We often report on the financial conditions for the paper and pulp producers as well as printers, but the entire supply chain has been negatively effected. Poor demand from the printing community negatively effected the latest set of financials from global paper distributor giant PaperlinX. The merchant's sales for the six months to December 2009 fell across the board, with Australian, New Zealand, European and North American operations showing double digit declines; meanwhile, Asia did illustrate some positive results.
We reported earlier in the year, that PaperlinX was successful in the sale of their Tasmanian paper manufacturing operations to Nippon Paper; however, the company is still looking to sell its Burnie paper manufacturing plant, and, if no buyer is found it will close in June 2010.
For the first half of the 2009-10 financial year PaperlinX reported a loss of $175Million, the bulk of this coming from costs associated with its exit from paper manufacturing. The company recorded a 28% drop in group revenues to $2.7Billion, as well as a 24% drop in paper volumes, which the company attributed to its exit from paper manufacturing operations in Australia and the impact of weak markets.
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Clearly, the poor economy is effecting any producer or service provider in the paper market. The fact that PaperlinX is effected merely illustrates it is the entire world (with exception of Asia) that is tanking. Let's hope for a better 2010.
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