A method for produce both kraft pulp and alcohol from hardwood chips or the like. The chips are subjected to mild acid prehydrolysis following by mild caustic pre-extraction. The withdrawn hydrolysate has insufficient furfural to inhibit microorganism growth, and both the hexose and pentose sugars in the hydrolysate are fermented to ultimately produce ethanol, butanol, or the like. The chips - after caustic pre-extraction - are subjected to a sulphate cook, and wash, and the resultant pulp is kraft pulp and even has viscosity and tear strength characteristics more desirable than that of conventional kraft pulp. The pulp can be subjected to oxygen delignification, and achieve a higher K number in fewer subsequent bleaching stages than conventional kraft pulp.