Current News on the Pulp and Paper Industry

Thursday, February 19, 2009

Catalyst Continues Down Time

We covered Catalyst Paper taking down time in our November releases, and management continues to match output with demand. Curtailments at both Crofton and Elf Falls mills in BC as well as in Snowflake, AZ remain. This announcement will result in additional 55,000 tons of newsprint taken out of production.

Georgia Pacific Shuts Down Machine

Georgia Pacific plans to shut down the #3 medium machine (268,000TPA – semi-chemical medium) at the Cedar Springs, GA containerboard mill.

Store Enso Announces closing several assets

StoraEnso has closed the Baienfurt folding boxboard plant (190,000TPA) and a publication paper machine (#3pm – 140,000TPA) at its Kabel plant – both in Germany.

Wednesday, February 18, 2009

Fraser Plans Downtime at Edmundston Mill 

Fraser Papers announced plans to take market-related downtime at its pulp mill in Edmundston, New Brunswick. The two-week closure will begin February 23, 2009. The Edmundston pulp mill produces sulphite and groundwood pulp for Fraser’s integrated paper mill in Madawaska, Maine.

AbitibiBowater Closes Grand Falls-Windsor Mill 

AbitibiBowater has ceased production at its newsprint mill in central Newfoundland. The closure resulted in the elimination of 800 workers. AbitibiBowater announced that it would close the 205,000 metric ton newsprint mill as part of an overall plan to remove 830,000 metric tons from the marketplace.

Thursday, February 12, 2009

Catalog Postal Rates Rise 2.3%, Periodicals rise 4%

The U.S. Postal Service released details yesterday of the next rate increase, which will take affect May 11. The postal rate for Standard Mail Flats (catalogs) will increase by 2.3%, while the average rate hike for carrier route flats is 4.3%. The postal rate for periodicals will increase 3.976%, which is more than any other class of mail. The Consumer Price Index (CPI), which is currently 3.8%, now caps postal rate increases. This year’s increase for catalogs is higher than last year’s 1%, but significantly lower than the 20%-40% rate increase in 2007.
The USPS is facing a $2.8billion deficit and total mail volume was down 9 billion in 2008.

Finnish Paper Mill Lays Off 1200 Workers

The world's largest magazine paper maker, UPM-Kymmene Corp., reported it will temporarily lay off 1,220 workers in Finland, as the economic downturn continues to hit the wood and paper industry.
The announcement follows UPM's earnings report last week confirming a fourth-quarter net loss of euro286 million ($267 million) and an 8 percent drop in sales to euro2.3 billion.
The company gave a grim outlook for the rest of the year, saying it will continue to close mills and curtail production, expecting poor demand to continue in 2009.
Last year, UPM closed mills in Finland and slashed 700 jobs. It also announced plans to cut thousands of jobs worldwide during the next few years.

Wednesday, February 11, 2009

Coy Paper Company Introduces new Website

The specialty paper company, Coy Paper Company LLC, recently introduced a completely revised website, www.coypaper.com . The site describes the company, featured and proprietary grades, as well as a section on industry resources, which include the popular Paper News. Paper News allows readers to stay up to date on many for the recent events occurring in the Pulp and Paper Industry.

Paper Machine Sets New Speed Record

Stora Enso’s Kvarnsveden mill in Sweden has set a new world speed record of Super Calendar paper production. The Metso supplied machine (PM12) set a new 24-hour record of 1,926 m/min on January 21. A top speed of 2,009 m/min was reached during the period. Kvarnsveden’s PM 12 was started up in November 2005. It is the largest production line in the world.

Cereal Boxes Shrink

The Kellogg Company is testing smaller boxes for its cereals. The new ‘space saving box’ allows for the same amount of cereal, but with 8% less packaging, this permits retailers more shelf space, consumers more room in the pantry, as well as less waste and less material means less cost to Kellogg. This is first change to the cereal box since the 1950”s. This translates into less packaging
and paper for Kellogg Company.

Monday, February 09, 2009

Katahdin Paper Mill to Take Downtime

Katahdin Paper temporarily shut down PM5 at its East Millinocket, ME mill. The 125,000TPA directory paper machine could be idled for as many as 28 days. The closure will affect approximately 140 hourly-paid workers and an unspecified number of salaried workers. The East Millinocket mill employs roughly 491 workers and is owned by Brookfield Asset Management, but is managed by Fraser Papers.

Largest InPlants

With the advent of digital printing, many universities, municipalities, and corporations have brought printing ‘inside’ rather than work with an outside printer. InPlant Graphics recently confirmed top 100 installations with printing presses ‘in plant’.
We include top 10-
USA Government Printing Office
Allstate Insurance
State of California
CVS/Caremark
State of Oregon
Stte of Washington
Principal Financial
Blue Cross/Minn
People to People
Spartan Stores

What’s Black & White and Red all over?

Newspaper’s bottom line!
2008 was not a pleasant year for newspaper companies (or paper manufactures that produce newsprint). Canada has always been the world leader in newsprint production….. and the USA #1 in consumption.
Some 2008 North American statistics-
Production 10,100,000 tons
Capacity 11,425,000 tons
Permanently shuttered in 2008 600,000 tons
Top mills
AbitibiBowater 4,775,000TPA 42% market share
White Birch 2,100,000 TPA 18.5% market share
Kruger 1,140,000 TPA 10% market share
Catalyst 890,000TPA 8% market share
North Pacific Paper (NORPAC) 55,000 TPA 5% market share

Thursday, February 05, 2009

National Envelope to Close Plant

National Envelope just announced it will discontinue all operations at the Houston, TX facility effective April 6, 2009 and consolidate this facility into the Ennis, TX. plant. They will continue to operate five plants - Ennis, Tx., Lenexa, KS., Austell, GA., Smyrna, GA., and Nashville, TN.

Tuesday, February 03, 2009

Wall Street Analyst Surveys ‘The Street’

Mark Wilde of Deutsche Bank surveyed paper & packaging industry executives, highlights of his findings -

Main message for 2009 - ‘Volumes & Prices Will Be Lower'
For most participants, flat volumes look like the "best case" scenario. Low expectations prevailed across the industry – from timber to paper to packaging. The expectations of lower prices and weaker volumes were most pronounced in market pulp and newsprint. Most observers assumed a bottom somewhere around mid-2009. With economic news continuing to point to a deep slowdown, the case for a mid-year turnaround on most commodities is becoming tougher to envision.

Executives report on big issues in 2009-
1) Slumping demand,
2) Price erosion.
About 80% of respondents pointed to cost pressures as a key issue. A bit further down the “issues list” was the resurgent US Dollar. Several also did raise concerns about the credit worthiness of both customers and suppliers.

Finally, Wilde asked, what is required for turn around for Healthy Industry?”
"A miracle" replied one quick-witted executive. Responses focused on further industry consolidation with accompanying rationalization of marginal capacity. Many respondents argued for a greater focus on financial returns. One European player argued: "Euro needs to weaken against the US Dollar and other major currencies." Many companies tied to lumber and building materials pointed to a rebound in the housing market.

NYTimes Profits Decline

The New York Times Co. reported its fourth-quarter earnings from continuing operations fell 48 percent on write-downs on severance costs and non-cash charges on the value of the International Herald Tribune and New England papers, including its stake in the free Boston Metro daily.

Top Printers Winning bids to GPO

The USA Government Print Management revealed the following list of top printers awarded contacts during 2008.

Monarch Litho $38,100,000
NPC $35,660,000
RRDonnelly $27,475,000
Gateway Press $16,999,000
SourceLink $14,915,000
Cenvo $10,225,000
Vertis Communications $9,616,000
Signature Graphics $8,75,000

PaperBoard Output Declines 19%

U.S paper and board production declined 18.9% in December on a year-over-year basis, a decrease of nearly 1.5 million tons, according to the American Forest & Paper Association (AF&PA). Coated printing and writing paper alone plunged 29% for the month. Kraft linerboard production was down 30% in December to 1.22 million tons compared to December 2007. Uncoated freesheet and tissue production were much less harder hit, declining 13% and 4% respectively

Friday, January 30, 2009

Printing and Writing Paper Shipments Decline

Total North American printing and writing paper shipments dropped 21.6% in December to 1.675 million tons, according to the Pulp and Paper Products Council (PPPC). Total N.A. shipments for all of 2008 were down 8.7% at 24.14 million tonnes. Coated mechanical shipments declined 3.9% in December to 280,000 tonnes, and fell 16.3% to 4.18 million tonnes for the full year. Coated freesheet shipments dropped 28.0% to 263,000 tonnes and were down 9.2% to 4.15 million tonnes in the 12-month period.