USPS Announces Postage Increase

The Postal Commission recently approved a rate increase of 5.4% for nearly all United States Postal Services. The rates are expected to take place in mid January. First class stamps will increase by $0.02 cents.
Paper.com anticipates many end users that print multiple page documents will begin to consider lighter weight paper in an effort to reduce mailing costs.

Top Printers Announced

Top Printers, by category, was recently confirmed-
Book Printers
1-QuebecorWorld -Sales($millions)-$660
2-Visant Corp -Sales($millions)-$638
3-Banta -Sales($millions)-$371
Direct Mail Printers
1-QuebecorWorld -Sales($millions)-$594
2-Visant -Sales($millions)-$245
3-Banta -Sales($millions)-$212
Catalog Printers *
1-QuebecorWorld-Sales($millions)-$1,056
2-QuadGraphics -Sales($millions)-$864
3-Arandell Corp -Sales($millions)-$238
*RRDonnelly not include - printer not release sales by segment
Publication Printers
1-Qubecor World -Sales($millions)-$1,782
2-QuadGraphics -Sales($millions)-$522
3-Brown Printing -Sales($millions)-$320

Price Increases on tap for Most Paper and Pulp grades

-Packaging grades have experienced substantial supply closure and strong demand
-Operating rates 95.4%
-Price increases have been announced for beginning of New Year
-Printing and Writing demand is even to slightly down compare to 2004; depending on grade
-Price increases for all uncoated grades but copy papers, has been announced for New Year
-A lot of resistance witnessed from end users - although costs for producers have certainly increased
-Newsprint demand continues its trend downward
-Many machines manufacturing newsprint have either been closed or modified to produce high bright grades
Pulp demand has decreased, consistent with paper manufacturing equipment closures
-Many pulp mills have been shuttered
-Pulp producers have announced a January price increase of $20/ton
-Meanwhile, I wonder if producers are able to charge current established prices.
-Northern Bleached Softwood (NBSK) announced price from $640 to $660

Digital Printing becoming more Popular

The printing market has witnessed a steady growth in Digital Printers. While still not able to compete with offset on speed, digital is becoming increasingly faster and more flexible. The Xeikon 5000, for example, can handle 27 lbs text to 120 lbs cover stock at speeds of up to 130 pages per minute. Although the lack of substrate (paper) options continues to be a limiting factor the ability to produce quality small runs makes digital a popular printing method.
Paper.com carries most of the popular grades and sheet sizes for digital printers; most are in inventory and ready for immediate shipment.

White Birch Paper Company to Buy a Paper Mill

The White Birch Paper Company announced they have reached an agreement with Papier Masson to acquire this newsprint manufacturer. Papier Masson has a capacity of 234,000 tons off one paper machine. This acquisition will make White Birch the third largest North America newsprint producer.

End of the Year Uncoated Paper Recap

Most end users paid slightly less for their uncoated copy paper in December, while other uncoated grade’s pricing remained unchanged. All major paper producers announced price increases for non-copy, uncoated commodity papers for January. Domtar and Weyerhaeuser announced machine shut downs equating to nearly 400,000 tons - this decreased supply should assist the market pricing discipline. Conventional wisdom agrees more consolidation will occur - many are betting on a combination of Weyerhaeuser, Domtar and Boise.

International Paper Executive Quits

International Paper Company's president, Robert Amen, announced his resignation. International Paper's profit has suffered just as the remainder of the industry has. Paper prices have not risen as fast as production costs. International Paper is looking to divest of several divisions.
Paper.com has the entire line of International Paper Printing and Writing grades, in stock and ready for immediate delivery.

Recent Paper Machine Closures

UPM-Kymenne - the world's third largest papermaker will convert a paper machine that produced 120,000 tons / year of magazine papers (Jaaemsaenkoski Plant) to a specialty machine producing label papers.

Weyerhaeuser will close two more paper machines; one in Dryden, Ont - producing uncoated papers and a second in Prince Albert, Saskatchewan.

Mohawk Fine Paper offers new HP Digital paper

Mohawk Fine Paper has recently announced the introduction of Superfine i-tone. This is a grade designed for the HP Indigo Digital Presses and does not include the Sapphire Coating like its predecessor Superfine Text and Cover did. The largest advantages are more economical cost and a longer shelf life.

Paper Companies slow down on Capital Expenses

Many paper mill managers continue frustration in not having capital available to allow for updating equipment. With consolidation, globalization, increased costs, and lack of capital, North American mills face an increasingly difficult market to effectively compete. Many mill managers question how North American Paper mills will survive. The industry clearly is not generating required profits to allow for reinvestment in plant, processes, and equipment. Most capital spending today is allocated to making the facility more energy efficient, accordingly, projects that improve pulping and paper making operations are non-existent.

Cellu Tissue Idles Paper Machine

Cellu Tissue announced it will idle one of three paper machines in the Interlake Paper mill in St Catherines. Ont. The paper machine produced 11,000 tons/year of Machine Glazed (MG) paper on a fourdrinier paper machine. End use products included waxing base, laminating, gift wrapping, fast food wrappers, and toilet tissue.

Newsprint market continues to Decline

Both Bowater and Abitibi-Consolidated (two of the largest USA newsprint producers) have reported that standard newsprint consumption is declining. Primary causes stated included fewer US Dailies (91 dailies shut down 1994 to 2004); switching to lighter paper; and producing a narrower newspaper. Many paper producers have converted newsprint paper machines to production of value added grades such as high bright, directory, super calendar, and base sheet for coated papers. Since 2003, an estimated 3million tons of newsprint capacity has been retired.

Dun Paper to Buy Valentine Paper Mill Assets

Meriturn Partners has offered to purchase the Valentine Paper mill in Lockport, LA. Meriturn also owns Dunn Paper (Port Huron, MI) which is a specialty manufacturer for flexible packaging, food service, and bag manufacturers. Valentine specializes in production of latex based papers for medical packaging, wall paper, labels, filtration, and specialty bags. The mill has 2 machines producing 100TPD.

Avery Dennison Label to Reduce Labor and Capacity

"At the board meeting in December, the company restated its intention to divest itself of certain of its businesses. In October, Dean Scarborough (CEO) had said that the company was considering a number of divestitures of non-strategic, low-margin businesses, which would reduce annual sales by approximately $70 million, with minimal impact to earnings from operations. Such divestitures. It was predicted that the pretax savings could be in the range of $40 million to $50 million.
The company plans to reduce the number of positions by approximately 700 to 900 around the world,
Fasson North America division also plans to close its pressure sensitive material production plant in Ajax, ON, Canada by the end of next year.
Avery Dennison, based in Pasadena, CA, USA, has more than 21,000 employees worldwide.
As reported by Label and Narrow Roll Magazine.
Paper.com carries the complete line of Avery Dennison's Fasson Division pressure sensitive labels.

International Paper is First to increase Price for Uncoated White

International Paper just announced a price increase of $60.00/ton ($3.00/cwt) for uncoated white paper (offset). Given the cost pressures from higher energy, freight, and chemical costs - we believe most of the other producers will follow this announcement - inspite of weak demand. Note, Paper.com has reported manufactures have announced almost 11million tons of curtailments - from International Paper, Weyerhaeuser and, most recently, Domtar. This should assist but expect more consolidations in this segment. Paper.com has over 15,000 items on site and ready for immediate shipment.

International Paper Coated Business for Sale

As Paper.com has reported in past, International Paper is marketing their Coated Paper division. Industry speculation concludes Cerberus/New Page is among the leading acquisition candidates. We reported that New Page acquired MeadWestvaco’s coated division earlier this year; accordingly, this purchase would be very strategic.

Coated Mill takes Down Time

UPM announced it would shutdown at its Miramichi, Canada mill in February for three months. The mill produces about 450,000TPA of magazine paper. This to be about 7% of North American Capacity, based on about 6.3MM tons of LWC (magazine paper) capacity in North America. Since winter tends to be seasonally slow, this closure should help market sentiment and will probably “support” pricing at a seasonal low-point. UPM cites a high cost structure at the mill, likely a result of high-energy costs as well as a strong Canadian dollar.
Of particular note, you may recall UPM recently settled a 7 month strike at this mill.
www.paper.com offers all the major paper grades for magazines.

Weyerhauser to shut down NC containerboard machine

Weyerhauser Paper stated that on November 29 it indefinitely curtailed production on its 350,000-tons-per-year containerboard machine at its Plymouth, NC, facility.

Stora votes to Strike at Port Hawkesbury Mill

A two-day strike ballot by Stora Enso’s Port Hawkesbury mill workers resulted in a 98.4% vote in favor of strike action, according to union officials. The Union authorized the vote after a breakdown in contract negotiations. Workers at the Nova Scotia mill have been without a contract for over a year. An actual work stoppage at the mill is subject to a 14-day cooling off period and a further 48-hour notice of strike action. During that time, both sides will meet with a conciliator to try to reach an agreement.

Domtar Restructures Paper Mills

Domtar announced permanent workforce reduction of approximately 1,800 positions across the Company, that includes the reorganization announced in December 2004 at the Cornwall mill. Highlights of the plan include-
-Permanent closure of the Cornwall, Ontario mill
-Permanent closure of PM No.10 and PM No.11 of the Ottawa, Ontario mill
-The decision to sell the Vancouver, BC mill
-Closure of the sawmills at Grand Remous and Malartic, Quebec with the intention of creating a value-added project using the existing infrastructures
-A cost reduction program as follows:
-Reduce selling, general, and administrative expenses by eliminating approximately 100 additional corporate and divisional positions, as well as other SG&A expenses
-Implement further cost reductions at the mill level by eliminating approximately 200 additional operational positions
-Consolidate North American administrative offices in Montreal and Cincinnati.

FiberMark Working Hard to Emerge from Bankruptcy

FiberMark announced that it is working on a revised plan for reorganization from bankruptcy. The creditors have illustrated interest in the new plan - believing to reclaim up to 70% of their claims. The company received financing from Silver Point Finance.

USA Chemical prices rise to Paper Manufacturers

Nalco, a major suppier of chemicals to the paper industry, announced a 20 percent price increase to paper industry clients for paper sizing chemicals and a 10 percent increase for silicone-based products.

North American Containboard Producers raise Prices

Most major North American containerboard producers last week followed Weyerhaeuser in announcing prices increases on linerboard and medium for early January. If successful, the increase would be the second in three months and reflects tight supply and intense cost pressure.

Shipping Paper can be Expensive

The paper industry has recently witnessed an increase in shipping charges. Most freight carriers are now introducing a fuel surcharge due to the escalating prices.

Two More Mills Announce Closure

The operators of Pasadena Paper, located in Pasadena, Texas have decided to shut the mill down permanently. This mill produced 190,000 tons of coated paper per year. The mill was shut down initially due to excessive damage caused by Hurricane Rita in September.
As previously announced by Paper.com, Weyerhaeuser will close the Prince Albert Paper mil. This plant was located in Prince Albert, Sask, Canada and produced 280,000 tons of uncoated freesheet and 130,000 tons of Northern Bleached Softwood Kraft pulp.
Come to www.paper.com for all your paper demands.

Paper Market update

Estimated transaction prices on both uncoated offset and uncoated business papers (cutsize) rose $5/ton in November. This may be the result of energy-related surcharges and other raw material cost increases. October shipments were down approximately 1.4% from last year. Uncoated paper shipments are reported down 3.6% for the year versus last year through this time.
Coated paper prices appear to remain stable and, in fact, some free sheet grades may have witnessed a $5.00/ton increase in November. This market continues to be very competitive. Many machines producing coated papers have been closed, thus yielding an artificially tight market.

Pulp Market is Depressed

Buyers are reporting that benchmark northern bleached softwood kraft (NBSK) pulp prices delivered to the U.S. East and Midwest markets are stuck in the $510-$520/metric ton range. Reason: Weak pulp demand from paper mills in an oversupplied market.
NBSK pulp reached a two-year peak of $665 in February and has been sliding ever since. Even when the mills adjusted their effective list prices downward to $630-$640 in October, transaction tags have stayed lower. Paperloop.com is reporting, for example, that sales in the East, "which is often the most competitively pricing region on the domestic market," are reported levels hovering around $500/metric ton. Buyer surveys show Southern bleached softwood kraft (SBSK) spot prices stuck in a $500-$510 range since August. Producers are telling the trade press they are fully committed to implementing a price hike in regular contract business, but buyers deny that is happening.

Mohawk Paper changes Name

Mohawk Paper Mills is now called Mohawk Fine Papers, Inc. After Mohawk acquired the International Paper facilities, it is now the largest producer of premium printing, writing, and imaging papers in the USA. Popular grades Mohawk produces include Strathmore, Mohawk Superfine, Beckett, Britehue, Via, Mohawk ColorCopy, Inxwell, Navajo, and options. Mohawk is well know for its commitment to the environment, and has most recently transferred a portion of its energy demand to wind energy.
Paper.com has all the Mohawk grades, available and for immediate shipment

Badger Paper reviews Future

Badger Paper, located in Peshtigo, Wisconsin, continues to review its future. Management recently commissioned Sanabe & Associates, a New York Investment banking firm, to advise on strategic options.

Another Mill Closes

Cascades announced that it will cease the operations of its Cascades Fine Papers Group Inc., Thunder Bay Division (Ontario) plant which specializes in the manufacturing of coated papers. Approximately 375 employees will be effected.
The current economic situation within the pulp and paper industry, along with the recent sales price decrease in the fine papers sector and the unfavorable short and long term perspectives compel Cascades to close the plant. Moreover, the reduced demand and increased price of raw material and energy, combined with an increase of the Canadian dollar compared to the US dollar strongly affected the plant's economic performance.

Printing and Writing Paper Shipments Up in October

The AF&PA has reported that shipments of printing and writing paper grades rose 1.4% in October, as compared to the same month in 2004, to 2.33 million tons. Year to date shipments decreased by –1.4% as compared to last year. Coated freesheet shipments were up by 7.3% month over month and down –1.1 year to date. Coated mechanical shipments increased by 2.2% month over month and decreased –0.7% year to date. Uncoated freesheet shipments fell by –1.4% month over month and uncoated mechanical rose by 3.3%. Uncoated freesheet declined –3.6% year to date and uncoated mechanical was up 13.4% for the same period.

Domtar Announces Downtime

Domtar recently announced that it will take two weeks down time around the Christmas holidays. This will result in the elimination of 125,000 tons of uncoated free sheet. The only mill effected is the Baileyville, Maine facility.

Newsprint Market

Many of the major Newsprint producers (paper used for newspapers) agree that consumption in the USA will continue to decline. Inspite of this, the manufacturers announced price increases for November.

Defining Brightness and Whiteness in Paper

I am often asked about how paper brightness is determined and what the brightness value means. USDA Forest Service recently released an explanation.
To date, the industry used two methods - both yielding different results -
GE - measured the percent of total light reflectance.
ISO - defined the percentage of blue light reflected from the paper's surface.
FYI. The GE figure was always greater than the ISO value - sometimes even greater than 100%
Both measurements only provided a brightness value - with no attention to whiteness.
USDA has mandated the paper industry to use a uniform measurement - called CIE - this will be an international
agreement for all paper manufacturers. This scale measures whiteness versus the narrow color band of blue white and brightness.

Brightness may or may not add much value to the 'useful' properties of the paper but it is the most important selling feature. It is a bragging right every paper manufacturer want to have that the mill produce most bright paper.
Brightness is defined as the percentage reflectance of blue light only at a wavelength of 457 nm. Whiteness refers to the extent that paper diffusely reflects light of all wavelengths throughout the visible spectrum. Whiteness is an appearance term. Color is an aesthetic value. Color may appear different when viewed under a different light source. Brightness is arbitrarily defined, but carefully standardized, blue reflectance that is used throughout the pulp and paper industry for the control of mill processes and in certain types of research and development programs. Brightness is not whiteness. However, the brightness values of the pulps and pigments going into the paper provide an excellent measure of the maximum whiteness that can be achieved with proper tinting.
As outlined above brightness is measured with two different standards - TAPPI/GE and ISO. Though there is no direct correlation, ISO brightness of a sample is usually lower by 1-1.5 units over GE brightness. The standards are as per Tappi T 452.
Color is related to perception and therefore measured or specified in terms of color space. A commonly used system is the CIE L,a,b system. This is based on the idea of color opposites.
L - measure of luminance and varies from 100 for perfect white to 0 for perfect black.
a - redness to greenness.
b - yellowness to blueness.
Whiteness is the extent to which paper diffusely reflects light of all wavelengths throughout the visible spectrum i.e. the magnitude & uniformity of spectral reflectance measured as the percent light reflectance for the whole wavelength range. The procedural standards for the measurement of whiteness are explained in ISO 11475.
the measurement of whiteness are explained in ISO 11475.

RRDonnelly buys Spenser Press

RR Donnelley has completed the acquisition of Wells, ME-based Spencer Press, which specializes in catalogs and direct mail. Spencer Press ranked 75th on the 2004 PI 400 list with sales of $82 million.

USA Paper and Paperboard Production down in September

Total U.S. paper and paperboard production decreased 3.4% to 7.4 million tons in September compared to the same month last year, according to the American Forest & Paper Assn.

Valentine Paper Finds a buyer

Meriturn Partners has agreed to purchase the bankrupt Valentine Paper Company in Louisiana. Meriturn also owns the Dunn Paper mill; this mill manufactures specialty papers for packaging, label, food service and bags.

Georgia Pacific Sold

Koch Purchased the paper and lumber assets of Georgia Pacific for $13.2billion. This acquisition includes Dixie paper cups, cardboard boxes and lumber plants. The purchase comes after Koch, in May 2004, acquired two mills in Brunswick, Georgia, and New Augusta, Mississippi, from Georgia-Pacific for $610 million. The mills make fluff pulp used in diapers, baby wipes and sanitary products.
Koch Industries has concentrated on oil refining and pipelines, engineering businesses and ranching. It now has interests in chemicals, fertilizer and asphalt.

RFID more information ....

It is difficult to read a paper article or supply chain management document without mention of RFID (Radio Frequency Identification Device). This, indeed, is a dynamic technology and end users such as Wal-Mart and Department of Defense insist on all vendors using this technology. HOWEVER, current RFID quality is poor, chips are expensive - with limited payback, and failure rates are high. Critical challenges remain static electricity issues, damaged and non-functional antennas, expense, and no one common 'language' for all RFID transmission.
The theory is certainly sound - but successful execution is still years away.
Many label printers are finding a new market for their equipment by generating these tags within the label.

Newspaper Circulation continues to Decline

Newspaper circulation of Dailies fell 2.6% in the six-month period that ended in September. This was the largest six-month decline since 1991. The drop in Sunday circulation was 3.1%. Newspapers are finding that readers, especially younger readers, are increasingly turning to the Internet for news. Note, Daily newspapers reached their peak distribution in 1984 at 63.3 million people subscribed to 1688 newspapers. Today, 45.2 million people subscribe to 1457 newspapers.
Obviously, less newsprint - the uncoated groundwood sheet newspapers use - is down.
Of interest; 47 million people visited websites of newspapers.

Quebecor World Inc profit falls

Quebecor World Inc, North America's second largest printer, recently announced a decline of 38% for 3rd quarter profits.
The leading causes were higher energy cost and lower revenue for catalogue printing. The printer also sited continued concerns related to the downward trend in magazine advertising - and thus less magazine pages - less printed pages.

Another Paper Mill goes to Auction

The assets of the bankrupt Durango Georgia Paper Company (former Gilman Paper) in St Marys, GA will go to auction on December 6. This mill produced converting kraft and speciality packaging grades.

Super Calendar Paper Enjoys Good Demand

One of the most outstanding segments of the paper industry is the Super Calendar market. This grade is used for Publications, Free Standing Insert for advertisers, Sunday Magazines, Retail Fliers, Manuals, and now, Catalogues and Magazines. This grade fits somewhere in between an uncoated newsprint (used for newspapers) and a Groundwood containing coated sheet (used for weekly magazines and catalogues). The quality of the Super Calendar (referred to as S/C) has vastly improved and the price has remained a value alternative. There are now 33 mills (up from 4) that produce this grade; 16 in North America and 17 in Europe. Five new paper machines that will produce S/C have been announced. This is an 800,000 ton

PCG Capital Partners confirms investment in Lincoln Mill

PCG Capital Partners has confirmed a $35million investment in the Lincoln Pulp and Paper Mill in Maine. Management will also invest $1million. The money will be used to expand the tissue capacity, and refinance existing liabilities. The Lincoln mill produces specialty tissue, napkins, and high bulk reply card.

No Paperless Office ... yet

The paperless office is a myth. The fact remains that documents, forms, email, and memos move from paper to digital AND BACK TO PAPER AGAIN!. I would argue, that the world is now consuming more paper in the office environment, It has become extremely important to integrate paper into digital workflows in order to centralize record keeping, archive, and distribute for wide spread readership and presentation.
Paper.com has every paper, every color, every style for the office environment.

Wausau Paper Reports a Loss for Third Quarter

Wausau reported a net loss this past quarter of $9million compare to earning $8.1million for the third quarter 2004. Although the Tissue and Towel unit as well as the Specialty Division yielded positive sales, the printing and writing sector remained weak and the mill could not raise prices to cover increases in energy, chemicals, and transportation. Management sited success with its new grade introductions of OptiServ, Exact Ice, and Exact Digital.
Wausau reduced printing and writing capacity in Brianerd by 5000 tons and over 50,000 tons in Brokaw (Brokaw continues to take down time).
Paper.com has Wausau available, in stock, and ready for immediate shipment.

Southworth announces new Line

Southworth, a producer of cotton-fiber writing papers, has expanded its line to include use for making customized awards and certificates. The new portfolio of 25 grades including one that comes with a CD containing 50 design templates. Come to www.paper.com for all the Southworth grades.

Stora-Enso announces a restructure

Stora-Enso merged its North American operations into global product divisions. The North American coated magazine, uncoated magazine, and newsprint will now be Stora Enso Publication; Fine Paper will be Stora Enso Fine Paper; and Specialty Papers will be integrated into Stora Enso Packaging Boards.

Summary of Uncoated Wood Free Market

Overall summary of Uncoated Woodfree market includes
-Weyerhaeuser, Domtar, Boise all announced a $40/cwt ($800/ton) price increase.
-Grades includes copy paper, reply card, opaque, and forms bond
-Paper.com predicted this would not be successful - and to date - this increase has been pushed back twice
-Producers felt they could capture this increase because of
-Increased costs (chemicals, energy, benefits, freight)
-North American capacity closures - 6 paper machines; 640,000 tons; 4.1% of capacity last 12 months.
-Seasonal upturn in demand
-New higher brightness sheet now offered
-New Uncoated sheet offering
-International Paper was first to announce increasing brightness from 84 to 92 on offset and 88 to 94 on opaque.
-IP produces 3.5million tons of uncoated paper (entire North American capacity 13million tons)

Hurricane Katrina Hurts Paper Industry

We read about the aftermath of Hurricane Katrina, and all reports are very bad. Specific to the pulp and paper industry, the hurricane had many negative effects. Local infrastructure - transportation, electricity, communication, and floods - also affected many paper mills in the area. The chemical industry has many facilities that produce products for the paper industry are concentrated in the Gulf States. Most notable Hercules and Dupont have a large presence.
Mills that were shut down include Tembec, Koch Cellulose, Boise Cascade, Weyerhaeuser, Georgia-Pacific, and Parsons & Wittemore.
Also, a large percentage of pulp and paper that is imported into the USA enters the country through the gulf port. Brazil reported thousands of tons of pulp at the Port of Mobil were idle and possibly damaged.

Cascade to shut down a Paper Machine

Cascasdes Fine Paper will reduce its capacity in its Thunder Bay, ONT mill. This mill produces coated free sheet and specialty papers. The company will shut down #5PM and associated converting equipment. The paper machine was installed in 1920. Total capacity of the mill is 160,000tons per year.

NewPage Paper Mill announces slow down

NewPage Paper (the new owner of the MeadWestvaco paper plants) recently announced it will operate its
#7PM in Luke, MD to a reduced schedule. This machine produced 55,000 tons per year of coated paper.

USA Paper Industry needs Investment

Interesting article in this month's PaperAge Magazine confirming the lack of reinvestment in
USA Pulp and Paper mills. The article reveals our domestic industry not remaining in a competitive position
and that we have lost market share to off shore producers.
Investments continue for new paper machines in Europe and Asia while USA assets deteriorate.
Capital spending in USA peaked in 1990 at $20billion and, today, industry spends between $4 - 5billion.
Majority of domestic paper machines are over 20 years old and are no longer truly competitive in a global economy.
Many producers have reviewed entry into specialty grades, but soon learn their equipment does not fit the market's
demands.
Article concludes that 4 out of top 5 paper companies headquartered in USA and consolidation
continues.

AF&PA annual meeting

SAVE THE DATE
The American Forest and Paper Association has confirmed the meeting date for the annual
meeting held in New York City's Waldorf Astoria Hotel.
The dates are April 9 - 12, 2006

Boise Increases Penetration into Specialty Market

Boise Cascade confirmed it will invest $60million to convert existing paper equipment for the production of specialty grades. The company's Wallula, WA 250" #3 paper machine will produce pressure sensitive release liners and face stock. This new capacity will generate a total of 200,000 tons of specialty paper. The conversion is estimated to be complete at the end of 2006.

Market update on Uncoated Free Sheet

Most recent market intelligence outlines commodity market paper prices as
-Cutsize (copy paper) $800/ton
-Offset rolls $700/ton
This is for large wholesale business.
If an end user purchases very large volume, rumor outlines above pricing
less $40/ton on the spot market.

Paper Industry Week in Review

Paper Industry continues to witness pressure - many increased costs (energy, freight, chemicals, health benefits, etc) and cannibalize from electronic communication and low priced offshore competition - yields an industry that constantly attempts a much needed price increase - but market factors deny success.
-The containerboard producer’s announced a $30/to increase for this Fall. Competition remains fierce, and ability to confirm an increase is doubtful.
-Pulp producers continue to announce intent to increase NBSK and NBHK market pulp pricing. Inventory levels and sluggish paper demand make this increase difficult.
-Boise is the newest to attempt an uncoated free sheet (copy paper) price increase of $60. Earlier, we reported that International Paper, Weyerhaeuser, and Domtar announced, and failed, a price increase.
-High Brightness Newsprint announced an increase of $35-45/ton effective November1. This is for groundwood papers of 65 - 75+ brightness.
-Coated papers also announce a price increase odf $60/ton for November shipments. This one has a slight chance with catalogue printing in high gear - demand for coated papers strong 4th quarter.
Come to Paper.com for all your market information.

Xerox updates Line of Papers

Xerox has revised its copy paper line to increase both brightness and shade of its papers. They will combine the 4200 Multipurpose and the 4024 into one product. The new grade will offer 92 brightness and a bluer-white shade. The grade will be called Xerox Business 4200, available from 20lbs to 110lbs Index. The grades are available from Paper.com and are suitable for such as uses as reproducing documents, memos, reports, and presentations.

Xerox updates Line of Papers

Xerox has revised its copy paper line to increase both brightness and shade of its papers. They will combine the 4200 Multipurpose and the 4024 into one product. The new grade will offer 92 brightness and a bluer-white shade. The grade will be called Xerox Business 4200, available from 20lbs to 110lbs Index. The grades are available from Paper.com and are suitable for such as uses as reproducing documents, memos, reports, and presentations.

Georgia Pacific and Weyerhaeuser to Reduce Production

Georgia Pacific, the world's largest producer of tissue, will reduce its work force by 1000 employees. They are also reviewing the possibilities of closing down four tissue paper machines.
Weyerhaeuser plans to close a paper mill in Canada, this will effect 690 employees.

Weyerhaeuser to close paper mill

Recent reports outline Weyerhaeuser's decision to close the Port Albert, Sask, pulp and paper mill. Weyerhaeuser is reviewing all of its facilities in an effort to study which are performing and which are not.
www.paper.com carries many of the Weyerhaeuser brands.

Smart Papers Expands the Synergy Line

Smart Papers recently expanded the Synergy premium uncoated line to include many new offerings.
The line now includes
-19 colors (Five new)
-Five finishes, including very smooth, linen and laid
-A watermarked line
-Archival - acid free and lignin free
-Two new 100% post consumer recycled sheets
These grades, all available from www.paper.com can be used for many applications including
Annual Reports, Brochures, Newsletters, Stationery, Point of Purchase displays, Presentation Covers,
and so much more.

October Pulp Market Update

Most of the pulp producers announced a price increase of $10 to 20/ton for October.
NBSK grades increased $20/ton.
NBHK grades increased $10/ton
Although pulp inventory levels are down, paper demand, therefore, pulp demand
continues to be soft. This increase WILL be difficult for most buyers
to accept.

Paper Industry remains Weak

Almost every sector of the paper industry remains weak with reference to demand - despite a good economy. Major concerns remain high energy, chemical, and transportation rates, currency fluxuations, and 'off shore' capacity expansions. The industry continues to restructure - but major fundamental changes must occur for future success of the USA paper industry.
Paper.com has a huge array of papers for every requirement.

Paper Industry remains Weak

Almost every sector of the paper industry remains weak with reference to demand - despite a good economy. Major concerns remain high energy, chemical, and transportation rates, currency fluxuations, and 'off shore' capacity expansions. The industry continues to restructure - but major fundamental changes must occur for future success of the USA paper industry.
Paper.com has a huge array of papers for every requirement.

Yahoo report on the USA Paper Industry

The US pulp, paper, and paperboard mill industry consists of about 320 companies with total combined annual revenue over $70 billion. Major companies include Wausau-Mosinee Paper and units of integrated manufacturers International Paper, Georgia-Pacific, and Weyerhaeuser. An average mill has over 100 employees and annual revenue over $60 million. The industry is highly concentrated: the top 20 companies produce 70 percent of industry revenue.

COMPETITIVE LANDSCAPE

Demand depends on both consumer and business use of paper products. Because many costs are fixed, profitability depends on volume and production efficiency. Mills owned by large international paper companies have advantages by being vertically integrated. The parent corporation may own timber farms, sawmills, pulp and paper mills, conversion plants, and other end-product manufacturing facilities. Small mills can successfully compete regionally, in close proximity to timber operations and customers. Mills are highly automated and capital-intensive; average annual revenue per employee is about $450,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major product segments are wood pulp, paper, paperboard, and newsprint. Paper accounts for 60 percent of industry revenue, paperboard 30 percent, and newsprint 5 percent. Other products include non-wood pulp -- from cotton, straw, rag, flax, de-inked scrap paper and bagasse (the outer stalk of sugar cane) -- and byproducts such as turpentine and tall oil. Within the paper segment, major products are tissue papers, uncoated sheet papers, and coated printing papers. Paperboard is used mainly to make boxes and other containers.

Paper newsbits

A few recent happenings in the paper industry
-International Paper completed its sale of Carter Holt for $1.4billion
-International Paper will move its headquarters from Stamford, CT to Memphis, TN
-International Paper is restructuring and will divest every non-uncoated asset.
-MeadWestvaco announced a $200million cost cutting plan; reduction of employees and facilities
-NewPage has purchased all of MeadWestvaco's fine paper manufacturing sites
-Uncoated paper producers will be increasing the brightness on copy paper from 84 to 92+ brightness
-SAPPI shut down the 116,000 tpy coated free sheet paper machine in Muskegon, MI
-Abitibi to cut 600,000 tons of production of newsprint this year.
-Blue Heron Paper ratified a 4-year contract - 15% pay hike; mill produces 225,000tpy of newsprint
-Boise Cascade will spend $60million to increase its label capacity for pressure sensitive labels
-Transportation of paper products remains a challenge - higher fuel rates and disruption caused by hurricane

Market update for Newprint

A growing number of producers that manufacture Newsprint (paper that newspapers and inserts are printed on) are announcing a price increase for 30lbs standard newsprint. It would be effective for October shipments.

Quebecor Lands Yellow Book Printing

Quebecor World reached an$900million agreement with Yellow Pages USA to print all the directories through the year 2017. This amounts to over 1 trillion pages of paper. Most of the book is printed on recycled paper.
Paper.com has many recycled papers from 10% post consumer paper to 100% recycled paper.

Printers Finally Enjoying Profits

The recently published 2005/06 PIA/GATF study revealed profitability improved for most printers. Profit, as a percent of sales, was only 1.7% in 2004 compared to 2.5% in 2005. This is third consecutive year of improved profits. Statistics outline that the larger printers tended to be more profitable than the smaller printers.
Paper.com has many printers for all your personalized printing requirments.

Market update on Coated Free Sheet

Prices have fallen $20/ton in September. These grades are used for promotions, annual reports, and value added 'coffee table' magazines. This market has remained soft all year but is forecasted to improve for the holiday season. The domestic paper producers have been hurt by increased imports from Asia. Note, Asia has announced increasing capacity of this grade with new equipment - adding over 1million tons of new production!!

Market update Coated Groundwood

Prices fell on most coated groundwood grades. These are the papers used for magazines. The capacity is back on line with both the Canadian and Finnish strikes now over. The industry did implement an increase of $45/ton this summer, therefore, discounting is off this new, higher level.

Market update on Market Pulp

Prices on most types of pulp decreased by $5/ton, so far this month (September). Prices are now equivalent to the lows witnessed in November of 2004! The industry has announced a price increase for $20/ton on NBSK for October - but imported pulp is still readily available at a discount and, accordingly, a price increase may be difficult.

Update on Uncoated Paper Markets

Uncoated paper market declining price levels continued through September. 50 lbs offset and 20lbs copy paper fell. Price checks reveal offset fell $15/ton and cutsize copy paper fell $10/ton. Ironically, you may recall paper producers announced a price increase for September - certainly with increased costs - transportation and energy - the industry needs a price increase. However, demand remains weak.

First Half 2005 Paper Industry Review

Paper industry has been dynamic the past 24 months. 2004 ended and 2005 begun with a very strong paper market. As 2005 progressed, pricing decreased - in spite of rising raw material (fiber, energy, chemicals, transportation) and today, the uncoated market is beginning to once again announce price increases.
First half of this year-
-Uncoated free sheet pricing increased 10%
-But demand now down - electronic and high bright groundwood grade substitution
- Offset by equipment curtailment
-Coated magazine paper prices increased nearly 20%
-Finland and Canadian strikes curtailed supply
-Newsprint prices rose 10%
-Newsprint capacity decreased 1million tons (capacity now 13.4millin tons)
-Kraft Linerboard increased 15%
-Super calendar paper -insert paper used fore advertisements - increased 12%
Plus additional $40/ton increase announced in July
-Pulp prices jumped to $680/ton (highest level of NBSK since JAN2001 - $710/ton)

Uncoated Paper Prices Increase

The paper market continues in a state of confusion. After a period of price decreases - many of the major producers have announced price INCREASES. Leading the industry include Weyerhaeuser, Domtar and Boise (International Paper - the largest supplier of uncoated paper is conspicuously absent). The increase included both cut size (office copy and printer paper) and offset. The increase was announced for $40/ton effective with shipments September 19. Reasons for this increase were
-Capacity closure
-Seasonal upturn of demand
-Raising raw material cost pressure
-Reduced finished inventory
-Quality improvement (brightness now 92 vs. 84)

Lincoln Tissue Mill Expands

For the first time in many years, a domestic paper mill is expanding AND including a new paper machine in their plans
Lincoln Tissue, a specialty, value added lightweight tissue mill has committed $36million dollars toward a new paper machine, which will be supplied by Metso. This machine will produce 100 tons per day. The current mill contains 2 paper machines with an output of 50 tons per day. The owners purchased the mill from Eastern Fine Paper (out of bankruptcy) in May of 2004 for $23.7million. The new machine is forecasted to be operating by August 2006.

Update on International Paper Quality Improvements

News fromInternational Paper (IP) regarding their brightness change. Some of the highlights:
All uncoated ( 4,000,000 tons ) will be moving up in brightness
There will no longer be any 84 bright products available from IP
Tidal - 84 bright to 92
Fore - 88 bright to 96
Williamsburg - 84 to 92
Accent - 92 to 96
Converting grades such as envelopes - 84 to 92
Carolina, Colors, and Uncoated Bristol's will not change

The mill has apparently developed a new technology that enables them to reach a higher brightness at no increased cost, and have stated that they will be competitive with the existing 84 bright market. IP feels that with this change, their competition will do either one of the following:
Increase to 92 bright to avoid losing market share ( not good for most mills as they will significantly increase their cost )
Stay at the 84 bright level and fight it out on price ( not good for most mills as this further affects their profitability, or lack of )

We should begin to see this new product sometime in September. At this point, the mill has decided to stick with the same sku's. It's a good time to begin looking at your inventory levels of Williamsburg and Accent as in two months, these old shade products will be discontinued.

This is a significant move by IP, that will change the landscape of uncoated paper in North America.

Stats in for Strike in Finland

We recently learned that the 56 days of down time in Finland, as a direct result of the labor strike, was over
1.7million tons. The tonnage was almost exclusively printing and writing grades. The strike, which formally was settled on
July 1 effected UPM Kymenne, StoraEnso, and M-Real. Also effected was 430,000 of market pulp. Finland has become a major
supplier to the USA of printing and writing grades - 11% market share of USA coated groundwood; 13% of USA supercalendar (S/C); and 10% of directory papers.

FiberMark confirms Reorganization

On June 24, the Fibermark Paper Company confirmed its reorganization plan which contained a revised capital structure with lower debt levels and lower interest rates. The company also outlined closing two paper machines (Hughesville, NJ and Warren Glen NJ).

Quebecor World Looks to Sell Division

Quebecor World has recently placed its commerical printing division up for sale. This division has 12 plants. The printing company is under a lot of cost pressures.

Market Pulp

Late last week, pulp prices slipped $5/ton. Weyerhaeuser earlier this month announced decreasing its price for NBSK by $10/ton. Meanwhile, producers are in discussions with the buyers in Asia to increase pulp prices by $20/ton. Pulp prices last rose in February to list price of $680/mt - since than - prices have declined steadily. Lots of confusion!!

Kohlberg & Co. Still Buying Paper Companies

It was reported that Kohlberg & Co. - the investment fund that recently purchased International Paper Companys' industrial paper division, is now reviewing Cellu Tissue. Cellu Tissue has a capacity of 250,000tpa of tissue papers used in bathrooms and also Machine Glazed papers. The company has 6 mills.

Merrimac Paper Mill Closes

After 139 years, the Merrimac Paper mill and its converting operations in lawrence, Mass shut its doors. The mill sited high costs, environmental issues, lack of negotiating a labor agreement, and the inability to secure a new buyer as reasons it failed.
Hazen Paper will purchase many pieces of converting equipment.

Neenah Introduces New Grade

Neenah Paper recently introduced a new environmentally friendly grade of paper called Wise Choice. The sheet will be available in 70, 80 and 100 pound text weights. This sheet will feature a 100% recycled option and a 100% post consumer fiber option. Paper.com has the complete line of Neenah Papers and will soon market the Wise Choice Brand.

Fifteen Top Book Manufacturers

Paper.com has many Book Papers available on our site. The top 15 Book Manufacturers, by book sales revenue, was recently announced as follows-
1-Visant Corp $731MM
2-RRDonnelly $698.4MM
3-Quebecor World $695.4MM
4-Banta $289.4MM
5-Arvato Print USA / Bertelsmann $266.6MM
6-Courier Corp $177.2MM
7-Transcontinental Inc $144.2MM
8-Phoenix Color $128.0MM
9-Walworth Publishing $104.5MM
10-Hess Management $84.0MM
11-Maple-Vail Book $78.0MM
12-Webcrafters Inc $77.0MM
13-Edwards Brothers $70.2MM
14-Friesens Corp $57.0MM
15-Webcom $55.0MM

Paper Pricing Still Soft

Although Paper.com primarily markets value added papers to both businesses and consumers, we also have a wholesale business which silicates large volume end users of commodity papers. While the higher quality papers have witnessed insulated, and level pricing; the commodity sector has been under constant pressure. Even with strikes curtailing massive amounts of supply (Strike: coated paper mills in Finland and UPM/Kymmene's coated paper mill in Miramichi, Canada) AND all producers desperate to increase pricing AND consolidation as well as machine shutdowns AND a slight up tick in print buying - there still exists a softness in pricing. For uncoated free sheet - all the price increase announcements released earlier in the year have been rescinded. Coated Free Sheet and Groundwood remain sloppy and price forecasters outline limited support for price increases throughout balance of year.

UPM Announces new Production Strategy

UPM announced it will restructure its publication division to become more competitive. Many changes will be introduced in the uncoated magazine paper (SC Papers) group. Management sited a strategy outlining both closing and converting existing equipment as well as reviewing investment in new equipment. Most of these initiatives will take place in their european locations.

E-Commerce for Paper Products

E-Tailing is quickly becoming a household word. Last year, e-commerce sales hit $69.2billion - which represented less than 2% of all retail sales. This sales level equated to a 23.5% sales increase. Internet experts firmly believe this online channel will account for 7% of retail sales by 2010. Web based marketing has become an integral part of multichannel sales / marketing strategy and is an effective, efficient channel. Paper.com markets both to business and consumer end users and is one of very few e-commerce websites for the paper industry. The site has nearly 20,000 items from all the major paper producers representing all the primary end user's target categories. The site enjoys an average of 4000 visitors every day.
Some interesting milestones include - 1995-Amazon sold its first book online; 1996-Google was started; 1997-EBay sold its millionth item; 1999 the URL-busuness.com was sold for $7.5million - just the name!!!;

Top 10 Paper Mills

Top 10 Global Paper Producers by total sales
1-International Paper (USA) $25MM
2-Georgia-Pacific (USA) $23.2MM
3-Weyerhaeuser (USA) $16.7MM
4-Kimberly-Clark (USA) $13.5MM
5-Stora Enso (Finland) $12MM
6-UPM (Finland) $11.2MM
7-SCA (Sweden) $10.5MM
8-Oji Paper (Japan) $10.4MM
9-Nippon Unipac (Japan) $10MM
10-Procter & Gamble (USA) $9.9MM

Top 10 USA Paper Producers by total sales
1-International Paper
2-Georgia-Pacafic
3-Weyerhaeser
4-Kimberly-Clark
5-Procter &Gamble
6-Boise Cascade
7-Smurfit-Stone
8-MeadWestvaco
9-Temple-Inland
10-Sonoco

Paper.com has grades from all these major paper producers, as well as hundreds of smaller manufacturers.

Uncoated Offset Prices - Decrease .... again

Prices for the commodity grades of uncoated freesheet offset have continued their slid - through August. The paper used for xerographic and desktop printers (cutsize) recently declined $20/ton and 50lbs Offset (printing paper) fell $10/ton. Many domestic mills are reducing supply (production) in an attempt to curtail pricing reductions. We understand that prices for uncoated papers is also sloppy in both Europe and Asia.
Paper.com has a complete line of uncoated products.

Uncoated Groundwood Market is Still Strong

As the Finnish strike continues, Uncoated Groundwood (paper used for inserts into Newspapers) continues to pick up demand. Demand growth for 2004 was 6% - mainly for the Super Calendar Papers. Publications are substituting Uncoated Groundwood, with brighter, enhanced surface, for difficult to find Coated Papers (because of Finnish and Canadian strikes). Growth is expected to continue throughout 2005 - estimated to increase by 8%.

New Page Paper to review selling Carbonless Business

New Page Corporation, the acquirer of the MeadWestvaco paper group, is now evaluating steps to divest of the
Carbonless Business. The Chillicothe, Ohio plant is concerned that the future of Carbonless demand is shrinking. The company is also reviewing the sale of other Ohio based operations such as Chilpac and Fremont facilities.
Many items of NewPage - MeadWestvaco's carbonless are available at Paper.com, as is the complete Appleton Line, including Superior, Tag, Premium, Xeroform, and Self Contained. The site also carries an value alternative called Imation.

Consolidation in the Paper Market

Many continue to predict that the top 40 paper producers will consolidate, divest, or shut down sites. International Paper Company, the world's largest producer, recently announced it will spin off divisions producing grades such as - Coated Papers, Super Calendared Papers, Beverage Packaging, Kraft Papers, Chemicals, and over 6.8 million acres of timber, as well as its Wood Products and Carter Holt Harvey businesses. This, in total, accounts for 30% of IP's 2004 sales and 40% of their operating profits. Simply put, International Paper will only be producing uncoated papers in the future. This trend follows Boise spinning off their paper group to Office Max, MeadWestvaco paper manufacturing to New Page, and Georgia Pacific to Domtar.
More announcements will be made.
Paper.com markets grades from all current International Paper mills, as well as many grades from Domtar and MeadWestvaco.

More News on Pulp Pricing & Demand

Analysts and trade publication are reporting that northern bleached softwood kraft (NBSK) pulp prices have been unchanged for months at $630/metric ton. Buyers have a different view—saying that spot prices have been sliding since March and sales were as low as $510 in July.
Pulp purchasing has been weak since papermaking has been slow all summer season—and some market participants continue to note smallish transactions for the raw material. Analyst Stephen Atkinson at BMO Nesbitt Burns says "the paper and forest products industry has had to contend with exceptionally weak demand for softwood pulp, coated and uncoated free sheet papers, newsprint and packaging products." CIBC World Market analysts expect the next pricing direction will be up—a 2.5% rise in 2006 average annual prices. But, that’s not the view of analysts at Smith Barney who are looking for a 6% decrease in 2006 list prices. But, for now, tags may bounce upward a bit—since demand from non-integrated papermakers often picks up ahead of the catalog season and integrated mills may try to build inventories before regularly scheduled autumn maintenance downtime.

Adapack Buys Specialty Paper Mill in Belgium

Adapack has completed the acquisition of the one-side coated paper business of Gruppo Cordenons, located in Malmedy, Belgium.

The deal includes a paper machine dedicated to one-side coated products used in the beverage industry. The mill has been named Adapack Intermills.

The acquisition increases Adpack group's total production capacity by 45,000 tpy.

In Sept. 2004, Adpack acquired Papeteries du Souche, another one-side coated paper producer, from International Paper.

Adapack said that it plans to become one of the world leaders in the field of one side coated label papers for the beverage industry.

Paper.com markets the papers from Gruppo Cordenons.

SAPPI Mill Announces Paper Machine Shut Down

SAPPI Fine Paper of North America announced it will shut down #4 paper machine at the Muskegon, Michigan Mill. Management sited the reason was high manufacturing cost. The company also announced the closing of its pulp production at the site. The Paper Machine manufactured heavy weight coated papers. Paper.com markets many of SAPPI's products.

Economy Strengthens and so should Paper Demand

Commerce Department recently released a report outlining the USA economy. The general trend was positive and a forecast for continued economic growth. Expansion in the second quarter grew at 3.4%, imports reversed, consumer spending rose, corporate investment and housing starts increased, inventories declined, and industrial production advanced. Although oil prices and health costs continued to rise - so did wages and salaries. Inflation was reported at 3%. The report stated that the USA was growing faster than the rest of the world. Generally, if the economy expands - paper demand increases ... let's hope this is true.

Recycled Paper Facts

Most domestic paper producers use deinked (recycled) fiber because it is environmentally a sound practice AND because it is a more economical raw material than a virgin fiber. There is a new concern for both availability and quality of recycled pulp. Many offices are shredding paper waste and therefore making it difficult to sort office paper. Undesirables such as newsprint, labels / stickers, unbleached and packaging paper are difficult to separate. Also, many new technologies for Ink Jet and Laser toner as well as the new Digital Printers and ink have made it difficult to remove the ink from the paper. Paper.com offers many recycled papers.

International Paper will Improve Quality of Paper

International Paper will improve quality of all of its uncoated papers with new propriety technology to enhance whiteness and brightness. The brightness will increase from and average of 84GE to 92GE. As reported International Paper has chosen to divest of all other divisions and focus of uncoated Printing and Writing Papers. Paper.com has the complete line of International Papers.

Freight Rates Continue to Increase

Freight rates for all modes of transportation continue to increase. Most site the increase in fuel to be the leading factor.
-Average truck rates have increased nearly 5% this year
-Forecast is 4% increase for 2006
-Year to date increases for AirFreight is 5.9%
-Ocean Freight rates continue to advance with May to May increase of 3.2%
-Rail rates are forecasted to jump a shocking 10.6% for 2005 and 9% in 2006.
Paper.com continues to work with our freight companies to maintain economic shipping rates.

International Paper to Spend Money on Mill

International Paper will spend more than $125million to modernize its Eastover, South Carolina Paper Mill. Most of the capital will be allocated to its #1PM. This paper machine produces envelope, office paper, printing and writing grades. The project will enhance the quality of the papers produced on this machine. Eastover is one of nine uncoated mills that International Paper owns.

Mohawk Renews Agreement to buy 'Wind Power"

Mohawk Paper has recently renewed its agreement to purchase power from wind generated sources. The mill is now the second largest consumer of wind power for manufacturing. Mohawk will use 45million kilowatts of pollution free power. Mohawk also has an environmentally friendly grade line. All these grades are available at Paper.com.

Newpaper Producers not Enjoying Price Increase

Newsprint (paper used to print newspapers) has only enjoyed a $5.00/ton price increase so far this year, inspite of an announced $35/ton announcement in March. Prices for large publishers remained at $565/MT. The small printers may be paying a larger portion of the increase.
Mills such as Abitibi and Bowater have announced over 1million tons of downtime and Canfor and Tembec are considering downtime. The mill introduce down time as a means to control supply and thus pricing. Total production downtime in North America would account for 12% of capacity.

International Paper Reports 2Q downtime

International Paper announced it took 275,000 tons of down time in the second quarter. This was a result of
poor market demand. Of the 275,000 tons - 135,000 was uncoated printing and writing capacity. Meanwhile,
MeadWestvaco started up the Brainerd paper facility.

Paper.com has more Masterpiece Studio items

Paper.com has recently added numerous items to complete the Masterpiece Studio offerings. This line competes very economically with Geographics and Sonburn for designer stationery. Visit Paper.com for all your designer stationery and paper demands.

Lincoln Paper to Expand

Lincoln Paper and Tissue is considering a $37million plan to double its Maine paper capacity. If the project is approved, the mill will shift focus from production of fine paper to tissue. Mill currently produces 200 tons per day.

Mohawk Launches New Digital Grade

Mohawk Paper Mills introduced Superfine i-tone, a new uncoated paper designed for HP Indigo Printers. This is a very clean, dust free sheet suitable for both dry toner and ElectroInk.

Pulp Market Fears new Capacity

Aracruz Cellulose is beginning to ramp up its newest facility in Veracel, Brazil. They will be the world's largest hardwood kraft pulp producer for market sales with an annual capacity of 2.6million tons. Aracruz recent expansions have doubled the firms production levels. Recent projects include 900,000mt/Veracel,Brazil; 250,000mt/Barro do Riacho, Brazil; 856,000mt/Itata, Chile. All of these plants produce high quality eucalyptus fiber.

Uncoated Offset Prices

Recent July 2005 reports outline demand for Uncoated Free Sheet paper 50 lbs (25x38/500) offset rolls has declined. This is typical over the summer months. Furthermore, the price for this grade has declined from an average transaction of $730/ton in April to a current (7/05) price of $700/ton ($35/cwt).

Market Pulp Pricing Depressed

Industry experts believe pulp prices are 20% too high. North America demand has decreased and suppliers continue to produce pulp; creating inventory. The benchmark grade NBSK (Northern Bleached Softwood Kraft) list price has declined from high of $680/MT (4/05) to $650 (5/05) to $630/mt today (7/05). Current spot Market pulp pricing ranges from average of $570/mt. to a low of $500/mt.

Valentine Paper Files Chapter 11

Valentine Paper Company in Lockport, LA filed for Chapter 11 bankruptcy protection. This is a nonintegrated (does not produce pulp on site) fine paper producer. The primary grade manufactured was uncoated white freesheet.

International Paper Concludes sale of Division

International Paper concluded the sale of its industrial papers division to Kohlberg & Co. for $180million. The name of the new company will be called Thilmany LLC. The sale included packaging grades and pressure sensitive papers produced at 3 Wisconsin mills. Total production is 300,000 tons per year.

Publication Papers Might be Tight in Supply

North American buyers of coated and uncoated printing mechanical paper grades (Magazine and Catalogue) were delighted to learn that paper production restarted in Finland, but both buyers and sellers continue to evaluate the results from the country's 56 days of downtime. The summer months usually generate greatest demand for catalogue paper in preparation for Fall mailings.

Pulp Pricing

Domestic prices appear largely stable in July. Prices continue to
edge lower in Asia, the world's leading spot market. However, after
months of erosion, we wonder whether we are close to the bottom.
Anemic demand is being partially offset by supply coming out of the
system. Arauco's big new Valdivia mill is out indefinitely, and
Domtar has shuttered its Quebec mill.

Kraft Paper still trying for Price Increase

North American kraft paper producers still are trying to implement a $50/ton price increase first proposed in April but delayed by weak springtime market conditions.

Pulp Mill Closes due to Cost Pressures

Wausau Paper in Brokaw, Wisconsin recently announced it will no longer manufacture pulp for internal consumption. Management sited raising costs AND introduction of additional low cost fiber producers in areas such as Latin American. FYI. Wausau Paper is already one on the largest single company purchasers of market pulp.
My prediction is this is the first of many announcements and that many smaller intergraded mills will be shuttering equipment and purchasing fiber on the open market.

FiberMark Announces Reorganization

FiberMark recently submitted a reorganization plan to its major creditors and bondholders. Among the details in the proposal included closing the Hughesville, NJ facility and shutting down 1 of 2 paper machines in Warren, NJ. FiberMark produces paper for the office, school, packaging and publishing markets.

Crane's - Papermaking at Crane with Cotton

Crane's - Papermaking at Crane:

"Papermaking at Crane & Co., Inc.

Making 100% Cotton Paper Since 1801

In some ways, papermaking at Crane has not changed greatly since 1801, when sheets were formed by hand. We still feel it is a highly skilled craft where great care must be taken to select the best raw materials and transform them into elegant and strong papers. Modern machinery and technology now play a significant role in crafting that final product, but it is the care and skill of the papermaker that really matters. Let's take a tour of a Crane papermaking facility.

First of all, Crane's make their paper from cotton. They don't cut down trees, and the cotton for our paper doesn't come directly from the field either. Crane uses the small scraps left over from the manufacture of cotton garments, such as jeans and t-shirts. These recovered scraps, or rags, as we call them, would otherwise be sent to landfills. So, not only are trees spared when you buy Crane paper, but you are helping with another growing environmental concern: overburdened landfills. We also use something called linters, the tiny fibers adhering to the cotton seed, which used to be thrown away by cotton seed oil producers. Nothing is wasted because the fibers from cotton are such an excellent raw material for paper.

To prepare the cotton for papermaking, it is first mixed with large amounts of water and sent to a piece of equipment called the beater. A beater is like a giant blender. (Crane's range up to 5,000 gallons.) In the beater, the cotton fibers are frayed between rotating steel blades and a lava bed plate, hence the term beaten to a pulp. Don't try this at home with old t-shirts and your food processor! The care taken with this step makes a huge difference in the quality of the paper.

After being processed in the beater, the cotton fibers are suspended in a solution of about 99% water and 1% fiber that we call stock. On the paper machine, this mixture is sprayed onto a wide belt of wire mesh called the fourdrinier, running at several hundred feet per minute. Much of the water is removed by gravity and suction and then reused in the papermaking process.

While the fibers are still very wet, a cylinder called a dandy roll, covered with a wire pattern, subtly rearranges the fibers to make the watermark. Barely able to support itself yet, the paper is picked up by a continuous felt cloth and passed through rolls that squeeze out more of the water, like a ringer on an old-fashioned washing machine. The paper then moves through a series of steam-heated cylinders where it dries completely.

In order to effectively take ink, either from a printing press, laser printer or a pen, a special coating must be applied to the paper called sizing. The paper must be dried once again by another series of heated cylinders before it is collected on a large roll at the end of the paper machine.

From start to finish the paper travels approximately a quarter of a mile through the machine. The rolls are either shipped directly to the customer or cut into large sheets. Once these sheets pass our rigorous inspection, they can be sent directly to paper merchants or converted into stationery.

At Crane's Stationery Factory, envelopes are cut, lined and folded. Crane's is are the only paper company that converts its own envelopes. Sheets are trimmed and, perhaps, bordered with colored paint or gilded in silver or gold leaf by hand. Some sheets are sent to Crane's engraving plant where they are skillfully transformed into elegant thank-you cards, invitations, or holiday greeting cards. Back at the Stationery Factory, finished products are tied with ribbons, assembled in boxes and packaged for shipment to fine stationers across the country.

Teaching About Paper and Recycling

TAPPI -- the association for the pulp, paper, and converting industry offers on this site brochures such as:

Are We Running Out of Trees?
How Are Trees Grown for Paper?
Why Do Some Paper Mills Have an Odor?
How is Paper Recycled?
What’s in a Tree?
How Much Paper can be Made from a Tree?
Why Recycle?
How Are Corrugated Boxes Made?

And, they offer (sell for only one dollar) posters on recycling paper that are perfect for the classroom, teachers materials, CD-ROMS and educational videos on:

Paper: The Video
This 12-minute video takes a light-hearted, fun-filled look at the ways paper has influenced society, past and present. A valuable discussion tool for students and teachers, the video spotlights the critical role paper plays in our everyday lives.

Modern Papermaking
Four-minute overview of the paper manufacturing process. Great for classroom visits and tour groups. All ages.

Recycling: Lost and Found
Four-minute overview of the industrial paper recycling process. Great for classroom visits and tour groups. All ages.

The Paper Trail - The History of Paper
Four-minute overview of the history of paper. Great for classroom visits and tour groups. All ages.

Making Paper

Making Paper:

Typically, trees used for papermaking are specifically grown and harvested like a crop for that purpose. To meet tomorrow's demand, forest products companies and private landowners (in Wisconsin) plant millions of new seedlings every year.

To begin the process, logs are passed through a debarker, where the bark is removed, and through chippers, where spinning blades cut the wood into 1" pieces. Those wood chips are then pressure-cooked with a mixture of water and chemicals in a digester.

Used paper is another important source of paper fiber. Thanks to curbside recycling programs in many communities, we recover 40% of all paper used in America for recycling and reuse. The paper is shredded and mixed with water.

The pulp is washed, refined, cleaned and sometimes bleached, then turned to slush in the beater. Color dyes, coatings and other additives are mixed in, and the pulp slush is pumped onto a moving wire screen.

Computerized sensors and state-of-the-art control equipment monitor each stage of the process.
As the pulp travels down the screen, water is drained away and recycled.

The resulting crude paper sheet, or web, is squeezed between large rollers to remove most of the remaining water and ensure smoothness and uniform thickness. The semidry web is then run through heated dryer rollers to remove the remaining water.

Waste water is carefully cleaned and purified before its release or reuse. Fiber particles and chemicals are filtered out and burned to provide additional power for the mill.

Papermakers carefully test for such things as uniformity of color and surface, water resistance, and ink holding ability.

The finished paper is then wound into large rolls, which can be 30 feet wide and weigh close to 25 tons. A slitter cuts the paper into smaller, more manageable rolls, and the paper is ready for use.

Papermaking is one of the most capital intensive industries in the nation, investing over $100,000 in equipment for each employee. The largest papermaking machines are over 32 feet wide, 550 feet long and can produce over 1,000 miles of paper a day."

Freight Rates all Increasing

One of the important cost components to paper manufacture includes freight rates. Mills which produce the
paper grades are typically located in remote locations. Therefore, shipments for both in bound (for raw materials) and out bound (product to end users) tend to be many miles.
Trucking rates, Air transporation, Water, and Rail have all experienced price increases. Many blame the high cost
of fuel (approaching $60/barrel). This continues to place cost pressures on the paper producers.

WIND MILLS POWER WRITING SYSTEM

Mohawk Paper Mills announced that the entire Strathmore Writing System,
including Strathmore Writing, the #1 selling 25% cotton fiber paper in
the U.S., is now manufactured with wind power.

Mohawk purchased an additional 35 million kWh of wind power on June 1
for The Strathmore Writing System, manufactured at the non-polluting
Beckett Mill in Hamilton, Ohio. This commitment allows Mohawk, the only
paper mills in the U.S. using wind energy to manufacture paper, to join
the highest level EPA Green Power Partnership Leadership Club. 

For more information on The Strathmore Writing System and Mohawk's use
of wind power, please visit http://www.mohawkpaper.com or call 1-800
THE MILL.

State of the Uncoated Paper Market

Many industry experts forecasted prices to drop in June.... and they are! Cut-size paper (business papers used in copiers) slipped $20/ton, and offset rolls (for publications) declined $10/ton -this is an addition to the $20/ton
Decline in May. Even value added grades are
getting squeezed with 50lb opaque selling $50/ton less than April
levels. Some mills, like International Paper are doing their part to try to support the market by
closing 3 machines in recent months with 430,000 tpy of capacity. IP
is also taking 120,000 tons of market downtime over the next 3 months.
In global markets, the uncoated prices in both Europe and Latin America are 'all over', but
labor issues in Finland could take some of the pressure off of prices (curtailed supply).

Pulp Prices down .... again

North American prices for two grades of softwood kraft pulp declined this month on relatively weak demand for fine paper and competition among producers to move extra tonnage. Three grades of hardwood kraft saw mixed pricing, and levels did not fall as much as buyers had expected.

Paper Mills Finally Releasing Capital Dollars

A recent survey outlined top 20 North American mills will increase capital spending by 23%, or to $6billion, for 2005. It was pointed out that this is most likely NOT a return to ‘free spending’ but rather required spending. Most of the funds continue to be allocated to environmental mandates, cost savings projects and grade conversions. Many mills
Continue to review closing inefficient production and reducing staff.

Paper Market Information

Paper Grades
-Printing and Writing Papers
-Capacity peaked in 2000 to 27.6million tons
-by 2003 capacity was 25.5million tons
-Forecast for no new capacity through 2007
-Freesheet grades experienced largest curtailment (down 10% 2000 to 2004)
-Uncoated Freesheet capacity now at 13.7million tons
-Many industry experts predict decline in paper prices throughout 2005

Finnish Paperworkers go back to work

The Finnish paper industry finalized an agreement for salaries of the striking Finnish Pulp and Paper workers. The salaries will increase by a total of more than 6% over 3 years. Salaries for working during Christmas and midsummer will be three times the normal rate and the annual work time will be shortened by 11 hours.

Badger Paper to Curtail Capacity

Badger Paper Company of Peshtigo, Wisconsin, announced it will indefinitely shut down its uncoated freesheet Fourdrinier paper machine. The paper machine produced business papers and school paper.

Finland Paper Mills continue to Strike

The Finnish Forest Industry Federation, which represents the pulp and paper industry, that the current lockout will continue through June. Finland is a large supplier of pulp and paper to the world. This has the potential of creating a shortage,
although demand begins to slow during the summer months.

Pulp Prices Finally Decreasing

Several producers have reduced market pulp pricing for the second month in a row. Many pulp suppliers
lowered NBSK fiber by an additional $20/ton. List price for NBSK is now at $630/mt. Note: Softwood
fiber has been under more pressure than hardwood - therefore- the cost difference is less. Big new fear-
what will happen during the low summer months????

Transportion Costs Continue to Increase

An important cost for paper manufacturers is freight. All major modes of transportation
reported 1Q05 increases. Trucking is up 5.5%; air increased by 2.1%; Water reported no change; and
rail is predicted to rise 6.3% for the year 2005.

Kohlberg & Co. Brings Back Thilmany Brand

Kohlberg & Co., which recently acquired the industrial papers business from International Paper (IP), has brought back a familiar name to the paper industry.

The old IP business will be called Thilmany LLC. The headquarters are based in Kaukauna, WI, the town where Oscar Thilmany founded the original Thilmany Pulp & Paper company in 1883. John Zuleger is the president and CEO, with Jack Rohrback serving as the chairman of the board of managers.

Enviromental Calculator

Mohawk Paper recently introduced a link that allows one to calculate environmental factors for
your next printing job. The link http://www.mohawkpaper.com/index_content.htm go to
'Interactive Environmental Savings Calculator' this link outlines trees saved, potential emissions,
electricity conserved, solid waste not generated, and water used / saved.

USA Paper Demand Today

USA coated paper shipments continue to be held down because of Coated Free Sheet (Coffee table magazines) imports. Uncoated Free Sheet (office copy paper and trade book) demand continue to decline - 15.8million tons in 1999 to 14,2 million tons in 2004. Major reasons sited include Internet, electronic payments and communication. The shinning segments remain niche specialty papers(Medical, Electrical ) and uncoated mechanical papers (directories and inserts) and this is expected to continue.

Higher Postage Cost may Stagnate USA Paper Demand

Many beleive that USA paper demand will decelerate or be stagnate in 2006 if the USPS increases postage / mailing costs. North American paper demand increased 15% in 2003 -04. Today, end user markets are beginning to weaken. Recently, ad pages increased and peaked in 2004 - but are still below the peak of 2000. Catalogue mailings increased 8% last year - but with increased mailing costs (expected in January 2006) all expect a decline in demand to occur. One issue that might assist producer price levels - is a stike at the Miramichi mill (approx 8% of North America supply).

International Paper Closes 3rd Paper machine

International Paper will shut down an additional paper machine in the
Bastrop, LA paper mill. This machine produced uncoated freesheet papers
used for office and books.
In March, we reported that International Paper planned on indefinitely idling
two uncoated freesheet paper machines in the Florida and Maine locations.

Smart Papers Introduces New Digital Papers

Smart papers has recently introduced a full line of Digital Papers for the HP Indigo presses. The line will be called
IN-Fusion and it is an untreated premium paper (non-sapphire). The grade is available in
cast coat, matte, as well as both uncoated text and cover. These grades are available in 18X12".
Additional introductions included a Satin Finished sheet called Kromekote Inkjet Studio Picture and
Knightkote Matte Laser.
Smart also introduced Smart Brights (previously called Fraser Brights). This is available in
19 bright colors to compete with Wausau Astrobright.

Paperloop.com - News�Analysis�Prices�Forecasts�Data�Events

Boise Cascade cancels IPO citing adverse market conditions.

It is interesting to note that Boise Cascade recently spent $25 million to build an e-commerce system so that their customers could order over the Internet. And, they spent 18 months aggressively migrating their customers to use it. It seems to have paid off, with over 85% of their customers purchasing from Boise online. In a seemingly parallel strategy Boise bought Office Max. Parallel because Boise recognizes the value of getting close to the customer instead of close to the paper machine.

Time will tell when they go public if this strategy paid off.

Mohawk Number One

Mohawk is now number one in text and cover in the U.S.A. having purchased the fine paper division of International Paper earlier this month.

Riverside Paper to shut Appleton, Wis., specialty paper mill

Riverside Paper plans to become a non-integrated paper converter by closing its Appleton, Wis., specialty paper mill which dates back 110 years, cutting 100 jobs, according to local press reports. Paper grades that will be effected include: Latex saturation, Wet strength, Acid free, Groundwood specialties, Sulphite construction, Recycled specialties, File folder (manila/color), Index, Colored text/cover/bond, Tape base, Posterboard, Drawing grades, Special blacks, Deep dye colors, and Cotton content.

Experts see Market Pulp Demand Slowing Down

The pulp manufacturers witnessed excellent growth in demand for 2004 of 5.3%.
Industry experts believe annual growth will be less than 3% for this year, as well as annually
through 2007.

Finland Paper Mill on Strike

The Stora Enso workers continue their wildcat strike and the result is no production from their Finnish mills.
This will effect supply for publication papers in the USA.

It's Official MeadWestvaco Paper Unit Sold

MeadWestvaco completed its sale of the paper business and associated assets for $2.3billion
to NewPage Corporation. NewPage Corp. is controlled by Cerberus Capital Management - a New York
based fund. NewPage will consist of printing paper mills, including Chillicothe, Ohio; Escanaba, Michigan;
Luke, Maryland; Rumford, Maine and Wickliffe, Kentucky.

Freight Rates Continue to Increase

LOGISTICS MAGAZINE just forecasted that shipping costs would continue to increase throughout most of 2005. Most shippers currently are paying truckload fuel surcharges exceeding 10% of the base rate. Air, Ocean, and Rail rates were stable for first quarter of 2005 but forecasted to continue the rise witnessed in 2004. The most aggressive increases are believed to come from the LTL (Less than full truck load) carriers. During 2004, this segment charged increases over 9% for shipments under 500 pounds. Truck drivers are at the mercy of fuel prices!

Stora-Enso Reports on Paper market

Stora - Enso, the world's largest papermaker, reported that demand for most paper grades is good in both Europe and USA. Higher pricing has helped all manufactures profitability. The group also stated that price increases WILL continue
because of increased cost pressures. Stora Enso felt the coated paper market would witness more aggressive price
increases than the uncoated sector.

2004 Paper Capacity Information

The American Forest and Paper Association is beginning to release data for 2004
-Total US Paper and Paperboard capacity was 100million tons
-Forecast over next 3 years (2005-07) is for slight increase
-0.3% per year
-Compare to 2.2% / year during the 1990's
-Number of permanent mill shut downs
-Fell to 13 in 2002
-12 in 2003
-7 in 2004
-Machine closures
-40 in 2002
-39 in 2003
-21 in 2004
Concerns continue to be
-Competition from China and Europe
-Plastics
-Inefficient equipment - limited CAPEX
-Higher raw material costs - fiber, energy, freight

MeadWestvaco and International Paper Show Profit

Both International Paper (North America's largest paper manufacture) and MeadWestvaco(one of the largest coated magazine paper manufacture) reported improved profits for first quarter. International Paper's profit nearly doubled, assisted by a 13% increase in the price of uncoated book, envelope, and copy paper prices. MeadWestvaco sited their improvement as a result of increased pricing for magazine papers. Both mills announced that prices will continue to increase to offset the cost pressures from raw materials such as fiber, power, chemicals, and freight.

Applications for Synthetic Paper...

Yupo synthetic paper has been around for a long time in the commercial world and here is the most useful page in their site describing which synthetic paper is appropriate for which application:
Applications for Yupo synthetic paper



But, did you know that this polypropylene paper is PERFECT for watercolors?

Yes, its true. Art paper experts at paper powerhouse Legion Paper in New York confirm that you can paint watercolors on Yupo synthetic papers and that the pads are selling briskly to the art market. While traditional watercolor papers soak up the inks these synthetic papers are super smooth to the touch and do not look like watercolor papers available from traditional watercolor paper manufactueres such as (Rising, Strathmore, Aquarelle, Lanaquarelle...)

Who Sells the Most Paper in the USA...

This Just just in:

Headline: OP superstores grab majority of paper sales
Source: OPI
Date: 07 Apr 05

7 April 2005 – Newton (MA): The vast majority of small paper buyers buy their paper from the top three OP superstores - Staples, Office Depot and OfficeMax - a new survey has revealed.

In a study conducted by Lyra Research among paper buyers from businesses of up to 99 employees, three-quarters of respondents were found to purchase their paper from the ‘big three’.

Staples is the most popular channel, said Lyra, followed by Depot and then ’Max. The next most popular source is the mass-market retail/warehouse club channel, it said, with 11 per cent of respondents reporting that they buy their paper from Wal-Mart, Sam’s Club or Costco.

Next on the list came Boise Office Solutions and Xpedx with 2 per cent; and Corporate Express with 1 per cent.

End of article.

Next, go to this article dating from 2001:

OPI Online: Special Publications

Even though this article dates from 2001 it is a fascinating look at the office products industry. This article is basically the "cliff notes" version of the industry conference in which United Stationers, Corporate Express and other important office products dealers talked about the changing landscape of selling office products.

Since 2001 the fundamentals have not changed but we've seen even greater consolidation in the distribution of office products and paper companies and fewer independent operators. No wonder Boise bought OfficeMax.

In many respects Paper.com is the anti-Staples. Paper.com exists is because it is impossible to buy more than a few dozen different kinds of paper at the typical office supply warehouse. Paper merchants are just not capable of selling in small quantities. So, Paper.com was created to respond to the need for a great variety of papers available in small quantities.

Biggest Producers of Uncoated Papers

The five largest manufactures of Uncoated Printing and Writing grades in the USA are
International Paper 25% of market or 4million tons
Weyerhaeuser 19.5% of Market or 3million tons
Domtar 14.1% of market or 2.2million tons
Boise Cascade 10% of market or 1.5million tons
Georgia Pacific 7% of market or 1.1million tons

Uncoated Paper Market Segments

Uncoated printing and writing market can be divided into three major segments
-Copy Paper (also, known as cut-size) approx 5.5million tons produced/year
-Printing and Converting Paper (Offset, Envelope, Forms, Tablet) approx. 6.1million tons produced/year
-Text, Cover, Carbonless, Tag (special finish, colors, heavy weight) approx 1.6million tons produced / year

NCR Carbonless is recommended by Hewlett Packard

NCR Paper brand Xero/Form II (carried by www.paper.com) is the first carbonless paper that HP recommends for use on their LaserJet printers. This cost effective sheet is stocked in many sizes and collations on the paper.com site. Hewlett Packard endorses this grade because it provides advanced toner adhesion for clearer imaging and contributes to overall productivity. HP and NCR also report fewer jams, misfeeds, and turnovers.

News On Manufacturers - recap

>Mohawk / International Paper
-Mohawk Paper Mill will purchase the Fine Papers Unit from International Paper.
-Sites include the Hamilton, Ohio paper mill, the Saybrook, Ohio converting facility, and the Westfield, Mass mill.
- Brands include Strathmore®, Brite Hue®, Via®, and Beckett® brands.
-The Fine Papers business produces approximately 65,000 tons per year.
-This will effectively double Mohawk’s capacity.
>SPIN-OFF GOES PUBLIC
-Neenah Paper Inc., completed spin-off from Kimberly-Clark
-Neenah Paper core grades include premium Writing, Text and Cover business.
-Also, Technical Paper, durable, saturated and coated base papers; and, a Canadian pulp business.
>Appleton / CTI
CTI Paper USA announced the acquisition of the Currency and Jazz grade lines and trademarks from Appleton.
>Fraser Papers / SMART Papers
SMART Papers LLC to acquire Fraser Papers’ paper operations in Park Falls, Wisconsin.
-The purchase agreement includes a 470,000 square foot converting, distribution and customer service facility in West Chicago, Ill
>MeadWestvaco Sells Paper Unit
-MeadWestvaco Corp. has agreed to sell its paper business for $2.3billion.
Division sold to Cerberus Capital Management LP,
>International Paper continues to sell assets
International Paper will sell its Industrial Papers Business to Kohlberg & Company, LLC for $180MM.
-The sale includes two paper mills in Wisconsin, the Akrosil converting business and the Thilmany Packaging business.
-The business produces products like release liner for self-adhesive labels, paper for
microwave popcorn bags, refrigerated dough & potato chip canisters and other products.
>FiberMark still in Bankruptcy Status
FiberMark, the manufacture of filter, school/office, and wallpaper grades withdrew its bankruptcy-restructuring plan after failing to gain support of any of the creditors.
>Stora delays rebuild of No. 64 machine in Wisconsin
- Postponed the rebuild of the No. 64 machine in Whiting, WI.,
- Company has begun the rebuild of its No. 26 machine at Biron, WI.

Market Pulp

Northern Bleached Softwood Kraft (NBSK) list price is still holding steady at $680/mton - following February's increase of $30/mton. Also, March hikes on hardwood grades have gone in successfully, with northern hardwood pulp raising by $20/mton. There are further hikes of $20-30/mton on hardwood grades proposed for late April – early May, but NBSK prices are expected to remain flat. February shipments fell 0.8%YTD, but inventory days of supply fell from 34 to 32, as the market remains tight. Higher woodfree paper production volumes, switches from hardwood to softwood production, chip shortages, closures of some pulp mills have increased tightness in the hardwood market and now leads to Bleached Hardwood Kraft BHK price increase announcements. The spot prices for recovered paper are up in Asia.

Uncoated Free Sheet post $60/ton price increase; International Paper curtails Production

Most producers announced a March $60/ton hike on cut size (copier) and offset rolls. However, prices have been under pressure all quarter – transaction paper prices are down $10/ton and $15/ton in rolls and cut size, respectively. As previously noted, raw material costs are all rising - it's hard to believe uncoated white paper prices sliding too far.
Meanwhile, International Paper announced plans to curtail 120,000 tons of capacity from the market by the end of April – idling two machines.

Who Makes Digital Printers?

The Digital paper market is enjoying excellent growth and serves customers interested in personalized printing.
It is reported that the USA may now have over 1100 digital printers. Top of the line printers include Xerox iGen3,
HP Indigo, NexPress, Xeikon and Canon CLC.
The majority of the end uses are for direct mail, brochures, posters, and business cards - all applications that require
variable, personalized information on each piece of printed material.

Digital Papers see BIG Growth

Steady expansion of the digital (on demand) printers, and paper, has been reported. Current levels of ‘cut-size’ digital paper are now 6.2million tons a year and predicted to grow to over 8million by 2008. Many of Paper.com's papers
are specially designed for this market and are available in quantities as small as a 500 sheet package.
The right paper is important for successful reproduction. Properties such as brightness, smoothness, and formation all are very important.
Many new sheet sizes to compliment our 8 1/2 X 11" and 8 1/2X14" stock are becoming available. These new sizes include 14.33 X 20.5" ; 11X17" ; and 18X12". We market several digital grades offered by such mills as Domtar, International Paper, MeadWestvaco, Neenah, Smart, and Xerox. These are considered the leaders in this dynamic market.

It's Official International Paper sold Paper Mills

International Paper, North America's Largest paper maker, agreed to sell its Fine Paper Business to Mohawk Paper Mills for $65million. The deal will close early in the second quarter.
This division includes uncoated text, writing, cover and artist papers. The mills include Hamilton, Ohio (65,000tons); and converting locations in Saybrook, Ohio and Westfield, Mass. The sale means Mohawk will market Strathmore, Brite Hue, Via, and Beckett. Paper.com proudly distributes all these grades and will enjoy non interupted service.

International Paper continues to progress with selling the Industrial Paper unit to Kohlberg & Co. Current terms include mills in DePere and Kaukauna, Wisconsin for $180million.

Paper Prices Continue to Increase

Paper producers have once again announced a price increase for Spring shipments.
Examples of price increases include Appleton NCR +7%,;Pressure Sensitive (MacTAc, Avery) +7%;
Kromekote + 5%; Crane +5%; Fox River +5%; Mohawk +5%; Neenah +5%; Strathmore and Beckett +5%;
Offset +5%; copy papers +5%. We hope this is the final price increase prior to the summer.
Although Paper.com has attempted to hold off on increasing our prices we are now forced to
add thesenew price levels. We will be updating our site during the month of April.

Uncoated Paper Prices Increase

Almost all of the major paper producers have announced a price increase of $60/ton for shipments after March 15. The grades effected include both copy paper (cutsize) and text paper (Offset rolls). Many paper manufactures agree that demand is not strong; however, because pulp (the largest raw material component in paper ) has increased in price - suppliers have no choice but to increase paper prices.

International Paper Reduces Capacity

International Paper Co. has announced it will shutdown two uncoated free-sheet machines early next month at one of its mills in Florida and one in Maine. The company’s planned shutdown of PM3 at its Pensacola mill in Florida and PM1 at its Androscoggin mill in Maine will affect a total of 200 jobs. Combined, the two machines produce approximately 250,000 tons of uncoated free-sheet paper annually. IP’s current annual uncoated free-sheet capacity is about 5.6 million tons between the U.S., Brazil and Europe. This curtailment is in addition to IP’s announcement last week to reduce output by 120,000 tons by the end of April at unspecified mills.

Paper Week 2005

Each year the chief Executive Officers of all the major Pulp and paper Industry from around the world meet. This year’s meeting will be held in New York City at The Waldrof-Astoria. The American Forest and Paper Association (AF&PA) host this.
It will be April 10-13, 2005.

Report on paper in 2004

Forecasts indicate continued increase in cost for raw components such as fiber, energy, freight, and chemicals. Accordingly, purchasers are budgeting for increased paper prices.
Mill management forecast operating rates to sustain at 92% (roughly, the same as 2004).
Additional consolidation, mergers, and equipment curtailment will be the norm.
Highlights include-
-Operating rate best in 10 years because of hundreds of machine shut downs.
-USA exports should improve with strong dollar
-Pulp prices will continue to increase
-Uncoated Freesheet (offset, copier paper) will grow at a decreasing rate
-More electronic communication
-Negative customer reaction to increased paper prices – substitute sub straights will be used
-Most mill capital expenses will be allocated to projects for environmental and energy efficiencies.
-Mill capital budgets at historical low
-Little money spent on capacity nor process improvement
-Purchasing paper online will increase

Paper.com has YOUR paper

Many consumers are now turning to the internet to purchase their paper. The traditional merchant or stationery store certainly still accesses, but web based purchasing is growing in demand. Many are pleased with the wide assortment of paper grades the site has and boost of competitive pricing. Paper.com now markets more paper on line than any other site. The cost of freight continues to be expensive, but unfortunately, paper is dense and just plain costs a lot to ship.

New Websites: Weyerhaeuser's Lynx Opaque and Cougar Opaque

Pardon the pun, but there is a 'mew' site on two grades of Weyerhaueser paper: Cougar Opaque, Weyerhaeuser’s premium opaque printing paper, and Lynx Opaque, a #1 opaque. Follow this link to read a review at PaperSpecs.com or visit the Weyerhaeuser micro sites directly at www.lynxopaque.com and www.cougaropaque.com.

Paper Industry Reports Strong Fourth Quarter 2004

A survey of 20 public U.S. forest product companies by Pulp & Paper Week indicated that the sector has had a strong fourth quarter and that, for the whole of 2004, the group has had the best financial performance in four years. Over the past decade, the industry has consolidated, capacity has been shuttered and many non-core assets have been shed. Performance over the past year suggests that the industry might finally be improving.

North American Paper Shipments rise

North American printing and writing paper shipments rose 6.9% from a year ago. Many large paper producers are reviewing another increase in paper prices.

USA very big on Recycling

Americans are recycling paper at an all-time high, recapturing 300 pounds per person each year. That's about half the paper produced in the United States. America is the best nation when it comes to recycling paper per person.

Paper Producers Consolidate

Mohawk / International Paper
Mohawk Paper Mill announced it will purchase the Fine Papers Unit from International Paper. The Fine Papers’ Business includes the writing, text and covers paper and artist products segments. Sites include the Hamilton, Ohio paper mill, the Saybrook, Ohio converting facility, and the Westfield, Mass mill as well as Artist Products converting operation. The brands include Strathmore®, Brite Hue®, Via®, and Beckett® brands.

The Fine Papers business produces approximately 65,000 tons per year. This will effectively double Mohawk’s capacity.

SPIN-OFF GOES PUBLIC
Neenah Paper Inc., manufacturer of CLASSIC and ENVIRONMENT papers, recently completed a tax-free spin-off from Kimberly-Clark and began trading on a stand-alone basis on December 1, 2004.

The new public company includes Neenah Paper, a premium Writing, Text and Cover business; Technical Paper, a producer of durable, saturated and coated base papers and a Canadian pulp business.

SPECIALTY COATEDS ARE ACQUIRED
CTI Paper USA proudly announced the acquisition of the Currency and Jazz grade lines and trademarks from Appleton, which will take place on January 1, 2005.

Currency and Jazz are strong, well-established coated colored Text and Cover brand names, popular in the graphics markets for decades. "We will improve the brands through aesthetic redesign in the coming months, ensuring Currency and Jazz grow their strong position in the
specialty coated papers category," said Brian J. Cowie, C.E.O. of CTI.

Fraser Papers to Sell Park Falls Mill to SMART Papers
Fraser Papers Inc. announced it has signed an asset purchase agreement with SMART Papers LLC to acquire pulp and papermaking operations in Park Falls, Wisconsin. The purchase agreement includes a 470,000 square foot converting, distribution and customer service facility in West Chicago, Ill. Fraser papers will receive a passive minority interest in the parent of SMART Papers as part of the transaction, which is subject to customary closing conditions. The deal is expected to close in approximately 60 days.

MeadWestvaco Sells Paper Unit
Paper and packaging maker MeadWestvaco Corp. has agreed to sell its paper business and associated assets for $2.3 billion to reduce its debt and focus on growing in global packaging markets, the company said on Tuesday.

It said the deal to sell its paper unit to a new company controlled by Cerberus Capital Management LP,

Domtar Reduces a Canadian Asset
Domtar announced it will curtail a specialty paper machine in its Cornwall, ON facility. The company recited the weak Canadian dollar as the reason for the shut down. The machine will cease production in March.