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.