Top 2009 Printers

The top printers by category for 2009 include
Printer / Segment Sales –Millions-$USD / Total Sales –Millions -$USD

Publication Printers
Worldcolor /$884 / $4,017
QuadGraphics / $861 / $2,266
Conveco /$352 / $2,200
Brown / $332 / $415
Publishers Press /$222 / $234

Catalog
QuadGraphics /$1,110 / $2,266
Worldcolor / $522 /$4.017
Arandell / $267 / $287
Consolidated /$115 / $1145
Sheridan / $94 / $348

Book
Worldcolor / $482 / $4.017
Courier / $280 / $280
Arvato / $266 / 321
Taylor $113 / 113
Walsworth Pub $98 / $115

Direct Mail
Cenveco $550 / $2220
IWCO / $252 / $252
Consolidated / $172 / $1,145
Worldcolor / $161 / $4,017
Segerdahl / $158 / $175

Finding the Right Printer Partner

These are difficult and challenging environments in the paper and printing markets, it is important to review your printing platform to assure you are still as cost competitive as possible
-Does the printer’s equipment still fit your publication?
-Do you still invite competitive printers to quote your publication?
-Is your printer still financially stable?
-Where has the printer downsized? Has this area effected your publication?
-Slower response from CSR, no new ideas on distribution, the paper buyer has not recommended any alternative papers, etc.
-Is your printer taking the correct steps to be environmentally friendly?
-Has your printer invested in new technologies?
ALSO,
-Have you considered more cost effective alternative papers?
-Lower brightness; Uncoated Supercalender instead of coated, lighter basis weight, self-cover, Groundwood containing /LWC in stead of a 'free; sheet.
-Have you reviewed reducing the size of your publication or fewer pages?
-Are you still distributing to nonrevenue producing subscribers?
It's January, start the year by reviewing all your vendors to confirm they are still competitive and partner up with your vendors to mutually create ways to save money.

Uncoated Shipments down in 2009

Total Uncoated Free shipments were down -11% for 2009 to 9.7Million tons. USA imported 855,600 tons for 11 months - 16% lower than last year and exports declined 6% at 779,300.

Uncoated Recycled Board Prices Increase

Graphic Packaging International announced a price increase of $50 per ton on all grades of PaceSetter(R) uncoated recycled board (URB), effective with shipments after Feb. 18.
The company is one of the largest producers of folding cartons and holds a leading market position in coated-recycled boxboard and specialty bag packaging.

Coupon Clipping – Hope For Newspapers?

The recession of 2009 saw consumers begin to use more coupons than in recent years, in fact, it was the first increase in 17 years. Shoppers turned to both the newspaper as well as online and cell phone applications to find coupons. Of particular note was online coupon access increased 92% and redemption shot up 360%, although the Internet still accounts for only 1.5% of coupons redeemed, according to a report from Inmar. Despite the rapid rise of online coupons, newspaper inserts still account for 89% of coupons distributed to consumers and more than half of coupon redemption. Web sites accounted for 0.3% of coupons distributed to consumers and 1.5% of redemption. 19.6% of online coupons are redeemed and it is estimated that consumers redeemed a total of 3.3 billion coupons in 2009, a 27% increase from 2.6 billion in 2008.

World Color Sold for $1.4Billion to Quad/Graphics

From Company release.
Quad/Graphics Inc., the largest privately held printer in the US, will acquire Montreal based, World Color Press Inc. for an estimated $1.4 billion. The deal will close in the summer when the expanded Quad/Graphics will become the 2nd largest commercial printer in the US behind RR Donnelley & Sons Co. Worldcolor shareholders will own 40% and Quad/Graphics shareholders 60%. Quad/Graphics CEO Joel Quadracci, age 41, will lead the combined entity as chairman, president and CEO. Worldcolor’s CEO, Mark Angelson will be named to the board and oversee the integration. Worldcolor prints magazines like Sports Illustrated, Rolling Stone, The Crate & Barrel catalog and Yellow Book Directories. Quad/Graphics’ clients include Newsweek, GQ and the LL Bean Catalog. In the 12 months through Sept, their combined revenue was $5.1 billion.


December Paper Shipments Up

Excerpts from AFPA report

The official report from AF&PA outlined USA shipments of Printing and Writing Paper increased 6% in December versus December 2008, the 2nd consecutive increase, with all 4 grades reporting an increase for the month. YTD shipments were down 15%. USA purchases (shipments + imports less exports) also increased in December, up 3% vs. 2008, but still down 17% YTD. Printing and writing inventory levels decreased 2% or 41,000 in Dec09 vs. Nov09.

China Continues to be a HUGE consumer of Pulp

In 2009, China imported a record high 13.7Million tons of market pulp, increasing 44% over the 2008 deliveries. The extra demand was consumed by the new machines starting up without domestic fiber. Most exerts in the industry believe the Chinese will continue to grow their purchases of market pulp, despite less worldwide supply and increased prices. There has also been an increase in pulp consumption in India with solid demand in Bangladesh, Pakistan and Vietnam. Suppliers in Brazil and Indonesia had pulp availability decrease due to flooding, while Russian suppliers had unusually frigid temperatures, slowing production.

Chinese Continue Uncoated Expansion

Three new pulp & paper investments in China announced by Guangxi Yongkai Sugar and one by Guangxhi Huacheng Paper adding almost 1Million TPA of uncoated paper. China, now the largest producer of uncoated papers, also continues to witness increases in consumption.

Uncoated Price Increase Announced by ALL!

Last week we announced Domtar increased their price and, as assumed, most of the uncoated white paper mills joined Domtar in reporting a price increase for late February or early March. Most increases were $40/ton, the exception is Wausau which we reported as $60 for text and cover grades. Domtar and Boise told customers they would only increase cut-size business papers; however, International Paper, Glatfelter and Finch extended the increase to offset rolls, tag/index/file folder stock and other converting grades.

Newsprint Producers Hope for Improvement

The year 2009 was not kind to many paper markets, and Newsprint was hit especially hard. After a reduction of 14% in 2008, demand continued to erode another 24% in 2009. Electronic communication has truly hurt this industry. Capacity continues to outstrip demand, despite reduced pricing and plant closings. AbitibiBowater continues to operate under chapter 11 - commanding 43% of the market, White Birch is #2 at 22% - failed to pay an interest debt due last Fall, and Port Huron - filed for bankruptcy protection. Even if the economy improves, will end users go back to newspapers for news, classified advertisements, and coupons?

Printing Sales Continues Down in 2009

The NAPL reported that US commercial printing sales were down -16% in 2009 to $72Billion. The rate of decline slowed significantly since last summer, with a forecast for 2010 of rising +2 to 3% to $73-74 billion. NAPL forecasts a slow recovery, not hitting its stride until later in the year.

NY Times Charges Fee for Online News

The New York Times announced they will soon charge non subscribers for heavy use for attaining news on their website. The company will continue to provide free content for a limiting number of articles and print subscribers will continue to have free access to the site. Under the new metered model, a viewer can read a certain number of articles per month free before being charged a flat fee. This is a similar model to The Financial Times. The exact cost was not confirmed. Note, the NYTimes is one of the most popular newspaper site in the country (over 17 million readers) . The Times will begin charging in January 2011.

Catalyst Paper to Idle Paper Machine

The Catalyst Paper Company reported that the 1PM at its Crofton mill in British Columbia will be curtailed indefinitely due to weak newsprint and directory paper demand.
The machine has a capacity of 140,000TPA of commodity grades and was temporarily idled on December 23, 2009 for the holiday period.
The mill has an annual production capacity of 200,00TPA of newsprint and 210,000TPA of directory paper, along with the capacity to produce 343,000TPA of NBSK pulp.

Newsprint Machines Still Feel Results of Poor Demand

Throughout the last several years, Coy Paper has reported on shuttered newsprint equipment. Today, we confirm AbitibiBowater’s Fort Frances mill in Ontario will now be shut down indefinitely due to an effluent problem. They will remain down until they are in compliance with all laws and regulations. 

Stora Enso will restart the #2 paper machine at Varkaus Plant in Finland after having been down for 6 weeks. The stop was due to market related down time. The Varkaus, facility has a capacity of 290,000TPA of directory paper and newsprint, while PM #3, which has remained running, has 310,000TPA capacity.

Wausau to Increase Paper Prices

Monday, March 1, 2010 Wausau Paper will increase the base price of the following grades by $2.00/cwt:
Exact Index; Exact Vellum Bristol; Exact Tag; Exact Opaque Colors; Exact Multipurpose

Uncoated Prices May Increase

Domtar just announced a $40/ton price increase on their business paper cut size grades, effective February 15. So far, this is the only grade line to be increased. We can only assume that all Domtar’s competitors will follow; especially in that demand is improving including December 2009 vs 08 shows shipments +1.2% ( this is the first positive comparable since April of 2007).
Certainly raw material costs including pulp prices and energy continue to surge. Also,inventories at both the mills and the merchants are down 20% down from this time last year. Lastly, recall International Paper and Domtar will close 800,000TPA of capacity by mid-2010, representing 7% of North America’s Uncoated Free Sheet capacity; furthermore, the artificial support from the black liquor credits are gone (that was $8Billion in 2009!!). All indicators that the price increase will most likely stick.

Containerboard Pricing is ‘on the move’

A price increase for both the East and the West Coast was announced in December for January shipments. We think these price increases might actually happen, or at least $25-30/ton of the announced increase; the balance will most likely be absorbed in the February / March time period. Although demand has not appreciably picked up, raw material costs certainly have increased, thus, creating this 'forced' increase.

Reader’s Digest on Target to end Bankruptcy

Reader’s Digest just reported that their restructuring plan was approved and the company could exit bankruptcy by January 31. The company’s debt would be reduced from $2.2Billion to $550Million and the retirement for past employees would be modified. They will reduce headcount and move headquarters to a more efficient faculty.

NewPage Appoints New President and CEO

From NewPage News Release
NewPage Corporatio announced that Richard D. Willett, Jr., President and Chief Executive Officer, has resigned from NewPage effective immediately. Mark A. Suwyn, former Chief Executive Officer and currently Executive Chairman, has been elected to serve as Chief Executive Officer until a new Chief Executive Officer is named.

NewPage is headquartered in Miamisburg , Ohio ,and is the largest coated paper manufacturer in North America , based on production capacity, with sales of $4.4 billion. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers.
NewPage owns paper mills in Kentucky , Maine , Maryland , Michigan , Minnesota , Wisconsin and Nova Scotia , Canada . These mills have a total annual production capacity of approximately 4.4 million tons of paper, including approximately 3.2 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper.

December saw Improvement for Printing and Writing Papers

Printing and writing paper shipments improved in the USA for the month of December. Total shipments yielded 1.478Million tons, up 2.8% vs. November and 5% higher than last year. Full year shipments decreased 15.6% to 17,000 tons. Coated mechanical rose 15.5% to 306,300 tons and coated freesheet rose 12.1% to 256,500 tons vs. 2008, with both increasing vs. November YTD, both were down almost 20% with coated mechanical at 3.2Million tons and coated freesheet down to 3.25Million tons. Uncoated freesheet rose 1.2% vs. December 2008 to 752,399 tons, with YTD volumes down 11.6% to 9Million tons. Uncoated mechanical remained stable vs. December last year, at 131,800 tons, but dropped 21.8% YTD to 1.6Million tons.

Canon Still Progressing in the Acquisition of Oce

Canon, the Japanese maker of cameras, copy machines and other electronics and
Oce, which sells printers and copiers and has relied heavily on sales to banks and architecture firms are on target for Canon’s $1.1Billion purchase. The over riding objective is to be the #1 presence in the printing industry. The combination will yield a huge sales network in Asia, Europe and the USA.

The combined Canon-Océ will be up against competition from Fuji and Ricoh to dominate the European, USA and Asian markets. Canon’s acquisition comes just a year after Ricoh bought Ikon Office Solutions, based in Pennsylvania, for $1.62 billion.

Cenveo Plans to Close Another Plant

In addition to Cenveo closing its Charlottesville, VA printing plant, which they obtained through the purchase of Cadmus Communications they will also close the Baltimore commercial printing plant in February.

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Magazines Post 25% Decline in Advertising Pages for 2009

The Magazine Publishers of America’s Publishers Information Bureau (PIB) reported on advertising pages for 2009. Pages were down 25.6% and revenues closed at $20Billion, which means a decline of 18.1%. The New York Times reported total magazine advertising pages were down over 58,500 pages when they compared 2008 page count to ad pages in magazines that were still published in 2009. Only 18 magazines enjoyed an increase of advertising pages.
The biggest decliners were financial, insurance and real estate ( down 41.4%) and automotive (down 40.5%). Estimated revenues were down in all categories except for food and food products, which posted a slight 1.4% gain.
PIB also noted that the advertising page reduction experienced in 2009 was so severe that many of the surviving publishers lost focus on their dependence for advertising revenues and, instead, began to concentrate on digital editions.
Fewer advertising pages translate into a decline in overall page count and thus less paper is consumed. If advertising in publications do not improve, difficult to forecast much advancement for publication paper demands.

Will 2010 be Better than 2009 for the Paper Industry?

The year, 2009, certainly created several challenges for the paper industry. Paper producers did a remarkable job of limiting price erosion despite sharply lower shipment volumes and variable (usually up) raw material costs. The industry responded with massive amounts of market downtime, as well as a significant amount of closures, in many cases even driving down inventories despite weak demand.

Although the last few months of 2009 illustrated some improvement; sustained improvement will only arrive once the economy improves. Keep in mind, 2009 paper demand continued to be lower than 2007 and the beginning of 2008.

The paper manufacturers continue to operate along a slippery rope – recently most grades experienced an announced price increase; meanwhile, demand continues to be below expectations, supply was controlled by down time (this is not sustainable ), input costs such as chemical, energy, and transportation are forecast to increase, and the infamous black liquor credit (worth billions of dollars) is gone.

I think we all agree that for the industry to be healthy, long term, a price increase is needed; however, most buyers are aggressively pushing back due to the inability to pass it on to their customers.

Of particular note is the containerboard price increase – without consumers buying 'stuff' – nothing to go into the box – therefore demand is forecast to be depressed. The other two markets sharing concern are the price increase for publication and newspaper papers. Both are hurting from lack of subscribers and depressed advertising.

Anyone of our Coy Paper Company News on the Pulp and Paper readers care to comment on forecasting 2010 prices, demand, and supply; also, venture an opinion on next mills to close?

Two of the Biggest Publishers to Mutually Buy Paper

Two of America's largest magazine publishers, Time Inc. and Meredith, have reportedly joined forces to buy paper. The two companies issued joint requests for proposals to potential paper suppliers late last year, according to several sources.
Together, the two consume several hundred thousand tons of paper, annually.

Time is a major buyer of lightweight coated (LWC - 29lbs to 32lbs ) for offset printing. Meredith's is more geared to rotogravure papers and higher basis weights. This will introduce added pressure for pricing on an already depressed market.

US Department of Commerce Delays Anti-Dumping Decision

Department of Commerce announced it will delay the decision on the countervailing duties against Chinese and Indonesian paper producers until February 22nd. The Department must determine if the imports from the two countries caused injury to USA paper producers and originally reported the decision would be made by mid December.

Recent Happenings on Publications

-Penton Media has ceased publication of the print editions of American Machinist and Welding Design & Fabrication
-Consumer business and finance magazines had a rough go in 2009. Collectively, the titles tracked by PIB saw advertising pages fall nearly 30 percent.
-Reed Business Information has ceased publication of three trade titles: Video Business, Manufacturing Business Technology, and Industrial Distribution.

China’s Yueyang Paper Machines start up

Following up on the Coy Paper earlier releases, in August, Yueyang started up #10PM and in October #9 PM started up. Both continue to run trials and reports outline the paper looks fine. Both have a capacity of 200,000TPA each of uncoated paper. #10PM will focus on recycled business and offset papers while #9 will supply the same papers from virgin fiber. The plan is for #10PM to eventually produce papers from 100% deinked pulp (most of the raw stock coming from USA).
In 2008 China produced 79.8Million tons of paper and paperboard – an increase of nearly 13% annually since 2000. Of this production, China consumed 13.85Million uncoated printing and writing tons in 2008 and produced 14Million tons.
At 400,000TPA of new capacity, the Chinese must have America in their scope for exporting paper.

Race is on for Digital versus Print

Forrester Research has just revised up its May 2009 forecast of this year’s U.S. eReader sales to 3 million units from 2 million, due to strong sales in November and December. Moreover, it now expects sales of another 6 million units in 2010.

Top 10 In-plant printers in USA

2009 Top 10 plants in USA by revenue include
US Government
Allstate Insurance
State of California
State of Washington
CVS/Caremark
Ohio State University
Spartan Stores
University of Oklahoma
Louisiana State University
University of Washington

Glatfelter buys Concert Industries

Glatfelter agreed to acquire the nonwoven producer Concert Industries Corporation from Brookfield Asset Management Inc. for $235Million, expanding the specialty paper company's markets, especially in developing markets beyond the USA. Concert is one of the world's leading producers of highly absorbent and customized airlaid. The airlaid line is one of the best options in the marketplace in terms of high absorbency. The company's unique production process allows products to absorb more moisture than common cellulose, yet it is lighter, more durable and cost competitive, especially when compared to similar weight non-wovens.
Concert Industries has operations in Canada and Germany with a total
capacity of 84K tons.

Print Volume up Slightly in Third Quarter

Dr Webb recently published a report on the printing industry. A few highlights-
"The third quarter of 2009 continued a positive turnaround from a disastrous Q1,” said Dr. Webb. “The industry has had significant declines in volume for the last year, and has cut back staffing levels at a slightly faster rate than those sales declines. It may now be finding the right balance of productive capabilities, declining shipments, and price pressures of electronic media.”
In the report, Dr. Webb reviews the latest trends in shipments, profits, and capacity measures for the industry. He also discusses how it is likely that in the next six months the recession will probably be declared as over. “It is likely that the fourth quarter of 2009 will be identified as the recession's end."

Folio Profiles 2009 Magazine Industry

Coy Paper has reported on all the challenges last year for the paper markets. 2009 certainly proved to be a challenge for anyone associated with the publishing world. The year outlined economic fallout, bankruptcies, dwindling advertising dollars, shuttered magazines, layoffs, pay cuts to name a few. Folio reports on the industry as 2009 unwinded
2009 profile on the magazine industry world link Click on link

Leader in E-reader Display Manufacturing Owned by Paper Company

Excepts from recent RISI research paper.
Prime View International (PVI) is the leader (66% market share) in supplying displays used in e-readers such as Amazon.com’s Kindle, Sony’s Reader and Barnes & Noble’s Nook. PVI is owned by Taiwan’s largest paper manufacturer, Yuen Foong Yu, which launched this technology division 17 years ago, as they became worried about digital replacing print. After facing tough competition in the LCD market, they’ve spent over a $1Billion on e-screen development and acquisitions, purchasing screen technology from Philips Electronics in 2005 and E Ink Corp. of MA last June. Worldwide sales of e-readers are expected to soar to 12 million units in 2010, up from 5 million in 2009. Many of these will be made by competitors, able to show video with full color screens such as Apple’s Tablet and Qualcomm’s new screen technology called Mirasol.

AF&PA and NPTA Merge for One Meeting

The American Forest & Paper Association (AF&PA) and the NPTA are joining forces to host a combined conference March 21-23, 2010 in New York City, called PAPER2010.
Also know as 'paper week'.
The AF&PA is the national trade association of the forest products industry, representing pulp, paper, and wood products manufacturers, and forest landowners. The NPTA Alliance (formerly the National Paper Trade Association, Inc.) is the association for the $60Billion paper, packaging and supplies distribution industry.

Reader’s Digest to Launch Three New Health Magazines

Reader’s Digest plans to launch three new magazines called Reverse Diabetes, Walk it Off, and No Fail Weight Loss All three will be sold as part of a single-sponsored package in the health sector. The magazines will be published 4 times a year.

International Paper Shutters a Paper Machine

As Coy Paper recently announced, International Paper just closed its uncoated freesheet (business papers) paper machine #1 in Franklin, VA. This past Fall, the company announced that they would close the mill to reduce production capacity. In November, company stopped production on its # 6 paper machine.

Conde Nast Considers a New Magazine

Finally, some good news for the ailing magazine industry. Recall, we reported on Conde Nast having to close six consumer magazines, including Gourmet; reduced costs 25%; and making several reductions in their workforce – have announced they are working on a trade magazine for the men's' fashion market. This new title may be marketed as a trade publication and not a consumer magazine.

Reed to Close Publications

Reed Business Information has been marketing the sale of the USA magazine group and has yet to confirm a buyer for the complete division. The current decisions are to close several publications, or sell them individually – or begin to lay staff off.