Publishing Executive News
When the mayor of New York, a high-ranking city commissioner and other Big Apple bigwigs gather at the Empire State Building for a press conference, you can usually expect the announcement of some big public works project, such as a new skyscraper. What brought these dignitaries together, however, was a different sort of public works: a campaign to encourage recycling among the city’s 8 million residents, led by a $3 million advertising blitz that will put
posters on buses and subways, as well as commercials in movie theaters and on Time Warner cable channels.
Paper.com introduced a Green store last year http://paper.com/department/green/ with thousands of environmentally friendly products to support citizens that seek sustainable forest initiatives.
Thursday, March 20, 2008
Uncoated Free Sheet Update
Uncoated white paper prices continue to push upward - trade sources suggest that overall price levels are up $40-60/ton since beginning of year. The cut-size (desktop and copier papers) market remains the strongest. Domtar, International Paper, Georgia Pacific and others are out with a $60/ton March price hike on 50-lb offset rolls, with other Uncoated Free Sheet grades set to follow. The increase comes shortly after many producers announced a $60/ton
increase on cut-size paper for February.
Paper.com still has products available on site that have not been increased, subject to availability.
increase on cut-size paper for February.
Paper.com still has products available on site that have not been increased, subject to availability.
The declining North American UFS market – causes and future trends
By John Maine, Vice President, World Graphic Papers, RISI
The North American uncoated freesheet market used to be a high growth market. It consistently outpaced the growth in the economy by 1-2% per year as business copiers, home printers, faxes and a myriad of other end-uses expanded rapidly, fueled by technological development and plummeting prices for business machines.
This trend ended abruptly in 1999. Almost overnight, the uncoated freesheet market morphed from a profitable high-growth business, to one that has been plagued by declining demand and lackluster profitability. It took the industry years to recognize the change in trend, and chronic oversupply dampened profitability in the market.
What Caused the Market to Decline?
There were two broad factors that led to the decline in the market:
1. The loss of print markets to electronics
2. The loss of market share to alternative grades of paper
When discussing the decline in the uncoated freesheet market, most people refer to the primary cause as the shift to electronic technology.
This was indeed the primary driver behind the declines in demand for tablet, envelope, stationery, carbonless paper, technical papers and form bond.
However, a very important and often overlooked fact is that a third of the market share loss since 1999 was caused by a shift to alternative grades of paper. The introduction and successful growth of uncoated mechanical offset substitutes in particular has displaced about 840,000 tons of uncoated freesheet demand in North America since 1999. Furthermore, the rapid growth of cheap, mostly Asian, coated sheets has also displaced about 250,000 tons of uncoated freesheet sheets, mostly in the “cover, text and bristol” category.
The North American uncoated freesheet market used to be a high growth market. It consistently outpaced the growth in the economy by 1-2% per year as business copiers, home printers, faxes and a myriad of other end-uses expanded rapidly, fueled by technological development and plummeting prices for business machines.
This trend ended abruptly in 1999. Almost overnight, the uncoated freesheet market morphed from a profitable high-growth business, to one that has been plagued by declining demand and lackluster profitability. It took the industry years to recognize the change in trend, and chronic oversupply dampened profitability in the market.
What Caused the Market to Decline?
There were two broad factors that led to the decline in the market:
1. The loss of print markets to electronics
2. The loss of market share to alternative grades of paper
When discussing the decline in the uncoated freesheet market, most people refer to the primary cause as the shift to electronic technology.
This was indeed the primary driver behind the declines in demand for tablet, envelope, stationery, carbonless paper, technical papers and form bond.
However, a very important and often overlooked fact is that a third of the market share loss since 1999 was caused by a shift to alternative grades of paper. The introduction and successful growth of uncoated mechanical offset substitutes in particular has displaced about 840,000 tons of uncoated freesheet demand in North America since 1999. Furthermore, the rapid growth of cheap, mostly Asian, coated sheets has also displaced about 250,000 tons of uncoated freesheet sheets, mostly in the “cover, text and bristol” category.
Major Newspapers continue 4-Year Decline
In just four years the top newspapers in the U.S. have collectively lost about 1.4 million copies in daily circulation. But since the reported numbers come out every six months, the overall decline for individual papers may not hit home formany. Each fall off is usually in the low- to mid-single digits -- but it sure adds up. The industry has lost about 10% of circulation overall in the past
four years among the leading papers.
four years among the leading papers.
Hewlett Packard adds Inkjet Printer to Products
HP is the largest printer maker and has introduced a faster Indigo Press as well as
a wide format inkjet press.
The Indigo 7000prints 120 four-color pages a minute, while the inkjet press can print newspapers, books and signs.
The Indigo Press models have captured 49% of the entire digital press market share for high volume business. Xerox’s IGen has 36%, and Kodak’s NexPress enjoys 15%.
Paper.com has an entire section on site with all the major digital and inkjet paper grades.
a wide format inkjet press.
The Indigo 7000prints 120 four-color pages a minute, while the inkjet press can print newspapers, books and signs.
The Indigo Press models have captured 49% of the entire digital press market share for high volume business. Xerox’s IGen has 36%, and Kodak’s NexPress enjoys 15%.
Paper.com has an entire section on site with all the major digital and inkjet paper grades.
U.S. cotton prices are surging ahead
By Tom Stundza – Purchasing Magazine
U.S. cotton prices are rising this month, as global prices are the highest in a decade because world demand is exceeding supply for the second consecutive crop season. The Cotlook A Index of world cotton prices has averaged 70¢/lb so far in 2007-2008 .The price average is 11¢ higher than during the first seven months of the previous year.
As a result of the gap between world production and consumption, world cotton ending stocks are projected to decline this crop season by 9%, or 1.1 million tons, to 11.5 million tons. But some analysts say it could slide as low as 10.7 million tons, further boosting spring and summer prices.
What does this mean for Paper? All our premium 25-100% cotton grades are directly affected by this increase in cost for this fiber. Paper.com tries to maintain level prices, but when raw material costs escalate like this, it becomes nearly impossible
U.S. cotton prices are rising this month, as global prices are the highest in a decade because world demand is exceeding supply for the second consecutive crop season. The Cotlook A Index of world cotton prices has averaged 70¢/lb so far in 2007-2008 .The price average is 11¢ higher than during the first seven months of the previous year.
As a result of the gap between world production and consumption, world cotton ending stocks are projected to decline this crop season by 9%, or 1.1 million tons, to 11.5 million tons. But some analysts say it could slide as low as 10.7 million tons, further boosting spring and summer prices.
What does this mean for Paper? All our premium 25-100% cotton grades are directly affected by this increase in cost for this fiber. Paper.com tries to maintain level prices, but when raw material costs escalate like this, it becomes nearly impossible
Tuesday, March 04, 2008
Paper Mills close and Paper Demand decreases
We often report on the paper industry’s recent initiative of asset rationalization whereby mills are shuttering capacity or consolidating with other manufacturers. This trend is forecasted to continue into the foreseeable future. Recently, we outlined NewPage, Domtar and Fraser papers curtailing production equipment. StoraEnso consolidated its North American facilities with NewPage, as did Bowater with Abitibi. Internet is certainly taking a piece of printing demand and the higher cost of postage makes mailing
printed material more expensive. Even FSI (Free Standing Inserts – those promotions you get in the newspaper) have declined 5% from 2006. One expert commented that even Television advertising is no longer a leading influencer and loosing its effectiveness.
Most paper prices have increased; this certainly has not assisted with demand. One comment on all the sudden paper price increases is these advances have not kept up with the cost increases for such expenses as fiber, energy, shipping and chemicals. Look for more paper price increases and less paper consumed in 2008.
One industry expert stated that although demand for paper is decreasing approximately 2% a year, the producers are shuttering 6% of capacity each year.
printed material more expensive. Even FSI (Free Standing Inserts – those promotions you get in the newspaper) have declined 5% from 2006. One expert commented that even Television advertising is no longer a leading influencer and loosing its effectiveness.
Most paper prices have increased; this certainly has not assisted with demand. One comment on all the sudden paper price increases is these advances have not kept up with the cost increases for such expenses as fiber, energy, shipping and chemicals. Look for more paper price increases and less paper consumed in 2008.
One industry expert stated that although demand for paper is decreasing approximately 2% a year, the producers are shuttering 6% of capacity each year.
Paper Industry continues to see GREEN Initiatives
Simone and Schuster, a large trade book publisher, just announced a new paper policy that requires at least 10% of the papers they purchase must originate from FSC Certified forests by 2012. The policy also calls for increase in recycled content from 10% to 25%.
In another news related event, Domtar recently shipped a newly developed specialized lightweight bible paper that is FSC Certificated. RRDonnelley will publish the bible for publisher Thomas Nelson. This is the first FSC bible.
In another news related event, Domtar recently shipped a newly developed specialized lightweight bible paper that is FSC Certificated. RRDonnelley will publish the bible for publisher Thomas Nelson. This is the first FSC bible.
NewPage confirms Plans for mills
NewPage confirmed its plans for the new capacity acquired with the purchase of StoraEnso.
No11 Paper Machine – Rumford, ME will close permanently
No 43 and 44 and pulp mill in Niagara, WI will be closed permanently.
No 95 in Kimberly, WI will be permanently shut down
Converting mill in Chillicothe, OH will be shut down permanently
No11 Paper Machine – Rumford, ME will close permanently
No 43 and 44 and pulp mill in Niagara, WI will be closed permanently.
No 95 in Kimberly, WI will be permanently shut down
Converting mill in Chillicothe, OH will be shut down permanently
Heidelberg outlines Growth by Printing Process
Heidelberg outlined sales growth rates by Primary printing process as
Flexography 5.5%
Combo sheet-web 5%
Digital 3.8%
Sheetfed 1.7%
Coldset Web 1.3%
Heatset Web .12%
Flexography 5.5%
Combo sheet-web 5%
Digital 3.8%
Sheetfed 1.7%
Coldset Web 1.3%
Heatset Web .12%
Update on Coated Publication Groundwood Papers
The major publication producers such as Kruger, Myllykoski, Catalyst, AbitibiBowater and NewPage have announced a $60/ton LWC price increase for early April. UPM and Verso are
expected to follow. The current market is very tight, with backlogs of 10 to12 weeks.
We reported prices rose $30-60/ton in January. The price on 40# LWC have risen $190/ton between June of 2007 and January of 2008.
expected to follow. The current market is very tight, with backlogs of 10 to12 weeks.
We reported prices rose $30-60/ton in January. The price on 40# LWC have risen $190/ton between June of 2007 and January of 2008.
Thursday, February 28, 2008
US Pulp and Paper Industry Posts 4Q Results
Earnings for U.S. paper and forest companies fell 1.5% in the fourth quarter, compared to the year-ago quarter. The collective profit margin totaled 4.2%. It was the second consecutive quarter above 4% for the group of 21 publicly traded companies. Fourth quarter sales for the group increased 1.0%, driven by higher prices and increased volumes for most pulp and paper products.
RR Donnelley Fourth Quarter Loss Widens
R.R. Donnelley & Sons reported a fourth quarter net loss of $293.3 million, compared with a year-ago loss of $1.2 million. The results included pre-tax charges of $477.2 million. Quarterly net sales increased 25% to $3.09 billion, boosted by multiple acquisitions Donnelley made over the past year.
2007 Reduction in Uncoated Capacity
Mill Location tons
Inter’l Paper Pensacola, FL 350,000
Dirigo Gilman, VT 70,000
Georgia Pacific Wauna, OR 110,000
Boise Wallula,WA 135,000
Fraser Madawaska, ME 70,000
Domtar ME,WI,QC 240,000
Dryden, ON 315,000
Neenah Housatonic, MA 15,000
Urbana, OH 40,000
Wausau Groveton,NH 105,000
Valentine Lockport, LA 35,000
2007 total tonnage reduction 1,425,000 tons
Inter’l Paper Pensacola, FL 350,000
Dirigo Gilman, VT 70,000
Georgia Pacific Wauna, OR 110,000
Boise Wallula,WA 135,000
Fraser Madawaska, ME 70,000
Domtar ME,WI,QC 240,000
Dryden, ON 315,000
Neenah Housatonic, MA 15,000
Urbana, OH 40,000
Wausau Groveton,NH 105,000
Valentine Lockport, LA 35,000
2007 total tonnage reduction 1,425,000 tons
Some Recent Notable Acquisitions
Acquiring Company Purchase year
Domtar Weyerhaeuser 2007
Abitibi Bowater 2007
Investor Group St Marys 2007
PaperlinX Cascades 2006
NewPage StoraEnso NA 2008
Aldabra2 Boise from Madison Dearborn2008
Brookfield Longview Fibre 2007
Rank Blue Ridge 2007
International Paper Central Lewmar 2007
Neenah Fox River 2007
Atlas Finch 2007
Apollo / Versa Int’l Paper coated 2006
Glatfelter NewPage Carbonless 2006
Koch Georgia Pacific 2005
Kohlberg Inter’l Paper Industrial 2005
Mohawk Inter’l Paper Specialty 2005
Smart Paper Fraser Wisconsin mill 2005
Domtar Weyerhaeuser 2007
Abitibi Bowater 2007
Investor Group St Marys 2007
PaperlinX Cascades 2006
NewPage StoraEnso NA 2008
Aldabra2 Boise from Madison Dearborn2008
Brookfield Longview Fibre 2007
Rank Blue Ridge 2007
International Paper Central Lewmar 2007
Neenah Fox River 2007
Atlas Finch 2007
Apollo / Versa Int’l Paper coated 2006
Glatfelter NewPage Carbonless 2006
Koch Georgia Pacific 2005
Kohlberg Inter’l Paper Industrial 2005
Mohawk Inter’l Paper Specialty 2005
Smart Paper Fraser Wisconsin mill 2005
China’s Paper Industry continues to Grow
China may pass the USA as the world's leading producer of paper and board. RISI just reported on a survey that outlines in 2007, USA produced 84million tons compare to China at 65million. But China’s capacity continues to grow.
White Birch Completes Acquisition of SP Newsprint
White Birch Paper has bought the fourth largest newsprint producer, SP Newsprint, for $350million in cash. White Birch is now the second largest newsprint North American producer with AbitibiBowater as #1. (FYI. #2 largest in world is Norske Skog out of Norway). This acquisition increases White Birch capacity to 2.1 million tons or 18% of USA market share. The market leader, AbitibiBowater, has 47%, and #3 is Kruger with 10%. The top 3 North American producers have 75% of the domestic market share.
Note on Newsprint market: AbitibiBowater announced another $60/ton price hike increase for the second quarter. Just like the $60/ton increase for the first quarter
Note on Newsprint market: AbitibiBowater announced another $60/ton price hike increase for the second quarter. Just like the $60/ton increase for the first quarter
Wednesday, February 20, 2008
Another Wave of Price Increases
On the uncoated front, Domtar, International Paper, Georgia Pacific and Evergreen have all announced a $60/ton March price increase on 50lb offset rolls, with other uncoated freesheet grades set to follow. The increase comes shortly after many producers announced a $60/ton increase on business papers for February
Note: demand for uncoated is actually weaker; however, the market remains tight because capacity is shrinking (reduced by 1.4Million tons in ‘07), with further capacity reduction scheduled in 2008.
Note: demand for uncoated is actually weaker; however, the market remains tight because capacity is shrinking (reduced by 1.4Million tons in ‘07), with further capacity reduction scheduled in 2008.
Publication Papers to Increase in Price
Recently, both Kruger and Myllykoski have announced $60/ton price increase for publication papers for early April. These two suppliers are smaller, but we think other producers will follow with the magazine and catalogue market remaining extremely tight. Deutsche Bank - Equity Research reported that price on 40lb coated papers have risen $190/ton between June of 2007 and January of 2008.
Shipment volumes rose 11.5% this December versus 2006 (+2.9% YTD).
Shipment volumes rose 11.5% this December versus 2006 (+2.9% YTD).
Packaging Grades also see Increased Pricing
According to Mark Wilde of Deutsche Bank
The 7 largest producers (75% of North American market) have announced a $50/ton price hike for early March. Inventories remain lean, operating rates are high, and fiber costs are rising. The big obstacle will be making a containerboard price hike "stick" in the wake of sluggish box demand. December 6.8% drop in box shipments appears an "overstatement" on the downside, but it does raise a yellow caution flag. Smurfit-Stone plans to install six new
corrugators (one per month) in the first half of '08 to create "super" plants, which will be capable of replacing as many as 2-3 existing plants.
The 7 largest producers (75% of North American market) have announced a $50/ton price hike for early March. Inventories remain lean, operating rates are high, and fiber costs are rising. The big obstacle will be making a containerboard price hike "stick" in the wake of sluggish box demand. December 6.8% drop in box shipments appears an "overstatement" on the downside, but it does raise a yellow caution flag. Smurfit-Stone plans to install six new
corrugators (one per month) in the first half of '08 to create "super" plants, which will be capable of replacing as many as 2-3 existing plants.
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