Smart still operating as Chapter 11

Smart Paper continues to operate under the protection of chapter 11. The company closed the Wisconsin plant but continues to make paper in Hamilton, Ohio. Wachovia Capital Finance and CIT are assisting with the financing. Paper.com has all of Smart's paper products including cast coat / Kromekote, matte coated, and uncoated text and cover - in stock and ready for immediate delivery.

Pulp Prices contiue to Increase

The pulp producers have once again announced a price increase for market pulp. The recent announcement of $30/ton will advance the list price of NBSK to $690/ton. The markets are expected to stay tight with the announced closure of the pulp mills at Bowater and Weyerhaeuser and also the recent closure at Georgia Pacific and Fraser.

Internationa Paper shutters another machine

International Paper announced it will shut down a coated paper mill in Courtland, AL. The facility produced 922,000 tons per year of coated free sheet.

Paper Industry Experts Forecast US Paper Capacity Decline

Although many sectors within the paper industry appear to be doing very well in today’s climate, must agree that long-term trends will continue a downward capacity.
-Downward capacity trend begin in 2001 with many mills announcing manufacturing equipment curtailments
-2005 overall capacity reductions estimated at a negative 760,000tons - representing 45 machines permanently removed.
note, almost 7million tons was taken out of production at some point during year.
-2005 capacity 99.5million tons
-2005 US Newsprint (used in newspapers) declined by 865,000 tons - 13% - total of 5.76million tons
-2005 US printing and writing gained 0.7% to nearly 26million tons
-Capacity forecast to decline nearly 600,000tons over next 2 years
-2005 mechanical (groundwood) capacity grew 8% to 2.25million tons - most of increase came from conversion from newsprint machines
-2005 Coated Mechanical (magazine paper) capacity rose to over 5million tons or 2.3% increase.
Capacity will decline with the recent announcement of 2 machines shutting own.
-2005 uncoated free sheet declined to 13.5million tons. This sector is predicted to continue declining capacity.
-Tissue paper and Kraft paper continue to witness declining capacity

Annual Paper Meeting Held in New York City

The American Forest and paper Association (AF&PA) held their annual meeting April 9-13; following observations-
-First time in since 1995 that total paper and pulp production has dipped below 100million tons of capacity.
Basic concerns of industry continue to be
-Global competition; limited capacity spending on equipment (aging technology); high energy and labor (benefit) costs; capacity rationalization; and demands for short-term results for shareholders.
-Coated and uncoated free sheet markets continue to be strong ..... for now.
-Many older mills have 'shut down' equipment and thus capacity has been reduced
-Many of the off shore producers have curtailed shipments to USA
-Demand appears good - although the long-term trend is declining 2% per year.
-The Premium Text and Cover markets continue to suffer
-Market demand has continued to decline 10% per year
-No forecast for demand to shift to neutral nor increase
-High manufacturing costs continue to plague this sector
-Newsprint suppliers are doing well
-Demand has NOT increased, however, large trend to converting equipment over to high bright or coated; accordingly,
Newsprint capacity is decreased
-Board capacity continues to decline
-Linerboard will continue to decline, as well as recycled linerboard with several closures
-Containerboard capacity is stable due to capacity outages AND efficiencies on operating machines
-Corrugating Medium capacity will continue decline (forecast is down 2% 2006)

Paper Industry remains Strong

Pulp & paper prices have rebounded very strongly in past several months. The biggest surprises have been in market pulp and uncoated white paper. Supply issues have driven market pulp prices up. The result has been stronger-than-expected
prices. Uncoated free sheet paper has been the real winner this year. After a miserable 2005, uncoated white paper
volumes have strengthened. Add in nearly 1.5MM tons of North American capacity reductions and the market has tightened sharply.

Coated Free Papers will Increase in Price

The major producers of coated free sheets have announced a price increase for the #3 level grades. The price will increase by $50.00 per ton ($2.50/cwt). The manufactures of these papers have enjoyed strong operating rates and industry experts believe this increase will go through.
Paper.com has several coated grades and dozens of items in stock and available for immediate shipment.

Choosing the Right Paper for Digital Printers

Paper manufacturers have allocated a lot of recent R&D to developing the very best papers for digital printers because of the growing demand. The right paper is critical for optimum performance. Growth in digital printing since 2003 is over 20% compounded annually. Almost every mill now offers several grades specifically designed with digital and laser printing in mind.
Xerox has always insisted that choosing the right paper for a digital job is not only directly related to the quality of the printed piece, but also to the productivity of the overall printing system.
Paper.com has hundreds of digital papers available from uncoated to cast coated, from lightweight to card stock, and from smooth to texture. The products are available for immediate shipment from a ream package to multitruck loads.

Smart Paper closes Wisconsin Mill

SMART Papers announced that it is permanently closing its Park Falls, Wisconsin, pulp and papermaking facilities, citing the high costs of energy, wood fiber, transportation and logistics together with market pricing for its commercial "opaque" printing papers. This mill was included when they purchased the printing and writing mills of Fraser.
Paper.com has all the Smart Paper products, in stock and ready for immediate shipment.

Meriturn and Dunn Purchase Valentine Mill

Meriturn Partners and Dunn Paper acquired the assets of the Valentine Paper Company in Louisiana. Valentine specializes in Machine Finished (MF) Papers and latex saturated papers. The two machines produce wallpaper base, diazo, masking and thermal base sheets. The acquisition compliments Dunn’s current manufacturing base of Machine Glazed (MG) papers such as flexible packaging, wet strength, grease resistant, and metalize base. Together Valentine and Dunn will produce over 140,000 of paper

White Birch to buy Masson Paper

White Birch Paper Company agreed to buy the 235,000tpy Masson Paper producer of newsprint in Canada. The acquisition will make White Birch the third largest newsprint producer in North America with 1.135 million tons of capacity. Other White Birch mills include Stadacona Mill, Soucy Mill, and Bear Island Mill.

North American Paper Market

The deepest restructuring in 25 years has been occurring in the North American Paper market. In 2005 an estimated 9% of capacity was permanently shut down. Paper companies announced permanent closure of 6.7million tons of pulp and paper out of a capacity of nearly 90million. Primary reasons cited included high energy and chemical cost as well as increase shipping fees.

Paperloop now called RISI

Paperloop has officially changed its name to RISI. The rebranding is part of their effort to become an information data base. RISI stands for Resource Information Systems, Inc. and will serve as a source for independent economic analysis.

Quebecor World sells last asset

Quebecor World - once one of the largest North American printers - has completed the sale of its non core assets. Quebecor World has divested of all non publication printing plants.

Ennis Acquires TBF Operation

Ennis announced its plans to acquire the assets of Tennessee Business Forms based in Tullahoma, TN. This purchase allows Ennis to enter the short run print business and market labels.

Nekoosa Coated Products Purchases Nashua Carbonless

The specialty paper producer, Nekoosa Coated Products, purchased Nashua's carbonless sheet business. This news follows the recent announcement of NewPage selling their carbonless business to Glatfelter.

Southworth Company Strengthens Manufacturing Capabilities and Acquirers Esleeck Paper Company

Southworth Company, producer of Southworth® brand premium business papers and related products, announced that it has purchased the assets of Esleeck Manufacturing Company a manufacturer of high quality uncoated writing, technical and specialty papers.

The acquisition of the Esleeck paper mill in Turners Falls, MA will provide a strong operational extension for the Southworth brand of paper products. As part of the integration, the Southworth paper making operation in West Springfield, MA will be shut down. The Turners Falls mill capabilities include a broad range of paper weights, card stocks, colors, cotton fiber and rag content, extending the Southworth product range.

Cutsize Copy Papers to increase in Price .... Again

At least two major North American producers, International Paper and Domtar, have announced price increase on cut-size copy paper effective with shipments in early April. The balance of the manufactures are expected to follow.

North American printers report flat 2005 earnings and lower 4Q income

Printers in North America increased their sales but earnings dropped in the fourth quarter compared with the same period in 2005 due to high energy costs and a challenging pricing environment, replicating results from the third quarter.

AF&PA Releases Annual Survey of U.S Capacity

The American Forest & Paper Association released its Annual Survey of Paper, Paperboard and Pulp Capacity today. Results of the survey showed that U.S. paper and paperboard capacity continued to decline in 2005, decreasing 0.8% to 99.3 million tons. The decline extends a downward trend that began in 2001. U.S. paper and paperboard capacity contracted at an average annual rate of 0.9% between 2000 and 2005. Looking ahead, the survey indicates that capacity will decline 2.0% in 2006, and then edge higher in the subsequent tow years, rising 0.2% in 2007 and 0.4% in 2008.