in OCC (corrugated container) prices,” said Mark Sutton, chairman and chief executive 0fficer. “Given the market fundamentals across most of our businesses in combination with several IP commercial and operational initiatives, we expect improved results pointing to a particularly strong second half as well as positive momentum entering 2018. I remain very confident in IP’s ability to generate significant year-over-year earnings growth and continued strong cash flow in 2017.”
IP’s Cantonment facility experienced a digester explosion on January 22 that sent “black liquor” and pulp raining down into neighborhoods outside the mill and causing significant damage on site.
An investigation indicated that an explosive atmosphere was created by a combination of off-gasses normally produced in the pulping process and air introduced to maintain pressure while the vessel was not in operation. The explosive nature of the off-gasses and air combination was likely related to the extended period of mill down time prior to the incident where no chips and liquor were flowing into the digester. The gas mixture, combined with one of several possible ignition sources, provided the necessary components for the explosion.
The Cantonment mill resumed full operations in early April. The company estimated that the total costs related to the explosion to be between $80 and $120 million, with the majority of those costs expected to be recovered through insurance coverage.
Pictured top: Emergency crews on the scene following an explosion January 22 at International Paper in Cantonment. Pictured below: First responders coordinate their response efforts from a command post at IP shortly after the explosion. Pictured bottom: A vehicle that was passing the mill at the time of the explosion covered in black liquor from the explosion. NorthEscambia.com file photos.
Comments
3 Responses to “International Paper Reports ‘Solid’ First Quarter Despite Cantonment Explosion”
REGARDING:
“I am of the opinion that IP should buy out the subdivision, through attrition or and outright buyout.”
I am of the opinion that IP should not buy out the subdivision, through attrition or and outright buyout.
“Powerful acids and bases” could not have existed in it at the same time; acids neutralize bases — producing salts, bases neutralize acids — producing salts. All are ionic and dissolve in water, washing away to Perdido Bay.
MSDS tells what can be in it, not what was at any given time. These were chemicals used to digest wood fibers to convert them to just cellulose and the sugars they release and the wood being digested and the cellulose and the turpentine and soaps. The main reason it can cause skin burns is that it is normally hot. That lasted several seconds after the explosion and then it cooled.
David for reason
I am of the opinion that IP should buy out the subdivision, through attrition or and outright buyout.
Take a look at the MSDS (materiel safety data sheets) for the chemicals used at the mill, hundreds, if not thousands of tons of wood chips, powerful acids and bases. There is great potential for disaster, for those living in proximity to the mill.
No one saw this one coming, not until a few minutes before it happened. An emergency klaxon and community evacuation drills would be a good measure.
As we like to say, rock on!