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.