WASHINGTON, DC—The U.S. Department of Commerce (DOC) is levying dumping duties against certain coated paper imports from China and Indonesia. The preliminary tariffs range from 30.92 percent to 89.71 percent for China, with an all-China rate of 135.80 percent. A single rate of 10.62 percent is being applied to all Indonesian coated paper producers. These margins would be in addition to the countervailing duties applied in March, which would make the overall duties 43.65 percent for China and 28.1 percent for Indonesia.

A final resolution on the unfair trade cases is expected later in the year.

“Once all of the evidence has been reviewed, the facts of the market will show that APP has not illegally dumped paper in the United States,” said Terry Hunley, acting president, Asia Pulp and Paper Americas (APP). “We have seen unfavorable preliminary rulings in the past only to have them rejected in the final analysis because a complete review of the paper market confirms the U.S. industry has not been injured and duties are unwarranted. That will be the end result here, too.”

U.S. paper companies NewPage Corp., Sappi Fine Paper and Appleton Coated Papers, along with the United Steelworkers, filed unfair trade cases on Sept. 23, 2009, with the DOC and the U.S. International Trade Commission alleging that certain coated paper from China and Indonesia had been dumped and subsidized, resulting in injury to the domestic industry and its employees. The paper products covered by the petitions include coated paper in sheet form used in high-quality writing, printing and other graphic applications, with a GE brightness rating of 80 or higher and weighing up to 340 grams per square meter.

“Commerce’s recognition of the impact that dumped coated paper products have had sends a message that our government is interested in restoring a competitive market in coated paper,” said Mark Gardner, president and CEO of Sappi Fine Paper North America. “From day one, our goal has been to restore a level playing field and that’s what our case is all about. Dumping has had a dramatic adverse impact on our industry and our economy as a whole and Commerce’s decision opens the door to addressing this unfair practice.”

There is a rather disturbing trend occurring: more and more mills in the last 2 years have closed down their operations. Over 80 paper machines and 45 mills have shut down – which reduces capacity and ultimately increases prices. With a huge inflation tidal wave staring us in the face – this is bad news…

Not only is this bad for the employees who now are unemployed, it is also bad for the printing industry. Ultimately, it enables mills to raise prices, control supply lines even more tightly, declare moratoriums on certain papers and engage in quasi-monopolistic practices. Unless you are a shareholder, this is bad news for everyone. We already see this in plate manufacturers – they are really only two remaining: Fuji and Kodak, for the general commercial market. Whenever supply chains are controlled by fewer manufacturers, the industry loses…

According to the American Forest & Paper Association (AF&PA), 55 percent of the paper consumed in the U.S. was recovered for recycling in 2007. This significant achievement was made possible by the millions of Americans who recycle at home, work, and school every day. In fact, if measured by weight, more paper is recovered for recycling from municipal solid waste streams than all glass, plastic and aluminum combined. Additional good news: every ton of paper recovered for recycling saves 3.3 cubic yards of landfill space.

Paper Recycling Starts with Us
Paper recycling begins with you and me. The paper recycling process begins at any number of locations, including community curbside programs, drop-off centers, schools or offices. Regardless of where the recycling process starts, it is important to understand what materials can be recovered in your community and how to properly prepare them for recycling.

How Is Paper Recycled Once Collected?
After it is collected, recovered paper is transferred to a recycling center, or Material Recovery Facility (MRF), where it is sorted into its different grades and “contaminants” such as trash, glass, plastics and metals are removed. Once the recovered paper is properly sorted and free of contaminants, it is compacted into large bales and transported to a paper mill where the recycling process begins. To begin the papermaking process using recovered fiber, the fiber is shredded and mixed with water to make a pulp. The pulp is washed, refined and cleaned, then turned to slush in a beater. The process of papermaking from that point forward is essentially the same whether or not recovered fiber is used.

Can Paper Continue To Be Recycled?
Each time paper is recycled, the fiber length decreases, which impacts its strength. It is estimated that paper has approximately seven generations, meaning it can be recycled up to seven times. Because paper is made from a renewable resource, introducing new, or “virgin” fiber into the process is a logical answer. Today approximately 80 percent of the nation’s paper mills use some recovered fiber in the production of new paper and paperboard products.
Further, the U.S. forest products industry plants an average of 1.7 million trees every day—five new trees for every tree harvested. Thanks to the responsible forestry practices of U.S. companies, the amount of standing timber in U.S. forests has increased by nearly 40 percent over the past half-century and by 10 million acres since 1990.

Nittany Valley Offset, a leading Mid-Atlantic and New England printing company, has introduced two major green printing initiatives in response to growing interest in print procurement that meets sustainability practices. The firm now provides printed materials that meet the Forest Stewardship Council (FSC) standard for environmentally responsible procurement procedures. In addition, they now print with an eco-friendly ink, which is rated very high in the newest environmental impact index adapted by the National Association of Printing Ink Manufacturers (NAPIM).

Spurred by the growing need for high quality, four color printed materials that are both supplied at cost effective prices and produced in an environmentally responsible printing plant, Nittany Valley Offset (NVO) now helps clients preserve natural resources, conserve energy usage, and reduce toxins emitted into the air and water.

“Our operation is a far cry from the simple use of recycled paper with post consumer fiber,” said Robert Butkins, President of Nittany Valley Offset. “The criteria for the Forest Stewardship Council (FSC) certification require creating manufacturing systems which demonstrate the company is fully committed to sustainable forestry practices.” NVO also uses low-VOC based inks. NAPIM established an “Eco Task Force” that developed and launched the NAPIM Bio-Derived Renewable Content (BRC) Labeling Program this year. NVO’s ink has been certified by NAPIM with a BRC Index of 70, which relates to the percentage of bio-based, renewable raw materials contained in the product. Since the percentage includes not only soy oil, but any other vegetable oils used in the ink, it reflects a much more accurate impact rating system. Nittany Valley Offset customers can request the use of product logos from FSC, the Rainforest Alliance or BRC, given their willingness to print on an FSC certified paper. This allows their clients to demonstrate their commitment to the environment in their print procurement practices.

The FSC’s Chain of Custody certification is only awarded to organizations that manufacture, process or trade in forest products and can demonstrate they adhere to responsible sourcing practices by complying with forest sustaining procurement policies. FSC sets environmental standards for responsible use of forestry resources and is widely recognized by corporations and governmental entities around the world.

We all have had our share of bad news – about the economy, banking, housing, Wall Street. I’m sure we are all sick of hearing negative news, and would hope to offset it with some positive news on occasion. Well, with every negative story about another East Coast printer closing their doors, there is an opportunity for the printers that are left standing.

Their customers have to look for new and reliable sources for their work. From a sales perspective, it is a HUGE opportunity to be able to add market share.  So – there is a silver lining to all of these dark clouds, as long as we can see it.

Reed Elsevier, announced in July of 2009 its intentions to substantially exit its Reed Business Information-US publishing business, while retaining specific businesses. As a result Graphic Arts Monthly has closed. No additional print issues will be published, and their web site will close on April 30, 2010.  A sad day in the industry…when you see a “staple” fall by the side.

For at least 30 years I have seen annual Print industry award announcements, and received the corresponding notifications. At one time I worked for a printer that would regularly win PIA Best of Category Awards, at least 2 or 3 per year.  We have awards at various levels, and usually a “Creme de la creme award” of some sort.

Over the years I have attended the various awards ceremonies, whereby everyone applauds the winners, drinks profusely and chats for hours on end…but the question remains: what for? I can only determine a few reasons:

1. Ego – someone feels the personal need to be recognized among his/her peer group.
2. Plaques for the lobby.
3. Perceived marketing advantage in the client base.
4. Someone thinks it is good for employee morale.

As you can probably assume by the tone of this article, I don’t see any value in Print Industry Awards. Anytime we spend money, it should be viewed from the standpoint of the employees and customers, as much as ownership/management. Ask 40 employees if they would rather have that plaque on the wall or a check for $75. Ask your customers if they see any value in an award, from the buying perspective. We are not in the auto industry, and these are not J.D. Powers awards. I would guess that 95% of my clients do not even know these associations exist, much less the awards that are granted – nor do they care. Until there is some significant value in winning an award, I’ll spend our money elsewhere…

As I have told a few merchants, this is a very, very bad time for any manufacturer to be raising prices. The assumption that the industry can merely “pass it on ” is very naïve. In this market and given our products, when I see any cwt price rising 10-15%, I cringe. Why? Because above our current prices either:
a. I am eating some/all increases in paper cost or
b. We do not get the work without discounting labor.

The last thing I want to do is discount labor right now. So, if our price is high, we have to run roll stocks at lower prices. That is simply reality for us to increase market share, add incremental volume.

This new economy in a nutshell for printers:

“The market dictates prices, regardless of what an estimate or supplier cost may say / be. The key to success is figuring out how to produce the product for a profit, at an acceptable market price. The ONLY logical and sane way to do that is lower your material costs. An endless discounting of labor is why the sheriff has visited the doors of so many printers… “

What the mills do not want to acknowledge is the economic state of the industry. These kinds of actions simply cause me to look elsewhere for supply lines. I’ll run like hell into the arms of a foreign company if I am stabbed in the back by my “domestic partners”. When it comes down to “survival”, which is where the industry is, NVO and all others will look to foreign sheets now more than ever. I cannot raise prices, nor pass on these types of increases. I have contracts that are locked in. These prices increases will simplyhave the reverse effect they think they will have. Business is down, so I raise my prices? Huh ? Anyone ever hear of the elasticity of supply, price and demand? You CANNOT “price increase your way into Revenue growth”,  when demand is down. People use alternatives, and in our case foreign sheets, or EVEN WORSE they drop print and use NEW MEDIA, because print is rising in cost in a down economy. This is just a plain stupid strategy, from a marketing and financial viewpoint. It’s also ironic, given all the emphasis on “green printing”, “the power of print”, etc…and then create a strategy that cause people to run away from your products. Not very bright. It is insane to raise prices to try and cover Revenue losses because the industry is down 20-30%. They need to lower their costs of production, like everyone else. Renegotiate union agreements.  Downsize. Do more with less. That is what every other industry has to do…
Chile is very transparent excuse, as are a myriad of other excuses to raise prices. This is a HUGE disservice to the industry. And I think, damaging to mills in the long run. The world has changed in the last 18 months. The industry has changed. But it’s the “same olde game” with paper manufacturers. In the meantime – clients are cutting print budgets left and right, reallocating resources to New Media. And the paper industry is putting another nail in their own coffin by raising prices,  MAKING and daring customers to leave them. Arrogance is also not a wise strategy. I am all for supporting domestic firms, and always do whenever possible. BUT when they fail to recognize the damage they incur to their “Business partners”, I have no hesitation in making any foreign firm wealthy, since the domestic firm could care less about the domestic  industry they allegedly serve. Sure makes me look at foreign sheets, regardless of what tariffs may be in place. And, regardless of body, gloss, or runnability – CLIENTS WANT LOWER PRICES… ALL ELSE IS SECONDARY IN THIS NEW AND LASTING ECONOMIC MODEL. This is not a “blip on the screen”. The industry and the economy have changed forever. It’s time the paper industry changed their pricing and expense perspective, before they turn themselves and the industry into buggywhips.