Unlike real estate, which pundits predict is moving to a buyer’s market, consolidation in the paper industry has finally turned a longtime buyer’s market to a seller’s market.
Following price increases beginning with the June 1 shipment, Mead and Bowater announced a rise in the cost of coated and groundwood paper effective with shipments starting July 1.
Lead times for ordering and receiving paper have been lengthening as well, which also often predates further price increases. It’s probably no coincidence that this is all in time for the 2006 holiday catalog season.
Oddly, it is not a demand-driven market that has forced a series of price increases in 2005 and 2006.
The fine paper industry has not been profitable for many years. Yes, the mills are trying to consolidate and reduce internal costs, hopeful of making a positive return to their shareholders.
Georgia-Pacific, for example, sold many of its fine paper mills to focus on consumer products such as tissue and towels. Those sectors of the industry have been much more profitable through the years as they do not seem to have the peaks and valleys prevalent in the fine paper industry.
Additionally, paper mills are shedding their small, slow paper machines either by divestiture or taking them out of service and stopping production. Two major mills, International Paper and Weyerhaeuser, are considering selling some of their assets.
International Paper is trying to sell its coated paper machines and appears to want to concentrate solely on uncoated paper. Weyerhaeuser recently closed the Prince Albert Mill in Canada and is investigating what sale price it might obtain for its fine paper machines in order to focus on its profitable building products division.
Canadian mills face the added pressure of the weakening U.S. dollar. Since April 15, the U.S. dollar has lost about 6 percent of its value against the Canadian dollar. This adds to the problems of the Canadian mills because a high percentage of their production is shipped to the United States.
Also, private investment firms have bought many paper mills and merchants in the past few years. These include New Page (remember Westvaco’s fine paper division?), which is owned by Cerberus Capital Management (2006); Boise Cascade LLC, owned by Madison Dearborn Partners (2006); and Georgia-Pacific, now owned by Koch International (2007). In addition, Bain Capital now owns Unisource, the largest privately held merchant (2005).
Paper mills have not seen the pendulum swing their way for more than 10 years. Despite the constant rise in prices in the past 12 to 18 months, demand has remained steady and appears, at least in the short term, poised to increase overall domestically and certainly internationally, particularly in China and elsewhere in Asia.
Though the market apparently has turned in favor of the mills and merchants, that strength is and will remain tenuous as the possibility of a contracting economy combined with a predicted postage rate increase in summer 2007 does not offer a long-term assurance of future paper market strength. Note to marketers: Many buyers have never experienced a tightly controlled market. Planning ahead is the key.
International Paper Earns Third-Party Certification of its U.S. Paper Mills, Container Plants from the SFI & PEFC Standards for Forest Sustainability
Company to further expand product offerings with Forest Stewardship Council certification
MEMPHIS, Tenn., June 28 /PRNewswire-FirstCall/ -- International Paper (NYSE: IP) today announced that its U.S. pulp and paper mills and container plants are now third-party certified to ensure their products are made from sustainable wood fiber. The moves are part of the company's commitment to forest stewardship and providing customers a broad range of products made from renewable resources.
(LOGO: http://www.newscom.com/cgi-bin/prnh/20020701/IPLOGO )
"Customers have choices in today's marketplace," said John Faraci, International Paper chairman and chief executive. "We want our customers to know we are committed to making high-quality paper and packaging from sustainable sources. Independent, third-party certification is an important step in demonstrating that commitment."
International Paper now has the following certifications from top independent national and international certification bodies:
Chain-of-custody certification from the Sustainable Forestry Initiative(R) (SFI(R)) standard for all 16 of its U.S. pulp and paper mills, which ensures the company has a reliable accounting system for tracking the source of the wood fiber
Chain-of-custody certification from the Programme for the Endorsement of Forest Certification (PEFC) for all 16 of its U.S. pulp and paper mills
Wood fiber sourcing certification from the SFI standard for all 65 U.S. container plants, ensuring the wood fiber used to make corrugated packaging comes from a certified source
SFI standard certification of its U.S. wood procurement systems, including landowner education and contractor auditing, to ensure 100 percent of the company's wood fiber comes from trees that have been sustainably harvested
Chain-of-custody certification from SFI and the Forest Stewardship Council (FSC) standards for xpedx, North America's largest distributor of printing papers. xpedx is a business of International Paper.
To further expand its sustainable product offerings and provide customers with more certification options, International Paper will also pursue Forest Stewardship Council (FSC) chain-of-custody certification. These are the latest in a long history of commitments by International Paper to ensure the continuing health of the world's forests.
"International Paper has been a leader in sustainable forestry and forest conservation for decades," said Dr. Sharon Haines, International Paper's director of sustainability. "By encouraging responsible, sustainable management of forestlands, including reforestation and regeneration, International Paper not only provides the essential paper and packaging products people use everyday, but we also ensure that forests continue to be healthy and abundant for generations to come."
About Sustainable Forestry & Forest Certification
Simply put, sustainable forestry means trees used to make paper products are replaced through reforestation or natural regeneration. Third-party certification ensures the best harvesting practices are used to protect air, water, soils and wildlife, and that no wood comes from endangered forests. Consumers can choose products that meet the highest environmental standards by looking for a sustainability label on pulp, paper and packaging made by International Paper.
SFI is the largest of two primary independent forest certification standards in North America, and is the recipient of the United Nations Environmental Program/International Chamber of Commerce's 2002 World Summit Business Award for Sustainable Development Partnerships.
SFI is recognized and endorsed by the leading international forest certification system, Programme for the Endorsement of Forest Certification (PEFC). PEFC-endorsed forest certification systems around the globe, including the SFI program, account for 478 million acres of certified forestland-more than any other third-party forest certification system.
FSC is an international organization that promotes responsible stewardship of the world's forests. Over the past 13 years, more than 220 million acres in more than 82 countries have been certified according to FSC standards
The chain-of-custody and fiber sourcing processes track the possession and transfer of certified wood and wood fiber from the forest, through the stages of production, to the end user.
International Paper (NYSE: IP), founded in 1898, is a global uncoated paper and packaging company with primary markets and manufacturing operations in North America, Europe, Russia, Latin America and Asia. Its uncoated papers and packaging businesses are complemented by xpedx, North America's largest distributor of printing papers and graphics supplies and equipment. Headquartered in the United States, International Paper employs approximately 54,000 people in more than 20 countries, and serves customers worldwide. Annual sales are about $22 billion. International Paper partners with customers and environmental, academic, civic and governmental organizations, as well as landowners and harvesting professionals, to encourage responsible forest stewardship, improve the health and productivity of forestlands and increase recovery of our recyclable products. The company has a long-standing policy of using no wood from endangered forests. To learn more about International Paper, its products and commitment to economic, social and environmental sustainability, visit www.internationalpaper.com.
SOURCE:
International Paper
CONTACT:
Amy J. Sawyer
+1-901-419-4312;
INVESTORS:
Brian McDonald
+1-901-419-4957
Ann-Marie Donaldson
+1-901-419-4967
all of International Paper
JSC Volga is one of the largest newsprint producers in (555,000 tonnes were produced in 2005). Clearly, such operations have an environmental impact.
Environmental monitoring and assessment are the responsibility of the Ecological Department of JSC Volga and its Environmental Analysis Centre (EAC). The EAC was established in 1997 and now includes 5 laboratories.
The EAC is in charge of: monitoring and control of industrial impacts on the environment; administration of fees and fines for the use and contamination of nature resources; education and expansion of a ‘green’ culture
Monitoring and control of industrial impacts requires trained and skilled personnel. The EAC status has been attested by the Russian State Standards System (GOSSTANDART) and the centre is registered in the State Register (No. RU.0001.512138). Gosstandart has confirmed the EAC capacity to test parameters of waste water, natural water, drinking water, hot-water supply and swimming-pool water.
Water samples from the Volga River are taken at the water intake point, 300 m upstream and down stream from the discharge point and in some other key locations on the river. The results are used to determine the impact of the discharged water in the natural waters of the Volga River .
JSC Volga’s water treatment facilities process waste water coming from the Mill but also from other companies and from the local community. The EAC specialists monitor the volume and content of effluents supplied on a contractual basis from other industrial concerns and supervise the performance and payments of such service contracts.
Over the last years, a serious effort has been made to reduce consumption and waste generation, in line with the state policy to reduce the environmental impact of industry.
In accordance with the current laws and regulatory framework, the use of natural resources is not free. The EAC specialists calculate environmental payments for use of natural resources, impairment of the environment and are responsible for due payment of ecological charges and penalties, if any.
