OptsyEagle Posted April 23, 2012 Share Posted April 23, 2012 I did read that and found it quite interesting. The thing about this story that many of the analyst get confused about is the new dissolving pulp capacity coming online in 2013 and beyond. They take this announced capacity and compare it to the existing DP capacity and think that it will swamp the dissolving pulp market. What they need to do is understand that the cottom market and the rayon market are getting more and more interlinked, with the cotton market over 10 times the size of the DP market. When you combine both markets you will find that the dissolving pulp additions will have a tough time making up for the reductions in cotton supply in 2013 and beyond. Even if cotton supply went sideways the additional DP supply would only add a few percent to the combined cotton/DP market and would still have a tough time keeping up with normal growth. Lastly, I do not believe the growth will be normal. As the developing market gets even the slightest bit wealthier, they are going to want a second pair of pants, perhaps a shirt without a rip in it and a pair of shoes would certainly be nice. Link to comment Share on other sites More sharing options...
tombgrt Posted April 23, 2012 Share Posted April 23, 2012 Agreed OptsyEagle. I'm only vaguely aware of the market economics compared to the experts out there but what I have read confirms my trust (mainly stems from his impressive track record) in Chad's vision. There is no reason to expect prices below $1000-1200 and if we add in the contracts and reported DP quality we can conservatively take the $1200 level as a bare minimum over the longer term. It's funny to see that cotton is now trading higher than in mid 2010 when FTP's stock price was about the same as today. This while earnings of Thurso where still far away and when there were plenty of operational risks to consider. Sure, Landqart was doing better then but on the other hand Dresden has much higher EBITDA now. And let's not forget that LSQ wasn't announced yet. Link to comment Share on other sites More sharing options...
motownsf Posted April 23, 2012 Share Posted April 23, 2012 Fortress Paper Announces New Appointments VANCOUVER, BRITISH COLUMBIA, Apr 23, 2012 (MARKETWIRE via COMTEX) -- Fortress Paper Ltd. CA:FTP -1.17% ('Fortress Paper" or the "Corporation") announces the appointment of Andre Boucher as Chief Operating Officer of Fortress Specialty Cellulose Inc., a wholly-owned operating subsidiary which produces dissolving pulp. Mr. Boucher has over 30 years of industry experience in the specialty cellulose sector including 24 years at Tembec Inc. where he was the General Manager of the Temiscaming dissolving pulp mill. Mr. Boucher was responsible for overall mill optimization and development of specialty products, including a full range of acetate and other specialty pulps. Most recently, Mr. Boucher was General Manager of Ethanol Operations for Suncor Energy Inc. where he developed the facility from concept to an efficient operating mill. Chadwick Wasilenkoff, Chief Executive Officer of Fortress Paper, commented: "Andre brings a wealth of experience and technical talent to Fortress Paper at a time when we are growing our dissolving pulp business. We feel his mill optimization and unique experience in transitioning a viscose-grade dissolving pulp mill to a specialty-grade dissolving pulp mill will further enhance our already strong specialty cellulose team. Andre's addition provides us with more flexibility as we balance our key personnel between Thurso and our other strategic projects." In addition, Fortress Paper is pleased to announce that Marco Veilleux has been promoted to Vice-President, Business Development and Strategic Projects of Fortress Paper from his former role as Chief Operating Officer of Fortress Specialty Cellulose Inc. Mr. Veilleux was an important member of the executive team which managed the successful staffing, startup and conversion to dissolving pulp at the Fortress Specialty Cellulose Mill. Mr. Veilleux will focus on special and strategic projects, manage risk and compliance matters and will assume other key corporate responsibilities within Fortress Paper. http://www.marketwatch.com/story/fortress-paper-announces-new-appointments-2012-04-23-831140 Seems to me like a spinout of the European paper businesses is likely and that Fortress will be a pure play dissolving pulp company...The organizational restructuring sure is pointing us in that direction. Link to comment Share on other sites More sharing options...
Liberty Posted April 24, 2012 Author Share Posted April 24, 2012 http://www.pulpandpapercanada.com/news/the-man-behind-the-mill-andr-boucher-of-the-specialty-cellulose-division-of-tembec-inc/1000149916/ Old, but relevant to new hire. Link to comment Share on other sites More sharing options...
tombgrt Posted April 24, 2012 Share Posted April 24, 2012 Just saw that Fortress has updated its website. Seems to work properly now. ;) http://www.fortresspaper.com/ Link to comment Share on other sites More sharing options...
Guest valueInv Posted April 25, 2012 Share Posted April 25, 2012 Falling 3.5% today. Anyone know why? Link to comment Share on other sites More sharing options...
tombgrt Posted April 25, 2012 Share Posted April 25, 2012 I just bought more at $23.50 (yes, so far the year low. but for how long? 8)). Madness as I just bought more last week but it's not that big of an increase in my overall position. Luckily I have low commision costs and no taxes to pay. :D Link to comment Share on other sites More sharing options...
Liberty Posted April 25, 2012 Author Share Posted April 25, 2012 Falling 3.5% today. Anyone know why? I think it's just that Mr. Market loves to test the resolve of value investors :D I bought a little bit more today. Wish I could back up the truck, but there are other things I'm working on. Link to comment Share on other sites More sharing options...
keerthiprasad Posted April 25, 2012 Share Posted April 25, 2012 I have already bought too much this week and last week! Wish I had more cash. Link to comment Share on other sites More sharing options...
Liberty Posted April 25, 2012 Author Share Posted April 25, 2012 A recent report on FTP mentions that about half of the planned DP capacity additions around the world have been postponed or cancelled (and they expect more to be cancelled or postponed), and that the recent DP cost of around 1.2k isn't high enough to allow most of these capital-intensive projects to go forward (they were announced when DP was above 2k). Good news for FTP, and shows the importance of being the low cost producer. Link to comment Share on other sites More sharing options...
tombgrt Posted April 25, 2012 Share Posted April 25, 2012 Exactly Liberty. Even if the DP mill only gets $200 EBITDA/produced ton then the current market cap is still cheap. I'm very confident about the long term prospects of this company. It's now over twice the size of my second position and I only have four positions. Link to comment Share on other sites More sharing options...
Liberty Posted April 25, 2012 Author Share Posted April 25, 2012 I'm very confident about the long term prospects of this company. It's now over twice the size of my second position and I only have four positions. Wow, you and I have at least 2 things in common :) (though FTP isn't my biggest position) Link to comment Share on other sites More sharing options...
tombgrt Posted April 25, 2012 Share Posted April 25, 2012 Hehe. I'm also looking at ALS but haven't really got the time atm to dig in deep. I like the story and margin of safety with no debt, cash position and catalysts. Will be for later! Link to comment Share on other sites More sharing options...
keerthiprasad Posted April 25, 2012 Share Posted April 25, 2012 Exactly Liberty. Even if the DP mill only gets $200 EBITDA/produced ton then the current market cap is still cheap. I'm very confident about the long term prospects of this company. It's now over twice the size of my second position and I only have four positions. I'm holding at about 50%. 4 positions total too haha. I like the margin of safety as well. Link to comment Share on other sites More sharing options...
jeffmori7 Posted April 25, 2012 Share Posted April 25, 2012 Liberty and Tom, I was wondering what is your actual position in FTP? Personnally, FTP is my 4th largest position with around 7% of my actual portfolio, and still lowering! And congratulations to keep such a concentrate portfolio, you're showing a lot of discipline. FOr me, I can always think of new business that I would like to own..limiting myself to my 4 best ideas would be very difficult. Link to comment Share on other sites More sharing options...
shalab Posted April 25, 2012 Share Posted April 25, 2012 What is your IV estimate for ftp? Link to comment Share on other sites More sharing options...
tombgrt Posted April 25, 2012 Share Posted April 25, 2012 Liberty and Tom, I was wondering what is your actual position in FTP? Personnally, FTP is my 4th largest position with around 7% of my actual portfolio, and still lowering! And congratulations to keep such a concentrate portfolio, you're showing a lot of discipline. FOr me, I can always think of new business that I would like to own..limiting myself to my 4 best ideas would be very difficult. 48% in FTP, other positions are approx. 22%, 18% and 12%. I don't think you can extrapolate my portfolio to the average here. I have only a 5-number portfolio so my largest position is still very small for a lot of guys here. I won't be crippled for life losing half my savings if I turn out to be wrong. My position sizing is somewhat based on Kelly but it's no exact math. Plenty of things on my watchlist that seem good value but it doesn't make any sense to me to put something like $5k in my 6th, 7th, ... best idea. I want to put a lot in my 4-5 best ideas and dig deep into them. It's very manageable with such a low capital base. Link to comment Share on other sites More sharing options...
alertmeipp Posted April 25, 2012 Share Posted April 25, 2012 How big is DP's market? Can FTP sell futures on it? Link to comment Share on other sites More sharing options...
jeffmori7 Posted April 25, 2012 Share Posted April 25, 2012 Shalab, without LSQ, I would say FTP already worths above 60$ if it can delivers around 100M EBITDA at Thurso, and that is conservatively valuing Dresden and Landquart. Link to comment Share on other sites More sharing options...
PlanMaestro Posted April 26, 2012 Share Posted April 26, 2012 Thank you all for a very informative thread. Has anyone gone to the DP plants? Link to comment Share on other sites More sharing options...
PlanMaestro Posted April 26, 2012 Share Posted April 26, 2012 AskThe Builder.com on why non-woven wallpaper is so cool. I did not even know what it was. Link to comment Share on other sites More sharing options...
OptsyEagle Posted April 26, 2012 Share Posted April 26, 2012 AskThe Builder.com on why non-woven wallpaper is so cool. I did not even know what it was. I would say that guy gives it a big thumbs up. It does sound like a much better product then the traditional wallpaper was. I can see why it's growing so much market share. Link to comment Share on other sites More sharing options...
tombgrt Posted April 26, 2012 Share Posted April 26, 2012 I think we can expect the non-woven wallpaper to take over the whole segment in the next 10 years. The question is whether Dresden will be able to expand even further than the current 55000 ton and maintain it's current market share and increase it's EBITDA. Chad is projecting "only" 10% growth for Dresden in the next 2 years so it doesn't seem likely. Wouldn't be suprised if he sold it and later Landqart. Link to comment Share on other sites More sharing options...
tombgrt Posted April 28, 2012 Share Posted April 28, 2012 http://fortresspaperblog.com/fortress-paper-release-quarter-2012-earnings.htm Fortress Paper to Release First Quarter 2012 Earnings Fortress Paper Ltd. (TSX:FTP) (“Fortress Paper” or the “Corporation”) announced today that it intends to release its first quarter financial results for the period ended March 31st, 2012 after the close of the market on Monday, May 14th, 2012. In connection with the release of its results, Fortress Paper will host a conference call Tuesday, May 15th, 2012 at 9:30 a.m. (PST) to discuss the financial results and the Corporation’s operations. Mr. Chadwick Wasilenkoff, President & Chief Executive Officer, Kurt Loewen, Chief Financial Officer and Peter Vinall, President and Chief Executive Officer of Fortress Specialty Cellulose Inc. will host the call. To participate in the conference call, please dial one of the following numbers: Dial In Numbers: 604-681-8564 Vancouver 403-532-5601 Calgary or International 780-429-5820 Edmonton 416-623-0333 Toronto 613-212-0171 Ottawa 514-687-4017 Montreal Toll Free Dial in Number: 1-855-353-9183 from Canada and USA Participant Pass Code: 15086# Conference Reference Number: 770462 A replay of the conference call will be available for 7 days. To access the replay, listeners may dial 1-855-201-2300 from Canada & the USA. The conference reference number is 770462 # and the participant pass code to access the replay is 15086 #. Could someone take notes of CC on Tuesday? I won't be able to listen in or access the replay. TIA. :) Link to comment Share on other sites More sharing options...
bathtime Posted April 28, 2012 Share Posted April 28, 2012 tombgrt, I may be able to get you a recording of the call, get in touch with me afterwards. If anyone has a recording of the LSQ conference call, please message me. Link to comment Share on other sites More sharing options...
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