Archive for the ‘ paper ’ Category

FSC is at a Crossroads

Having been in the industry for 35 years, one tends to see many fads and fashions come and mostly go by the wayside. We have seen foil stamping become a “must use” design feature for high-end coated products, recycled papers spike and plummet in popularity and most recently the advent of certified paper, pulp and wood products. Based on my own observations, it looks like the FSC products are headed in the same downward direction.
I would say there are a few very logical reasons for this.

First, when the heart and the wallet collide in a conflict of objectives, the wallet wins 98% of the time. If a designer or publisher is faced with “being green” or not publishing an issue, they will skip going green. And let’s face it, many publications are barely hanging on by their fingertips, hoping to sell enough ad space to turn a profit.

Secondly, FSC is making it cost prohibitive for printers to continue to pay for an annual audit and certification without the benefit of an increase in Revenue. Once again, if I am going to lose a very small amount of business if I am not certified, why pay the expense in a down economy with predatory pricing?

Thirdly, many customers eyes gloss over when you try and explain how the process works. Other have not even heard of it. So – why should my Salesforce be educating the marketplace, when that should be the job of the certifying body?

The fate of certified papers is still undecided by the marketplace – but its’ prominence is diminishing daily.

Tuesday, January 18, 2011

The owners of North America’s two largest makers of coated paper are discussing a deal that could result in one of them having a significant ownership stake in both manufacturers, according to a published report. NewPage’s owner, Cerberus, and Apollo Management, which has a controlling interest in #2 maker Verso Paper, are discussing what to do about NewPage’s high levels of debt, PPI Pulp & Paper Week reported recently. Apollo is also the largest holder of #1 NewPage’s $800 million second-lien bonds, the publication said. “One mutually beneficial scenario could see Cerberus retaining a diluted equity stake by sharing ownership… with Apollo through debt equitization,” the publication said. “Debt equitization” means debt held by Apollo would be converted to an ownership stake.
Apollo’s apparent “loan to own” intentions for NewPage came to light early last year when it and two other hedge funds snapped up more than 50% of the second-lien bonds, apparently under the assumption that NewPage’s inability to make debt payments would eventually give them control of the company.
Magazine publishers, printers, catalog companies, and other major buyers of coated paper would certainly cry foul if two companies controlling more than half of the continent’s coated paper capacity tried to merge. But it’s not clear whether Apollo would trigger any antitrust alarms if it obtained a sizable equity stake in NewPage by swapping debt for equity.
Analysts and industry executives have touted consolidation as the path to reasonable profitability for paper manufacturers. The tactic has worked well in the North American uncoated freesheet market but not so well in the newsprint market. UPM is trying it in the European coated and supercalendered markets with its proposed purchase of Myllykoski.
Source: http://deadtreeedition.blogspot.com/2011/01/newpage-verso-owners-reportedly.html

November 22, 2010
SAN FRANCISCO—Nov. 22, 2010— ForestEthics has released a report said to uncover the Sustainable Forestry initiative’s (SFI) industry-sponsored greenwashing in marketing wood and paper products. Titled “SFI: Certified Greenwash”, the report asserts that the SFI label primarily serves the interests of the timber, paper and forest products industries. Its centerpiece is a two-page infographic depicting the web of influence through which those industry interests dominate SFI.

“Greenwash is deception pure and simple,” said Aaron Sanger of ForestEthics. “Our report exposes SFI’s greenwash, an industry-sponsored scam that threatens our forests, communities, fresh water and wildlife.”

Among the report’s findings:

• Virtually all of SFI’s funding comes from the paper and timber industries.

• SFI’s most commonly used label, the Fiber Sourcing label, requires no chain-of-custody tracking of a product’s content or origins.

• Out of 543 audits of SFI-certified companies since 2004, not one acknowledges any major problem on issues—such as soil erosion, clearcutting, water quality, or chemical usage—that should be the focus of a ‘sustainable forestry’ program.

• In one case, the SFI audit team—which included only two auditors—spent just five days assessing an area larger than the entire state of Pennsylvania. They reported no violations of SFI standards and didn’t identify so much as a single opportunity for improvement.

• Board members representing SFI’s environmental and social sectors include Mike Zagata, former NY Gov. Pataki’s “most controversial agency head”, and Marvin Brown, who this October resigned as Oregon state forester amid accusations that his department conducted and tolerated environmentally-harmful forestry practices.

In March, ForestEthics mailed letters to Fortune 500 companies that rely heavily on direct mail to market their products and services, including companies from the insurance, financial services and telecommunications sectors. Citing public controversy about SFI’s deceptive “green” marketing practices, the letters offer ForestEthics’ expertise to help companies find legitimate ways to improve and promote the environmental attributes of their products.

Source: Press release.

The National Review has weighed in on the protectionist paper tariffs recently:

“…Ironically, just a week before the AFL-CIO attack, Ohio’s incumbent governor, Democrat Ted Strickland, was in Washington seeking special favors to protect a corporation whose actions could come right out of an Oliver Stone fever dream. That company, which Strickland mentioned by name in his testimony, is NewPage, an Ohio paper company. And like the fictitious Teldar Paper of Wall Street — the subject of Gekko’s infamous “Greed Is Good” speech — NewPage is owned by a rapacious hedge fund that is forcing the company to downsize, kill jobs, shut down plants, and bully other companies out of its market — all in the name of higher profits.
The hedge fund in question is none other than Cerberus Capital Management, a firm last seen driving another of its companies — Chrysler — into bankruptcy. Like its management of Chrysler, Cerberus’s ownership of NewPage has been nothing but trouble — but that didn’t stop Ted Strickland from going to Capitol Hill to lobby on its behalf. Following a business model that could be charitably described as “strangle the supply of paper in order to force up prices,” NewPage was a leading liquidator of jobs during the 2008 recession. It shut down six paper-making facilities in 2008 and refused to sell two formerly profitable plants to an eager buyer — thereby reducing the supply of paper in the marketplace.

But NewPage wasn’t content shutting down its own plants. It actually went to the trouble of buying other plants just to shut them down, too. These moves attracted wide condemnation from union leaders, whose pleas went unheeded. NewPage pocketed more than $300 million in federal handouts while still posting losses in the hundreds of millions of dollars — and quarterly losses increased by 60 percent even while its sales increased. This while its CEOs (it has had five of them in the past four years, only one of whom lasted a full year) walked away with multimillion-dollar severance packages. Other high-level executives banked millions of dollars in bonuses.

Which brings us to Strickland’s testimony. Contra his anti-corporate rhetoric in this campaign, Strickland is in fact lobbying for political protection for NewPage in the form of new protective tariffs tailored to ensure its interests. In doing this he risks not only his carefully cultivated image as an anti-corporate crusader but also (and more important) undermines the United States’ credibility as an honest partner in international trade relationships.
In his testimony, Strickland had this to say about the paper companies he was hoping to save:

Strickland made his case in terms of saving Ohio jobs and workers from the ravages of unfair international trade, but what he failed to mention was that he seeks trade sanctions so stiff and severe that both the Chinese and Indonesian governments are guaranteed to dispute them, even before they take effect, at the World Trade Organization. Retaliatory tariffs—which are sure to follow should Strickland get his way—could threaten thousands of American jobs and hurt millions of American consumers, in Ohio and around the country.

NewPage is the very type and model of a self-interested corporation that puts profit above all and isn’t ashamed to take political favors and government handouts in the course of doing business. That Strickland would go to back for such a corporation at all—much less defend it, by name, in federal testimony—while selling himself as the blue-collar champion of the working class is remarkable. That he does so while his allies compare his opponent to Gordon Gekko, who would be right at home in NewPage’s executive suite, suggests that he is either immune to irony or believes Ohio voters to be deaf, dumb, and illiterate. “Money never sleeps,” according to Gordon Gekko. Neither does hypocrisy.”

– Mytheos Holt covers Ohio for National Review Online’s Battle’10 blog.

September 21, 2010 WASHINGTON, DC—Sept. 21, 2010—Appleton Coated LLC, NewPage Corp. and Sappi Fine Paper North America, together with the United Steelworkers (USW), welcomed the Department of Commerce’s announcement of final antidumping and countervailing duty margins on coated paper imports from China and Indonesia.
Today’s announcement of final antidumping and countervailing duty margins sets out the tariffs that will be applied to unfairly traded imports of coated paper from China and Indonesia that benefited from subsidies or were dumped in the U.S. market. The Department of Commerce’s action updates the preliminary margins that were announced earlier in the consideration of the case which was filed jointly by the USW and the three companies.

The antidumping margins announced by DOC on imports from Indonesia were 20.13 percent and ranged from 7.6 to 135.83 percent on imports from China. Countervailing duties on products from Indonesia will be subject to tariffs of 17.94 percent and on Chinese imports range from 17.64 to 178.03 percent. If the ITC votes affirmatively in their upcoming injury determination, these rates will apply for the term of the relief. The ITC will vote on October 19 and the transmittal of its views to DOC will occur on November 4.

The companies and the USW filed unfair trade cases on September 23, 2009 with the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) 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.

“Today’s announcement validates the allegations the industry made almost a year ago as to how Chinese and Indonesian coated paper exporters were engaged in unfair trade practices. Correction of the dumping and subsidization by the imposition of duties to offset the margins announced today will help provide some more certainty that a competitive market will exist in these products,” said Sandra Van Ert, president and chief executive officer of Appleton Coated LLC.

Leo Gerard, International President of the USW said, “Last week the International Trade Commission heard from the companies and their customers, the union and elected officials from around the country of the injury that has been inflicted by Chinese and Indonesian coated paper producers who are, to put it simply, cheating. They’ve engaged in unfair trade practices to advance their interests at the cost of production and jobs here in the U.S. Commerce’s decision today further validates their unfair pricing and sets the stage for final action to restore a competitive market.”

“Working together, the companies and the Steelworkers have fought for a fair and level playing field,” stated George Martin, president and chief executive officer of NewPage Corporation. “Today’s action is welcome news for the industry and its employees as they look to a future where they can compete fairly based on the quality of the products they produce, the investments that have been made in new technology, and sustainable forestry practices.”

Mark Gardner, president and chief executive officer of Sappi Fine Paper North America said, “Commerce’s recognition of the impact of dumped and subsidized products sends a message that our government is interested in restoring a competitive market in coated paper. We have presented before the International Trade Commission a clear and compelling case that these dumped and subsidized products have in fact injured our businesses, depriving our employees of enriching jobs. We are hopeful the Commission will recognize that injury in its final determination next month.”

“Our members work hard and play by the rules,” said Jon Geenen, USW International Vice President. “All they want is a fair chance to compete. This decision shows clearly what they’ve been up against in terms of unfair trade practices of the producers they have to compete against.”

“It’s time, once and for all, for us to have the rules of fair trade enforced and the government to stand up for their interests. The domestic industry has experienced capacity reductions and under-utilization resulting in the loss of jobs in communities all across the country. The petitions show that unfairly traded imports from China and Indonesia are a significant contributor to that underutilization of capacity, mill closures and resultant job loss,” said Geenen.

The three companies employ about 6,000 production workers represented by the USW at 20 paper mills operating in seven states.

About Appleton Coated
Appleton Coated, headquartered in Kimberly, WI, provides focused market leadership in premium coated and specialty paper products. The Appleton Coated product portfolio includes a range of commercial printing and book publishing papers marketed under the Utopia® brand as well as specialty and private label products. Known for their performance, aesthetics, and environmental attributes, Appleton Coated manufactures their products in a state-of-the-art facility in Combined Locks, Wisconsin, hosting the newest papermaking machine of its type in North America. For more information please visit our website at www.appletoncoated.com/.

About NewPage Corp.
Headquartered in Miamisburg, OH, NewPage Corp. is the largest coated paper manufacturer in North America, based on production capacity, with $3.1 billion in net sales for the year ended December 31, 2009. The company’s product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers. These papers are used for corporate collateral, commercial printing, magazines, catalogs, books, coupons, inserts, newspapers, packaging applications and direct mail advertising.

NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. These mills have a total annual production capacity of approximately 4.4 million tons of paper, including approximately 3.2 million tons of coated paper, approximately 1.0 million tons of uncoated paper and approximately 200,000 tons of specialty paper. For more information, visit www.NewPageCorp.com.

About Sappi Fine Paper North America
Sappi Fine Paper North America (SFPNA) is a leading North American producer of coated fine paper used in premium magazines, catalogues, books and high-end print advertising. Headquartered in Boston, MA, Sappi Fine Paper North America is known for innovation and quality. Its brand names, including McCoy, Opus, Somerset and Flo, are some of the industry’s most widely recognized and specified. SFPNA is a division of Sappi Limited (NYSE, JSE), a global company headquartered in Johannesburg, South Africa, with manufacturing operations on four continents in 10 countries, sales offices in 50 countries, and customers in over 100 countries around the world. Learn more about Sappi Fine Paper North America at: www.sappi.com/na/.

About the United Steelworkers
The United Steelworkers (USW) is a North American union headquartered in Pittsburgh that negotiates labor agreements representing 850,000 active workers employed in metals, mining, pulp, paper, timber, rubber, chemicals, glass, auto supply, energy producing industries, plus the service and professional sectors to include healthcare, municipalities and pharmaceuticals. For more information: www.usw.org/.

Source: Press release.

More Paper Merchant Consolidations

On August 23rd Frank Parsons signed a letter of intent to sell their Fine Paper Divisions located in Maryland, Pennsylvania, and Virginia to Lindenmeyr Munroe. They are working to close on this transaction no later than September, 30th, 2010. According to their web site:
“Our name, Frank Parsons, will not change and our ability to serve the paper needs of our commercial customers will remain the same. Instead it will allow Frank Parsons to focus all of our energy on serving Corporate America.

Just like we have for the last 28 years, we’ll continue to provide state of the art business solutions and office products including:

* The full range of office product solutions
o This means paper plus all your other office products needs

* Technology products such as:
o Data center solutions
o Storage area networks

* Business services including:
o Managed print services
o Post-warranty maintenance
o Printer maintenance
o Media buy back
o Data eradication services”

More Paper Mill Price Increases

Today, yet another mill, Suzano Mills announced a price INCREASE effective August 15, 2010 of $2/cwt. The letter merely states there is an increase, and gives absolutely no explanation. Keep in mind that many economists would agree that we are in a deflationary mode (prices should be going DOWN, not up. Allow me to quote one of them:
“Four major considerations suggest that the past several quarters may be nothing more than an interlude in a more sustained economic downturn, with further negative quarters still ahead. Such an outcome will suppress inflation further and quite possibly lead to deflation. ” (http://www.marketoracle.co.uk/Article21046.html – 7/10/2010)
This increase is on the heels of many other mills increasing prices as well. I wish the Department of Commerce and Justice would worry more about paper mills engaging in collusion than worrying about taxing foreign imports and protecting their antiquated pricing models.

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.”

Paper Mill Closings

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…

How is Paper Recycled?

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.