UNCOATED FREE SHEET UPDATE

Most of September's offset hikes which Paper.com has confirmed have stuck. All the major paper producers, including Domtar, International Paper and Boise Cascade, introduced an increase on offset roll prices by $60/ton and offset folio sheets prices by $30/ton in mid September. While demand has been steady, supply reductions are keeping the market in reasonable balance.
Paper.com, a major source of supply for printing and writing grades, was experienced an increase on the majority of its commodity grade offerings.

Leading Online Paper Marketer Introduces New Site

Paper.com, one of the leading online marketers of paper products recently
released an all new website to allow for a more efficient website. The company exclusively markets over the web. Paper.com has 46 warehouses though out the USA representing over 40,000 paper items from all the major paper producers. The company was founded by John Engel, an internet marketing expert, and P. Scott Vallely, a paper industry executive, to produce the industry’s largest web site. Paper.com focuses on office, stationery, school, scrapbook, Artist, and theme papers. The company boosts of over 7000 visitors every day.

New Environmentally Friendly Digital Sheet Introduced

Galerie Art Digital is new digital grade from Paper.com and produced by the M-Real Paper mill. It is fairly new and is promoted as a very 'Green " sheet, made from recycled fibers.
M-real paper mill recently launching two new products in the Data Papers range of office papers at the Paperworld show in Frankfurt. Data Color Inkjet Photo Gloss, Digital, and Data Color Inkjet Photo Matt hit the market and offer customers a wider choice in a market where new technologies and particularly increased use of color applications put ever greater demands on high quality paper products. Available in text and cover weights from Paper.com.

Paper.com introduces new Environmentally Friendly Grade

Domtar EarthChoice Office Paper is an FSC-certified multifunction grade that offers guaranteed performance on high-speed copiers, laser printers, and inkjet printers and offset presses. The 92 GE brightness and FSC certification make it an ideal choice for customers who want to practice environmental responsibility on an everyday basis. It is acid-free for longer archival life. The grade is suitable for Copier, inkjet and laser and digital printers and is ideal for everyday desktop copying and printing.
Paper.com recently added this grade to its extensive line of environmentally friendly grade offerings.

MARKET PULP UPDATE

It's turning out to be a favorable pulp cycle. The pulp rally shows no signs of slowing down. The market saw a $20/ton price hike initiative on NBSK for September. Moreover, the prices of most hardwood grades rose $20- 25/ton in August, and with the market remaining tight, several producers have announced a $20-30 increase for October. The steep drop in the US dollar in recent weeksiwill provide the fuel for further attempts to boost prices. Despite the highest prices in over a decade, a strong Canadian dollar for high chip costs are squeezing Canadian mills.

Pulp continues to Climb

Parsons & Whittemore, Sappi Fine Paper North America and most other producers have informed customers that they will initiate a $20/metric ton price increase on northern bleached hardwood Kraft (NBHK) pulp shipped after October 1, boosting the industry’s list to $765. Fraser Paper started the price hikes last week. Transaction prices for NBHK have risen from $610/metric ton in January to $730, according to monthly surveys of buyers by Purchasingdata.com.
Parsons & Whittemore also plans a $20/metric ton price increase on southern bleached hardwood Kraft (SBHK) pulp in the U.S. to $750. The RISI.com subscription newsletter says SAPPI plans to raise prices $25/metric ton on three grades of NBHK pulp in North America. Its prices on aspen and mixed pulp now are slated at $750 and maple grade is at $760.
In addition to the SBHK and NBHK hikes, producers of bleached eucalyptus, birch, and hardwood-derived bleached pulp have came out with price increases.

Fraser Papers Announces Paper Machine Downtime

Fraser Papers Inc. announced that it would take market-related downtime on the No. 6 paper machine at its East Papers operations, effective October 6, 2007, to manage inventory levels of uncoated groundwood papers. The Company expects the temporary shutdown to be two weeks in duration, dependent on market conditions.

Kruger to curtail production at two Quebec mills

Reported by - Financial Mirror –
The global paper and forest product industry's six-year-long decline in credit quality has continued in 2007,
says Moody's Investors Service in an industry update. During the year, industry participants have faced tighter liquidity conditions, a worsening slowdown in US housing construction, and, for producers in Canada, Brazil, and Chile, the negative effects of a strengthening in their national currencies.
Overall, Moody's expects the slide in credit quality to continue, particularly for North American and European based companies.
Positive rating pressure, however, is expected for the market pulp and packaging segments as prices remain strong.

Kruger to curtail production at two Quebec mills

Kruger Inc. announced that it will reduce the production at two of its Quebec paper mills. These production curtailments will be achieved by the shutdown of the Trois-Rivières mill, from October 28 to November 10 and the Brompton (Sherbrooke) mill from
November 17 to December 1st. Total production reductions during these periods will amount to 25,000 metric tones of newsprint, 6,000 metric tons of supercalendered paper and 8,000 metric tons of coated paper.
These interruptions will affect 1,500 employees and result from the combined effects of the increase in value of the Canadian dollar and the continued increase in production costs, including manpower, fiber supplies and energy.

Boise Launches Reinvented Imaging Papers Lines

Boise Paper recently announced a complete rebranding launch for four of its primary lines of paper. This aggressive and strategic rebranding effort creates distinct market-driven personalities for each of the different lines, positioning Boise Paper as a true leader in the premium and specialty papers market. These distinct brand personalities are driven by a combination of new packaging, a sharp focus on new customer demographics and in some cases, an expanded and enhanced paper offering.
The four lines that Boise will be rolling out with new branding include: Boise ASPEN, Boise's premium line of recycled papers that work for you and the environment; Boise FIREWORX, a category-changing, vibrant color line that offers Paper With Pop; Boise HD:P High-Definition Paper for high-end digital color printing needs; and Boise X-9, the tested, proven, top-selling multi-use paper formulated for premium performance in printers, copiers and fax machines.
"Boise Paper is committed to being a leader in premium and specialty papers," said Vince Phelan, marketing director, Boise Paper. "This broad rebranding effort is a great example of how Boise Paper continues to deliver "Beyond What's Expected" to our current and prospective customers. We are making bold changes to deliver bold results that add value to our customers and invite new customers to be a part of our Boise brands. These new brands are the fruits of hours of research and trials to better connect our product offering to our customers current and future paper needs."
The rebranding launch for each line of paper will occur through the end of 2007 and into the first quarter of 2008. Below are brief overviews of how each individual paper line will be rebranded:
Boise ASPEN -- This is Boise's best-in-class line of premium recycled papers that further reinforce Boise's standing as the leading manufacturer of recycled papers. Offering an impressive breadth of line, Boise ASPEN papers provide customers with high brightness and performance that customers expect from non-recycled sheets and support any company's green initiative. Boise ASPEN offerings will now include Boise ASPEN 30, Boise ASPEN 50, Boise ASPEN 100 Multi-use, Boise ASPEN Laser (Presentation Laser 30%), Boise ASPEN Color Copy, Boise ASPEN Offset & Sheet Grades, and Boise ASPEN Forms & Envelope grades. As part of the rebranding efforts for Boise ASPEN, Boise will introduce new packaging, further reinforcing the recycling and environmental elements of the paper.
Boise FIREWORX -- This is Boise's brand new line of color papers. Under the Boise FIREWORX line, Boise offers customers with 27 distinct and vibrant color offerings, great for all printing needs. Bringing fun and function together, Boise FIREWORX is a lifestyle colored paper that adds vibrancy to creative projects and attention-getting communications at home and in the workplace. From Bottle Rocket Blue to Firecracker Fuchsia, Boise FIREWORX is truly a Paper With Pop.
Boise HD:P -- This is Boise's new family of high-definition digital papers that is ideal for delivering professional-looking, colorful print projects. Providing smooth texture, crisp edges and vibrant colors, Boise HD:P papers take digitally printed documents to the next level. The entire line of Boise HD:P High-Definition Paper is laser and/or inkjet guaranteed, acid-free and carries a GE brightness rating ranging from 92-98 in a wide variety of weights and sizes to meet today's digital printing needs. The lineup includes Boise HD: P Everyday Laser, Boise HD: P Premier Print, Boise HD:P Presentation Laser & Cover, Boise HD:P Color Copy & Cover and Boise HD:P Glossy Color Laser & Cover.
Boise X-9 -- This is Boise's #1 selling multi-purpose paper. Used by businesses of all types and sizes for their everyday imaging needs, Boise X-9 delivers consistent results for a myriad of printing and copying equipment. Boise X-9 offers excellent run-ability that is third-party tested, and is a great option for high-output business needs. Boise X-9 now features a fresh new look that is familiar to the loyal user, yet conveys a more energetic feel with easy-to-view product information for those new to the brand.
Come to Paper.com for the entire product offering of Boise. Paper.com has every major paper producers' items in stock and ready for immediate delivery.
SOURCE: Boise Paper

Legion Paper Goes Green

New York - Legion Paper, the leading supplier of fine art paper in North America, launches a comprehensive eco-friendly paper classification system as part of their website, www.legionpaper.com. This new tool is the first of its kind within the paper industry to provide a powerful 'green' search engine. The company has partnered with Paper.com to also offer all these environmentally friendly products.
"We have a very different take on green than most paper companies," says Joshua Levine, CEO Legion Paper. "The majority of the papers we supply contain an eco-friendly story so we developed a system to highlight these green characteristics, which has turned into a valuable educational tool."
Most of the 'green' discussion in relation to the paper industry has focused on wood-based and/or recycled products. This leaves out many important products including 100% cotton papers, papers made from cork, mulberry, and handmade papers -- all of which do not require the cutting down of trees in the first place. The new Legion Paper eco-friendly website organizes each paper into five categories: Alternative Energy, Chlorine-Free, Handmade Papers, Mill Certification and Tree-Free.
"Many of our customers rely on legionpaper.com for their projects and we are continually asked about the specific 'green' qualities of our papers," added Levine. "With our new "green" interface, we are able to offer this extraordinary search tool so anyone can easily find all the eco-friendly characteristics of our papers instantly."
The new Legion green site was developed in direct response to customer demand with online traffic to legionpaper.com substantially and consistently increasing over the past 24 months. Legion Paper prides itself on outstanding customer service and this new online feature demonstrates their commitment to outstanding service and education. Additionally, Legion's digital imaging division, Moab by Legion Paper, runs on 100% wind energy and is located in the heart of the west's national parks system where there is an emphasis on living green.
Paper.com is a large reseller of all the Legion products. The Paper.com web site now has a “Green Store” for easy shopping.
SOURCE: Legion Paper

NewPage / Cerberus Acquires StoraEnso USA mills

Stora Enso, one of the world's largest makers of paper products, is selling its North American paper manufacturing units for about $2.1 billion to an Ohio-based company, New Page, owned by the private equity firm Cerberus Capital.

The operations being sold include eight factories and will be combined with those of Cerberus-owned NewPage Holding, based in Dayton, Ohio, a North American coated paper producer employing more than 4,300 people.

The mills being sold were once part of Consolidated Papers, which was acquired by Stora Enso in a $4.8 billion deal in 2000.

Six of the mills are in Wisconsin, one is in Duluth, Minn., and the eighth is Port Hawkesbury, Nova Scotia, Canada.
Paper.com carries all the New Page paper products and many of the Stora Enso grades in stock and ready for immediate shipment.

Price Increase Summary

Paper.com is beginning to hear from all our major paper mills regarding several price increases.
As the specifics of each mill are confirmed, we will update our data.
Price increase summary as follows
Text/Cover/Writing increase of 4-7%
Coated increase of 5-7%
Uncoated offset and Opaque increase of 3-5%
Carbonless increase of 5%
Envelopes increase of 9-11%
Most are effective late September or early October. Paper.com still is marketing most items at currrent prices, management
will hold these prices firm as long as possible.

Ad Spending Declines 0.3% in First Half of 2007

Total U.S. advertising expenditures fell 0.3% to $72.5 billion in the first half of 2007, according to TNS Media Intelligence. It is the first time since 2001 that ad spending declined for two consecutive quarters. Nearly all media categories were weak, with the exception of Internet and magazines, which rose 17.7% and 4.6%, respectively. Newspapers were among the hardest hit, with the category falling 5.8%.

FOEX NBSK Pulp Index Climbs

FOEX, a provider of audited, trade-registered pulp and paper indexes, said the PIX northern bleached softwood kraft (NBSK) pulp index climbed $7.79/mton to $807.79 in the week ending Sept. 11. It was the first time in four weeks that the index saw movement. The price of lightweight coated (LWC) paper fell euro 0.19/mton to euro 670.73/mton and coated woodfree fell euro 4.85/mton to euro 704.98/mton.

Monthly U.S. Printing Shipments Increased in July

U.S. printing shipments increased $138 million in July compared to the same month last year, the WhatTheyThink Economics and Research Center reported. According to the latest report, the average monthly increase in printing shipments has been $196 million since last August. Adjusted for inflation, however, shipments in July of this year were actually down by –0.6% from last year. Year-to-date shipments are down –0.9% on an adjusted basis.

EKSuccess grows through recent acquisition

GTCR Golder Rauner, LLC, one of the nation’s leading private equity firms, announced today that EK Success, a leading provider of scrapbooking and paper-based crafts products, has acquired Wilton Industries, Inc. and Dimensions Holdings, LLC. EK Success is a creative consumer products company with a major market position in the scrapbooking segment of the $30 billion U.S. craft industry. EK Success was acquired by GTCR in February 2006. The combined companies will be named Wilton Products, Inc. and be headquartered in Woodridge, Illinois.

EK Success is a creative consumer products company with the leading market position in the fast- growing $3.0 billion scrapbooking segment of the U.S. craft industry. EK Success designs and markets some of the craft industry’s most respected brands of stickers, multi-dimensional embellishments, punches and writing utensils for use in scrapbooking and related paper crafts, such as card making and invitation creation. These include ZIG® Memory System®, Sticko®, Paper Shapers®, Jolee’s Boutique®, HERMA® and Cutter Bee®.
Paper.com markets all of the EKSuccess products and is one of the largest online marketers of scrapbook and craft papers.

New Announced Mill in Vietnam in trouble

After several years of construction, the Thanh Hoa Pulp and Paper mill in Vietnam is suddenly short of funds to complete the project.
The mill was originally anticipated to go on stream in 2005; the mill was expected to produce 50,000 tons of pulp and 60,000 tons of paper per year, with products to include cartons, duplex paper and packaging paper. At the end of the second stage, total production capacity would increase to an estimated 150,000 tons of pulp and 150,000 tons of paper per year.

Boise Cascade Paper Mills may be Sold

Boise Cascade in considering selling its paper, packaging and newsprint divisions for $1.63billion to Aldabra 2 Acquisition. Aldabra was formed by Nathan Leight and Jason Weiss of Terrapin Partners. They agreed to pay $1.34billion cash and the balance in shares. The company would be run by Alexander Toeldte – Boise’s current Executive Vice President.
In 2004, Madison Dearborn acquired Boise and split the corporation into manufacturing and retail (OfficeMax). Madison Dearborn has no immediate plans of spinning off the retain division nor the wood and building product divisions.

MARKET PULP Update

The strength in market pulp prices shows no signs of abating. The prices of most hardwood grades rose $20-25/ton in August, and there is yet another $20/mton price hike initiative on NBSK for September. Production curtailments caused by the woodland workers strike in BC is helping to keep the market tight. Despite the high prices, the strong Canadian Dollar and high wood chip costs are keeping margins barely positive at a number of mills.