Thursday, January 03, 2008

Recycled Paper Fact

EPA just reported that one ton of recycled paper stock can save up to 4000 kilowatt hours and 17 mature trees. The Paper.com website introduced a ‘green’ store to support all the Environmentally Friendly papers.

Monday, December 31, 2007

PULP & PAPER

As reported by Paperage magazine
Pulp production is being fueled by export containerboard volumes and also by export pulp demand created by the weak U.S. dollar. Prices are also being pushed by Canadian and Brazilian costs of production and higher prices for domestic fiber created by fewer operating sawmills generating wood chips. Additional softwood and eucalyptus pulp capacities coming online in South America and recycled containerboard capacity in China could disrupt the steady pace of price increases seen this year. U.S. producers should still have one good year left in 2008, but it will be a draw for Canadian pulp exporters.

Paper demand in North America is saturated and will continue to be negatively influenced by the move to electronic advertising and a lower level of economic activity. Supply curtailments by International Paper at Bastrop, LA and Pensacola, FL and by Domtar at Woodland, ME, Port Edwards, WI, and Gatineau, QC may buttress domestic uncoated freesheet prices and even provide an opportunity for appreciation, but the grade will still lose some volumes to lower priced uncoated mechanical products made by AbitibiBowater and supercalendered grades which will be made by NewPage. Coated freesheet made by the latter has also been losing market share, and in a slowing economy this decline in demand will dominate prices, despite the fall in imports due to the weak U.S. dollar. The deciding profitability factor for North American paper producers will be cost reduction that can still be wrung from high cost capacity.

Paper Price Forecast for 2008

Because so many Canadian mills and several USA mills have shuttered production facilities and raw materials continue upward cost pressure; paper prices are forecasted to increase. Coated paper in particular is forecasted to increase 15% in first quarter 2008 and another 15% by midyear. Copy paper and papers for desktop printers will increase 10% in 2008. Printers will feel the additional cost increase from inks, forecasted to increase @10% in 2008. Paper.com continually attempts to offer paper at competitive prices, but producers often forced the site to increase prices.

Quick Snap Shot of Major Paper Markets

The uncoated freesheet paper market continued its downward track through 2007 as USA shipments dropped 6% from 2006. Electronic storage, raising postage costs, and automatic invoice payments, even proxy statements now sent electronically were all sited for reduction. The industry has answered the contraction in demand with a corresponding curtailment in supply (see Paper.com News Release on Paper Industry Blog at www.paper.com) Most recent reductions came from International Paper and Georgia Pacific – these two combined removed 700,000 tons. As a result, manufacturers were able to introduce price increases throughout 2007. Demand is expected to continue to decline – experts believe 1.5-2% decrease in 2008.
Coated magazine papers (Groundwood containing) experienced tight supply/demand conditions and lead times were the longest witnessed in several years. Like uncoated papers, the coated producers shuttered equipment – removing some 750,000 tons from the market.
The future is a little uncertain in that China and Japan have announced new equipment coming on line – 4 new machines in Japan and 2 in China. These 6 to start coming on line as early as 2009.
Coated Freesheet not quite as snug as the Groundwood coated market. Producers saw a market demand for product decline 6%.
Newsprint – the paper used for newspapers continues to decline at an increasing speed. Demand forecasted to be down 11% for 2007. This, mainly due to fewer readers – cannibalized by electronic communication.

Printing Impressions announces top Printers for 2007

Top 5 Book Printers
-Quebecor World
-Visant
-Courier Corp.
-Bertelsmann Arvato
-Taylor Publishing

Top 5 Publication Printers
-Quebecor World
-Quad/Graphics
-Brown Printing
-Publishers Press
-The Sheridan Group

Top 5 Catalog Printers
-Quebecor World
-Quad/Graphics
-Arandell Corp
-Consolidated Graphics
-The Sheridan Group

Top 5 Direct mail Printers
-Valassis
-Visant
-IWCO Direct
-Quebecor World
-Clondalkin Group

Environmentally Friendly Papers continue to be Popular

2007 was the year for tremendous push for environmentally friendly papers and FSC Certification. The THINK GREEN campaign continues. The website, Paper.com, established an entire store within its site strictly for Environmentally friendly papers. Some recent manufactures that were added to the website’s list of ‘green papers include, Newpage’s Sterling Ultra for digital and coated applications; Smart Paper’s 100 percent post consumer, FSC, Genesis paper; Galerie Art – the only 100% post consumer paper designed specifically for Digital application; all the Mohawk Papers – produced from wind power; and, all the new Wausau Paper recycled grades.

2007 Major Mergers and Acquisitions in the Printing Industry

Valassis acquired ADVO ($1.2Bilion)
-M&F purchases John Harland ($1.7bilion)
-Cenveo buys Cadmus Communications ($430million)
-Cenveo also buys ColorGraphics, Printegra, and Commercial Envelope
-RRDonnelly purchases Von Hoffmann ($412million)
-EarthColor bought L.P. Thebault
-Synergy Graphics acquired Sunny Industries
-Consolidated Graphics buys Pikes Peak and Cyril Scott

Papiers Gaspésia Sells Quebec Mill for $40 Million

Papiers Gaspésia has agreed to sell its Quebec mill and associated equipment to Vantek Inc. for US$40 million. Papiers Gaspésia is owned by Société générale de financement du Quebéc, Solidarity Fund QFL, Tembec and Investissement Québec. Vantek plans to sell the main equipment and remove the buildings. Liquidities generated from the deal will be invested in an economic development fund for new projects in the region.

Tuesday, December 18, 2007

Thoughts on Digital Printing

The Domtar Paper website shared many interesting points on digital printing we share in this Paper.com news release
What does digital mean? First of all, let’s clarify what we mean when we talk about digital printing. In the true sense of the word, it means every form of printing that uses digital technology. This includes everything from the laser and inkjet printers in your office to a full-length Xerox iGen3. And even Direct Imaging presses (Heidelberg DI) would fall into this category, as they produce plates on press using digital technology. To simplify: The main difference is that offset presses work in a moist ink-based environment, while digital printers work in a warm, toner-based one. Just think of the cozy warmth that evaporates from a sheet of paper when it first comes out of your laser printer. Digital papers versus digital papers No, this is no typo. Remember I mentioned that “digital” refers to any printer from your laser printer to high speed ones. In many cases, when mills call out papers as “digital,” all they are referring to is cut size sheets that work well in your laser and inkjet printers - 8.5 x 11”, 11 x 17”, you get my drift. We are purely talking size here, as your desktop printer is generally a very forgiving breed when it comes to surface and weight. High-speed digital presses, the ones you and I think of when we hear the term “digital,” are a very different kettle of fish.

Digital Color Production Presses Now we are talking! This is the technology that we think of when we hear the word “digital.” HP Indigo, Xerox iGen3 and Kodak NexPress, the most commonly used models, are also referred to as digital production presses. Hear the word “presses” in the terminology. They provide images in full color, high quality and run at much higher speeds (70-100 pages per minute) than your average desktop printer. Papers for these presses have to endure much more stress, having four colors applied to the sheet - often on both sides - and being chased by the high speed of the press. Truly digital papers Due to the enhanced stress placed on these substrates, mills have responded by designing papers that are precision cut, with a specially formulated surface to retain the toner (or inkjet ink) and increased moisture levels of four-to-five percent. This involves much more than just cutting an existing sheet to size. The development of a truly digital paper can take anywhere from six months to a year. “A driving force behind the growth in digital printing is targeted marketing,” says Mark Favus, group product manager, printing and publishing at Domtar. “But it is not just variable data printing that has taken off. Just think of amazon.com, who is now offering to print complete books on demand.” And for the everyday designer like you and me, the growing demand for shorter print runs has created an all- time high in new equipment placement, as well as encouraged printers that have offered digital printing for years to utilize their presses on more than one shift. And with the increased demand for digital printing, mills are responding with increased paper offerings. Coated versus uncoated As 80 percent of any printing done these days is done on coated sheets, you will also see a larger variety of coated papers available for digital presses. The formulas for coatings change from mill to mill, paper line to paper line, and some of these coatings have proven to be naturals when it comes to printing on digital presses. Coated papers are nice, but there are printed pieces whose design would be enhanced greatly if they were printed on uncoated stocks. Some of the presses mentioned already work with a limited variety of uncoated stocks. But, those that don’t require a special surface treatment. For example, uncoated sheets needed a special sapphire treatment in order to run on Indigo presses for years. This treatment was expensive and caused the paper to yellow within six months, which did not allow the paper to be stocked and, in turn, limited availability. Always up for a good challenge, “Domtar is working on the next generation of uncoated papers with a new surface treatment that is less expensive to apply and will not cause any yellowing,” promises Favus. It is not available on the market as I write this article, but keep your eyes open, it is only a matter of months

MARKET PULP UPDATE

As 2007 concludes, the pulp market ends with price increases, with a $25/ton increase to $875/ton for NBSK. This is largely a "supply' driven" increase with wood and energy costs driving the market. Additionally, both SBSK and Eucalyptus prices increased $30/mton in December to $840/mton and $805/mton, respectively. Hardwood is reportedly the
tightest portion of the market. Most experts believe the rally will likely continue into 2008.
Pulp chemical costs have also added pressures to the increases (mainly caustic soda and Sodium Chlorate).

Domtar Closing Paper Mill, Cutting Jobs, Curtailing Production

Ross Marowit of Canadian Press and remarks from industry experts.

Workers in Domtar Canada and U.S. paper mills were handed unwelcome news just days before the holidays, when management announced that 625 jobs will be lost next year to address reduced demand for uncoated freesheet paper.

The mill in Dryden, Ont., is being reorganized and the large No. 2 paper machine, which has been running at half capacity, will shut down Dec. 22. And the smaller No. 1 machine idled for two years will restart in mid-January for a net permanent production reduction of 155,000 tons.

The Port Edwards mill in Wisconsin will cease operation in the second quarter of 2008, cutting 165,000 tons of production.

The moves will remove 342,000 tons of production capacity as the Montreal-based company seeks to rebalance supply and transfer production to more efficient facilities.

CEO Raymond Royer said the measures were required to strengthen Domtar's position as the most efficient producer in North America.

''We need to pursue the consolidation of our production capacity to improve our competitiveness in the North American market, given continued unfavorable economic conditions and a softening of demand for fine papers,'' he said in a news release.

Some of the product lines manufactured in Port Edwards will gradually be transferred to other unnamed facilities without affecting customers, the company said.

Mark Bishop of RBC Capital Markets said the decision could help to boost prices and shield the company should the faltering U.S. economy slow further in 2008.

''The fundamentals are better now than they were before, so prices on a net basis will ultimately be better than they would be otherwise,'' he said from Vancouver.

The decision follows a similar announcement during the summer to reduce 284,000 tons of paper capacity.

''Combined with today's announcements, Domtar will have closed approximately five per cent of its North American uncoated freesheet capacity in 2007,'' Pierre Lacroix of Desjardins Securities wrote in a research note.

These decisions represents 2.8 per cent of North American freesheet capacity and eight per cent of the Domtar's freesheet capacity.

The decision was foreshadowed in September, when the company suggested that 425,000 tons of paper could be removed from the system next year.

Demand for uncoated freesheet grade has decreased by 5.5 per cent this year, and is expected to continue to decline by one to two per cent annually in the years to come, said Bishop.

A worsening market and economic situation could lead to additional closures, he added.

''I think there's likely more to come,'' he said, noting that Dryden has been an underperforming asset for a long time and could face an uncertain future if conditions worsen.

Rumors circulated for months that Domtar would close the facility. The company issued a news release last month to deny a report that Domtar was planning to announce the closure of the mill. Domtar spokesman Michel Rathier said the company hopes its decision will enhance the viability of the Dryden mill.

Domtar is the largest integrated producer of uncoated freesheet paper in North America after its merger with the fine paper assets of U.S.-based Weyerhaeuser.

Sunday, December 16, 2007

Newsprint producer shakeout continues

Newsprint is an uncoated paper that is defined as a grade produced with mechanical (groundwood) fiber and its primary end use is newspapers. The standard basis weight is mainly 30 lbs but weights also include 24 lbs through 35 lbs. Canada is the world leader in newsprint production and the USA is the world’s largest consumer. The bulk of USA newsprint going into daily newspapers. Demand for this grade continues its downward trend (decrease of 10.6% for 9 months 2007 vs. 2006). Many newsprint producers have shuttered equipment as a result.
Top North American Producers (per Pulp and Paper Week Council)
Company Capacity (000) %Market Share
AbitibiBowater 5,755 47.1%
White Birth 1,160 9.5%
Kruger 1155 9.5%
SP Newsprint 990 8.1%
NORPAC 730 6.0%
Catalyst 700 5.7%
Tembec 500 4.1%
Boise Cascade 425 3.5%
Alberta 300 2.5%
Howe Sound 220 1.8%
Total North America capacity 12,200 tons
Top ten producers – 98% of capacity (top 5 – 80%)

Release Liner for Labels has many Challenges

While the pressure sensitive Industry continues to grow, the threats for poor recylability continue. The 2006 worldwide label demand was nearly 40,000 million square meters spread out as North America 27.5%; South America 7.6%; Europe 31.9%; Asia 29.2% and rest of world 4.0%. The liner continues to be a large component of the cost to the label (@20-30%) and it continues to be focus of environmental sustainability – for lack of recyclable (also a wasteful ‘throw away’).

Domtar advocates Paper is here to Stay!

Domtar recently released a marketing piece outlining why paper is here to stay. Paper is portable, personal , permanent, and effective for marketing. Even in the age of electronics, many surveys confirm paper – power of the written word – is more effective than email and internet marketing. The Domtar promotion also confirms print can not be blocked or defaulted to spam; and has a greater degree of credibility. All important documents are printed – birth certificate, drivers license, graduation diploma, bank documents, etc. no waiting for images to upload, no logging on or hoping for a good connection, no scrolling, and easier on the eyes.
Domtar is the largest producer of uncoated papers in North America and second largest in world. Paper.com sells all the Domtar grades and endorses use of paper. Come to www.paper.com for all your paper needs.
Some additional comments from USPS-
67% of consumers feel mail is more personal than the internet
60% of consumers that read catalogs were influenced to go visit web site
-Catalog recipients purchased 28% more items than website counter parts

Neenah continues to go “green”

Neenah Paper has announced that six brands; Classic Crest, Classic Linen, Classic Laid, Classic Columns Classic Cotton, and Starwhite are now manufactured carbon neutral, reducing net greenhouse emissions associated with the paper making process. These grades are Green e-certified.
Paper.com aggressively markets all the Neenah Grades as well as many other text and cover as well as writing grades that are environmentally friendly. The website recently introduced an entire section exclusively for ‘green papers’.

Kruger idles SC capacity

Kruger, one of the largest suppliers of supercalendered paper (SC), plans to shutter almost 215,000 tons of SC capacity. This affects the Trois Riviers mill (150.000 tons) and the Wayagamack mill (65,000 tons). The management sited weak Canadian dollar and increased energy cost

Salaries and Paper still greatest costs to Printers

According to PIA/GATF approximately 70% of printer’s sales dollars are used to pay for wages and paper. Energy also was sited as a growing cost concern. The industry sited increases of nearly 5.5% for paper; 3.4% for wages – 9% for health benefits; and energy rose over 6.5%.

Overall Printer Sales Increase for 2007

Although Printers that define themselves primarily as digital printers saw growth of nearly 10% year to date (9.4% over 2006) all mediums also witnessed growth. Namely, Sheetfed 1%; Heatset web 3%; and those printers that are combination of sheetfed/web 1.75%. These figures as reported from a survey done by Heidelberg.

Wednesday, December 12, 2007

Smart Papers looks to Environmentally Friendly Process

U.S. papermaker SMART Papers announced it has achieved Forest Stewardship Council (FSC) certification for its entire Genesis brand of premium uncoated printing and packaging papers. The full FSC certification of Genesis adds to the company’s growing line of FSC-certified papers, including those with post-consumer waste (PCW). SMART Papers, the largest independent North American manufacturer and marketer of premium cast coated, matte coated and uncoated printing papers, also said it now makes a majority of the Genesis papers with 100 percent
post-consumer waste content (PCW).
Paper.com is a very large distributor of all the Smart Papers grades, they are available and ready for immediate shipment.

Cranes Announces Price Increase

Crane & Company announcing a price increase effective with orders shipping after January 2nd.
Crane 100% cotton products will increase 5.5% (Cranes Crest and Bond). No increase for Cranes 25% cotton nor any of the envelope items are planned at this time.
The recently introduced grade, Crane Lettra, will increase 10%. The reason for this current increase is higher energy, advanced health care costs for employees, and escalading cost for cotton fiber.
Paper.com is a very large distributor for Crane and Company products and can ship your order before the price increase if ordered any time the week of the 24th of December.