Black Liquor Credit Helps End User

The black liquor tax credit (a result of the Obama administration energy package) is driving down paper prices, according to NewPage, North America’s largest maker of coated paper. They claim the average selling price for coated paper probably declined by $40 to $50 per ton.

Fraser Paper Announces Changes

Jeff Dutton, Fraser Papers's president and COO has appointed Jim Gehrman to the position of vice president, Sales with responsibility for all of the company's paper product sales.

More Paper Mills May Close

from RISI report
Beyond announced shuttered machines, John Maine of RISI forecasts additional 3.6M tons of closures are likely around the world. John Maine, VP - Pulp and Paper at RISI, Inc and Project Team Leader, noted, "The market for uncoated freesheet in North America has been in decline since 1999, falling 5% and 8% for the past two years, and the drop is certain to accelerate in 2009.

USA Post Office Continues to Loose Money

As we reported in past, the USPS forecasts mailing approximately 175 billion less pieces and will loose as much as $7billion for 2009. USPS continues to review cost cutting measures such as only delivering mail 5 days/week; closing offices; and future payments for retirees.

Bigger trucks requested by International Paper

In order to cut costs and become more efficient delivering more goods in fewer trips, International Paper Company is pushing to allow bigger trucks on U.S. highways over the objections of road-safety groups. This would keep shipping costs down for all companies that ship full truck loads, such as Coy Paper Company.

Paper Distributor Xpedex to buy Gould Paper

Gould Paper (Canada), Ltd., a subsidiary of privately held Gould Paper Corporation, headquartered in New York City was sold to xpedx, a business of International Paper. Gould Paper (Canada) is distributor serving western Canada .

After 174-Year Run Michigan Newspaper Closes

The last edition of The Ann Arbor News will be printed this week, ending its 174-year history of delivering the news to Michigan's fifth-largest city.
The Ann Arbor News will be replaced with a website, AnnArbor.com, which will also produce a print edition twice a week.

Gannett Shuts Down Plant

Gannett Media is closing a printing and production plant by September in Wisconsin. The plant currently prints the Fond du Lac Reporter. Production of that paper will be shifted to Gannett's Appleton, WI, facility.

NY Times Reports Profit

After all the depressed news we report on the newspaper market, the New York Times reported a profit of $39.1million for the quarter (up from $21.1 million last year - and up from a loss of nearly $75million 1Q09). Although advertising revenue continues to trend down, the company has been successful in aggressive cost cutting. The company reported a 31.9% decline in ad dollars last quarter, while circulation rose 1.5% (due to increase in price). One important note, even the NYT internet ad dollars fell last quarter (down 4.3%).

Coy Paper now on Twitter

If you enjoy reading these current releases, Coy Paper Company LLC in now updating the company's Twitter account daily with all the current trends on the Pulp and Paper Industry. You may wish to follow the very latest at http://twitter.com/CoyPaper.

Stora Enso Announcing it will Close Mills

Stora Enso, largest papermaker in Europe, will stop production at unprofitable mills as demand and pricing for paper remains weak. In a related announcement, UPM-Kymmene Europe’s second- largest papermaker, is also reducing capacity in Finland for the same reasons.

Advertising Forecast to Fall for September Publications

September issue magazine ad pages totals are beginning to be revealed. Most numbers are down versus September of 2008.
Conde Nast ad pages in W declined 53% Allure fell by 52%, Self by 51%, Glamour by 42%, Vogue by 37%, Details by 35%, GQ by 32% and Teen Vogue by 32%.
Hachette Filipacchi announced Elle’s ad pages down 21%.
Hearst reported Harper’s Bazaar advertising pages fell 23-26% and Cosmopolitan 18%.
Time Inc.’s Essence ad pages decreased by 16%.

Another Large Coated Woodfree Paper Machine for Asia

Moorim Paper in Ulsan, South Korea ordered a 430,000-450,000 ton per year coated woodfree paper machine. The unit will be supplied by Voith Paper and is scheduled to start in June of 2011. Half of the production will be sold domestically and half exported to the U.S., Europe and to other countries in Asia.
Just last week, Shandong Huatai ordered a 500,000TPA coated and uncoated woodfree machine, which the company plans to install in Shandong, China and start in the first quarter of 2011.

Pulp Prices Increase

Tembec announced to all its customers that they will be paying an additional $30/ton ($730/ton) for its Northern Bleached Softwood pulp. This is effective immediately. The increase includes exports. Many of Tembec's competitors are forecast to follow this increase.

Canadian Printer Exists Bankruptcy

After one year operating under Chapter 11, Quebecor World announced it will exit bankruptcy protection. The company secured $800million in financing. The new name of the printer will be World Color Press.

2009 Mid-Year Economic Report for Tag & Label Industry

notes from a report by Jack Kenny
Label & Narrow Width Association staff conducted a survey, converters reported a mixed bag of results. While most commented on sales declines as deep as 30 percent a few boosted increases as high as 50 percent. Profits were down for most, but up for others. Printers vented strongly against price increases by material's suppliers. The majority of them said they were unable to pass along those increases to customers, instead focusing on internal changes to reduce operating costs.
Yet the companies that buy labels still must buy labels, and they have been keeping the industry pumping along. Competition, by all accounts, is more fierce than ever. Clearly, converters directly tied to industries such as the automobile market continue to be hurt the most.

Containerboard Market sees Some Hopeful signs

Deutsche Bank reported stabilized pricing and recovering volume trends
prices have dropped $70-80/ton off last autumn's cyclical peak. However, prices were reported stable in June and appear stable again in July. Moreover, most industry players remain reasonably profitable at current price levels, despite a sharp drop in volumes. Industry consolidation, a proactive approach in managing supply & avoiding inventory overhang, and a weak US Dollar have all played a role in this performance. Additionally, domestic and export volume trends are recovering. June box numbers represented a first real sign of domestic volumes starting to improve.

Magazine Mergers Slow Down

There were only 129 media transactions reported for the first quarter of 2009, down 36 percent from the first quarter of 2008; values, meanwhile, plummeted 91 percent to a combined $1.3 billion.
The second quarter did not fare much better and most transactions were a result of distressed situations. Market valuations have been under pressure due to the lack of debt capital and a general perception of the M&A market as being a ‘buyer’s market’. The largest issue facing magazine M&A is the lack of senior bank financing.

Cox Enterprise Sells Three Newspapers

Cox Enterprises has sold three of its papers in Texas and Colorado. The Waco Tribune-Herald went to the Robinson Media Co. The Daily Sentinel and The Nickel went to Grand Junction Media (owned by Seaton Publishing). Cox is still seeking buyers for its newspapers in North Carolina and Texas including the Austin American-Statesman. Review other releases by Coy Paper for additional market information on the News Paper industry.

Fraser Closing Pulp Mill

Fraser will close its pulp mill in Edmundston, New Brunswick. The company must now buy pulp for its 475,0000 ton per year uncoated freesheet and mechanical specialty paper mill in Madawaska, Maine. Fraser filed for bankruptcy on June 18 as reported by Coy Paper earlier..

Forecast for Printing Industry

The forecast is for print advertising to fall 22.8 percent to $9.8 billion between 2008 and 2010 but will rise 14.3 percent to $11.2 billion by 2013, according to PricewaterhouseCoopers. However, circulation spending will continue to fall to $8.4 billion in 2013, down from $9.7 billion in 2008.
But a number of individual segments, including b-to-b publishing (-3.3 percent) and consumer magazine publishing (-1.7 percent) are expected to decline.
The current economic slowdown has acceleration digital migration. The report went on to comment on digital spending continuing to be the industry’s main source of growth, with revenues accounting for 25 percent of total sales in 2013—up from 17 percent in 2008.

Obama administration Reviewing Tax Credits

The Obama administration continues to review the enormous tax credits the pulp and paper industry is enjoying. The new found money (which is badly needed) was discovered when executives in the industry learned that by adding diesel fuel to the black liquor already recovered and reused in the paper making process – the industry is entitled to the alternative fuel tax credit.

RISI names top 50 Paper Executives

The annual RISI ‘power’ list of paper executives was recently published. Many from Asia make the list.
Top 10 include
1 Jose Luciano Penido / Votorantim Celulose e Papel (VCP)
2 Chen Hongguo / Shandong Chenming Paper
3 John Faraci / International Paper
4 A J Devanesan / ARIL
5 Jose Honorio / Portucel Soporcel
6 Dr Wolfgang Palm / Palm
7 RR Verderah / BILT
8 Teguh Ganda Wijaya / APP
9 Duncan Pollard / WWF
10 Cheung Yan / Nine Dragons Paper
Notable mention at #50 was the Christian Church – the bible is the best selling book of all time. An estimated 100 million copies are sold every year.

June Figures Out for Paper Industry

The American Forest & Paper Association reported early estimates for June paper shipments in the U.S. as follows: coated mechanical shipments fell 17.7% in June, as compared to June 2008, and declined 33.5% year-to-date, as compared to the same period last year. Coated freesheet (woodfree) shipments were down 23.9% in June and 29.3% year-to-date. Uncoated mechanical shipments decreased 30.3% for the month, 29.7% year-to-date. Uncoated freesheet (woodfree) shipments dropped 16.7% in June and 15.6% year-to-date.

CEPIFINE Reports Decline in May Woodfree Paper Shipments

report from CEPIFINE
The Association of European Fine Paper Manufacturers announced a 24.3% decrease in European coated woodfree paper shipments in May, as compared to the same month in 2008. Year-to-date shipments fell 26.6%. Exports declined 43.1% in May, 46.8% year-to-date. CEPIFINE reported uncoated woodfree paper shipments were down 16.1% in May, 17.4% year-to-date. Exports, however, were up 3.5% for the month, but fell 15.8% year-to-date.

Magna Forecasts 2009 Ad Revenue Decline

Another reference on the advertising revenue for 2009-
Interpublic Group’s Magna Global, the second largest owner of advertising agencies in the U.S., has predicted that ad expenditures will fall 14% in 2009 and not recover until late 2010. (Competitor ZenithOptimedia Group, a division of Publicis Group, forecast a decrease of 10.6% for the U.S. in 2009.) Magazine advertising revenue was projected to decline 18% this year, continuing to fall at a compounded annual basis of 3.3% per year from 2009 through 2014. Magna forecast growth in direct mail, however. Though the sector is predicted to loose 11.2% in 2009, it is seen as increasing 2% annually between 2009 and 2010.

More Bad News for Coated Papers

Shipments and pricing remain depressed for publication coated papers. Most buyers report prices fell $15/cwt in June (note, May also saw $15 decline - April down too). Printers report reduction in orders BUT, also they trimmed of inventory - this should help - but year to date demand is down approximately 35%. The catalog season should help.

Magazine Ad Revenue Falls 21% in First Half

As reported by MediaWeek July 10,2009
Magazine ad revenue tumbled in the first half of 2009 as the recession continued to take its toll on marketing spending, according to new figures from Publishers Information Bureau, a service of Magazine Publishers of America.

Rate-card reported ad revenue declined 21.2 percent to $9 billion on a 27.9 percent decline in pages in the first half, reflecting declines across the 12 categories that make up more than 85 percent of total magazine ad spending.

Categories seeing the sharpest declines were finance (down 48.8 percent), auto (off 47.8 percent) and retail (down 34.2 percent).

The scant good news: within the broader ad categories, there were upticks in ad spending for certain food products; soaps and hair products, which benefited titles with a focus on lifestyle, fitness and celebrities.

McGraw Hill may sell BusinessWeek

The struggling BusinessWeek Magazine is looking for a new owner. This is the last of McGaw Hill’s portfolio of magazines. Recent circulation is slightly under 1million and advertising pages has fallen 37% so far this year. Given the fact the publishing industry is doing poorly – school is out as to who might have the cash to purchase BusinessWeek.

Canadian Government asking Catalyst Paper for Taxes

Catalyst Paper has fallen behind on paying its taxes to four of Canada’s municipalities. The government is demands it must pay its full taxes.

Maine Stronger Paper Producers

Bangor Daily News recently released an interview with Keith Van Scotter, the CEO of Lincoln Paper and Tissue. He commented on the paper industry and specifically which facilities in Maine will survive. His picks included Verso of Jay and Bucksport – producer of supercalender and coated publications papers; SAPPI in Skowhegan and Westbrook – producer of coated free and technical papers; New Page of Rumford – producer of coated papers; and of course his mill Lincoln (in Lincoln)– producer of tissue paper.

Kruger Shuts Down Coated Machines

Kruger will shut down three machines and two coaters at its Trois-Rivieres mill in Quebec. The machines had a capacity of approximately 230,000 TPA of coated publication papers. Newsprint and supercalendered paper production will continue at the mill and Kruger will also keep making approximately 258,000 short tons per year of coated mechanical paper at its Wayagamack mill.

Buyers say no to Newsprint Price Increase

Beyond the struggle for revenue that most newspapers currently battle, purchasing departments site resistance to a price increase for the paper - one of their biggest costs. Most confirm that even though the trend continues for decreased readers and all agree supply from newsprint producers is down - but they have been unsuccessful reducing inventory. That is, demand for newsprint is falling faster than manufactures can curtail production.

International Paper sees Pulp Demand Growth

International Paper Co. Chief Executive Officer John Faraci , stated he expects a “modest” increase in pulp demand this year as Chinese orders make up for declines in most other markets, “Most of the growth is being driven by demand in China,” Faraci said. The growth will be in the “single digit” percentage range, he said.

Will the Newsprint Increase Happen?

AbitibiBowater still not joining others in advancing newsprint price increase - I would assume without AbitibBowater - the August increase is a goner!

Advertising Dollars Remain Depressed

Nielsen’s Global AdView Plus reported that ad expenditures decreased by 7.2% for the first quarter of 2009, as compared to the same period last year. Spain, with a 28.2% drop in ad spending, led the way in making Europe the hardest hit region. Sales in the U.S. fell 12.7%. The Asia Pacific area announced a decrease of only 2.3%. Magazine advertising was down 17.4%, 22.2% in North America, and newspaper ad spending fell 9.1%.

St Mary's Paper Continues Shut Down

We reported earlier this year, St. Mary’s Paper was closing two of three paper machines in their Sault Ste. Marie, Ontario mill in May. These machines remain curtained. The company produces supercalender paper.

Top Print and Online Catalogers

Most catalogers report flat sales for 2008 versus 2007, top print and online catalogers include (account/catalog sales)-
Dell $51,936,000
Thermo Fisher Scientific $10,500,000
IBM $9,076,000
Staples $8,900,000
CDW $8,100,000
Henry Schein $6,400,000
Wesco $6,110,000
United Stationers $4,986,900
OfficeMax $4,310,000
Office Depot $4,145,700

Will Paper Industry Level Off?

After six straight quarters of paper price increases in 2007 and early 2008, we than witnessed aggressive discounts through the first half of 2009. Many now are beginning to think that inventories are low, manufacturers have curtailed production, and the catalog season is about to begin. If the paper companies maintain a policy of balancing supply with demand, ship dates and prices could advance. Perhaps by Spring of 2010?

Report on Paper Industry

Paper Industry Magazine just published a survey on the paper industry and highlights included
Paper and Paperboard capacity has contracted 7.3% since its 2000 peak.
-18 USA mills were permanently closed in 2008; shuttering 27 paper machines – 14 more machines were shut down at other mills
-In 2007, 17 mills and 38 machines were permanently closed.
-Paper and Paperboard are forecasted to decline another 1.8% in 2009

Magazine Closings Outpaced New Launches

Magazine closings outpaced launches in the first half of the year as publishers were squeezed by the advertising recession. A total of 279 folded while only 187 made their debut.

Top Book Publishers

I was doing some research of the Book Publishing Industry, a few notes of interest -
Of the 2600 book publishers in USA, the five biggest command 45% of the market share
15.5% Pearson
9% Houghton Mifflin
9% McGaw-Hill
6% Scholastic
5% Bertelsmann

Major American Book Segments

Major American Book Segments
The major Book Segments by revenue include
71% Trade Book
10% Professional Books
9.5% Religious Books
6% Elementary / High School Books
2.5% College Books
1% University Books

Paper Industry Continues to Recycle

The AF&PA confirmed that in 2008, the paper industry recovered 57.4%, up from 56% in 2007. The trend has been up for years; however, the current recession is allowing for less paper demanded and therefore, less paper will be available. The value of recycled paper has also declined. Note: paper and paperboard capacity in USA has decreased nearly 1% to 96.3million tons. AF&PA forecasts capacity will drop another 1.8% in 2009.

Domtar's Pulp Mill to Restart

Following a seven-week shutdown, Domtar is restarting its 398,000TPAnorthern bleached hardwood market pulp mill in Woodland, ME. All of the Woodland NBHK output for at least the next three months has been sold to China.

China’s Largest Newsprint Producer will Produce Coated

Shandong Huatai Paper, China’s biggest producer of newsprint, has ordered an 800,000 TPA coated woodfree paper machine from Metso Paper. The machine, will be 9.9 meters in width with a design speed of 2,000 meters per minute. A late 2010 start up is planned.

Newsprint Market in Confusion

As reported in our past releases, newsprint prices have fallen around $195/ton or 28% so far this year. Demand has also steadily declined, but, Kruger, Catalyst, Tembec, and White Birch announced a $50/ton increase for August shipments, despite the weak market.
Newsprint demand in North America fell nearly 29% in May – vs. 2008 and 31.7% so far this year vs at this time in 2008. Furthermore, consumption at US dailies fell 26% and paper mills only are operated at 67% of capacity (vs. 94% in May 08).
Note: we continue to report producers continue to take downtime (693, 000tons or 27% of North America quarterly capacity during 2Q2009), the reality is that more permanent closures are
inevitable.

USPS Reports Loss for May

The U.S. Postal Service reported a $677 million net loss for May which yields a year-to-date loss total of $3.4 billion. Also, reported was a 20% drop in overall volume for May and a 13% decline year-to-date. Periodicals volume dropped 13% for the period and 7% year-to-date.

Gannett Reports more Challenges

The Gannett Co. confirmed it will reduce its workforce. The company is preparing to lay off more than 1,000 employees as the largest newspaper publisher's workforce continues to shrink along with its advertising sales. Note, we reported in past that Gannett reduced its workforce 3,600 from 2007 to the end of 2008.

Vibe Magazine Folds

Vibe, a staple of music journalism since 1993 and one of the most influential publications has folded. The company was unable to secure financial backing, or to restructure its debt. Declines in the music industry and in advertising worked against the business. It had been a tough year for Vibe, which faced a steep drop in ad pages and circulation. The magazines circulation base was 600,000 from 800,000. Vibe also had reduced its frequency from monthly to 10 times a year.

Kimberly-Clark Slims Down

The maker of Kleenex tissues, Huggies diapers and many other household items plans to cut 1,600 jobs, of its global work force, as it slims down in the tough economy.
Kimberly Clark does not plan on closing any plants.
Shoppers have cut back on spending because of the recession, high unemployment and the housing downturn. Meanwhile revenue, which had been steadily rising, began to fall late in 2008.