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Coy Paper Company offers a wide selection of paper grades as well as  industry expert, P. Scott Vallely, also keeps you up to date on what is happening in the paper industry.
Please visit our section of recent news, industry links, and trends by clicking PAPER NEWS.  This is a popular gathering of updated news on all paper markets and visited by major mills, analysts, and end users.   Please visit entire section for  PAPER NEWS by clicking on links.
We offer a sample as follows -

Please, also, visit PAPER NEWS for all the news on paper

  

 

Friday, February 05, 2010

Top Printers for the USA Government

The USA Government Printing Office (GPO) awarded bids to more than 1800 printers in 2009 for $425Million (down from $421Million in 2008). Top five include
NPC (News Printing) $29.3Million
RRDonnelly $27.0Million
Monarch $19.5Million
Gateway Press $17.5Million
SourceLink $16Million

Time Magazine Down

Time Warner reported that its publishing unit, Time Inc., generated $3.7 million in revenue in 2009, down 19% from 2008. Those losses were fueled largely by a 22% or $541 million decline in advertising revenue. Meanwhile, subscription revenues declined 13% for the year and other revenues fell 24%.

Thursday, February 04, 2010

Standard and Poors Outlines Slow Recovery for Paper Industry

?S&P recently generated a report that outlined a slow recovery for companies involved with USA forest products. ?The document reviews a slight improvement in outlooks for 60% of forest sector companies. This report is titled “The US Forest Products Sector is Entering a Slow Recovery” and says that the positive trend reflects significant debt reduction that these companies achieved, despite poor economic conditions. They believe that the economy and housing markets have hit bottom and that the sector’s credit profile will improve over the next few quarters.
I, on the other hand, am not as bullish, especially if one is focused on the pulp and paper segment of the forest products industry. There will be some improvement, assuming the economy picks up, but debt reduction will be a challenge.

International Paper Posts Loss - Domtar Reports Profit

The International Paper Company, the world's largest pulp and paper producer, reported a loss for the forth quarter of $101million due to a decline in sales. The Industrial Packaging unit dragged down the balance of the corporation, posting a loss of $391Million.
Meanwhile, Domtar experienced strong pulp sales and benefited from recent pulp price increases. The company announced a profit of $124Million for the forth quarter (compare to a loss of $676Million 4Q2008).

Wednesday, February 03, 2010

AF&PA Reports on December Paper Shipments

As announced by AF&PA Report
In December, paper output in the USA was 2.9Million tons, up 3.3%, yet for the year, paper output was down 13%. Coated paper improved 12.8% for the month, but was down 18.7% for the year. Uncoated mechanical grades increased 1.4% in December, but dropped 20.5% for the year. Uncoated freesheet was up 1.9% for the month and down 11.1% for the year. This is the second consecutive month of increased output vs. 2008.

R.H. Donnelley is Now Dex One

R.H. Donnelley changed their name to Dex One and also announced it will emerge from Chapter 11. The 124-year-old local business directory publisher and marketing company also provides business search engines and pay-per-click networks. The new name will tie into their search website dexknows.com. The company is attempting to rebrand itself as a search engine company.

Tuesday, February 02, 2010

Paper Industry in North America

The paper industry continues to produce fewer tons each year. Not a healthy trend!

The last decade has not been friendly for the North American packaging paper producers, considering the demand peaked in 1999 at nearly 56Million tons. Several believe the market will have fallen below 46Million tons in 2009, when the final numbers come out. Meanwhile, the producers for graphic papers last witnessed very good growth in 1970 and the 80s and than 90s- but the market topped out at 50Million tons in 2000. In 2001, the demand fell to about 46Million tons – and managed to stay at this level until 2007. Between 2007 and 2008, demand fell 15% to 39Million tons and most forecast 2009 will end up at slightly under 32Millions tons (19% down).
The biggest element in this decline was lack of advertising (especially for Auto, Financial, and Real Estate). It is predicted that the next few years will generate a flat demand, and than decline, beyond 2011. One study indicated that this segment might be down to 25Million tons by 2024. Newsprint could well be the largest component of this decline.

Corrugated Box Prices Increase

RockTenn, Graphic Packaging International, and Sonoco have all announced an increase for corrugated box prices by 10 percent and corrugated sheets by 12 percent, effective with shipments on or after February 22. The industry had previously increased the price for uncoated recycled paperboard by $50/ton and bleached board products by $40/ton.
The converters have all absorbed a 40% increase in the cost of recovered paper.
Another cost pressure is the price announcements for Old Corrugated Containers (OCC)increasing in January from $80 to $110/ton.

Monday, February 01, 2010

All Uncoated Producers Advance Pricing

Consistent with our previous releases, as of today, Domtar and NewPage
announced $40/ton price hike on its offset grades, effective Feb 22.
Others, including International Paper, Glatfelter, Finch, Flambeau, and Grays Harbor have already announced similar price hikes on offset grades. Georgia Pacific, Boise, Suzano, Soporcel have limited their efforts to cut-size office grades. The continued rally in pulp prices is pressuring margins at nonintegrated mills.

Will Books Printers loose to Electronic Devices

Verso Digital recently presented their findings on a survey based on millions of Internet users and found that avid readers forecast they will split purchases between print and electronic. Most of the 'avid' reader group is over 45 years of age (66%). Only 28% of those in the 18+-age bracket are avid readers. 27% of avid readers are not willing to pay more than $10 and 37% not sure how much they would pay.
Apple just announced the IPAD device. I note Apple has revolutionised computers, cel phones, MP3 players - and could now create lure to grow the audience for EReaders.
In any event - more EReaders mean less paper consumed, in an already depressed market for demand.

Friday, January 29, 2010

Top 2009 Printers

The top printers by category for 2009 include
Printer / Segment Sales –Millions-$USD / Total Sales –Millions -$USD

Publication Printers
Worldcolor /$884 / $4,017
QuadGraphics / $861 / $2,266
Conveco /$352 / $2,200
Brown / $332 / $415
Publishers Press /$222 / $234

Catalog
QuadGraphics /$1,110 / $2,266
Worldcolor / $522 /$4.017
Arandell / $267 / $287
Consolidated /$115 / $1145
Sheridan / $94 / $348

Book
Worldcolor / $482 / $4.017
Courier / $280 / $280
Arvato / $266 / 321
Taylor $113 / 113
Walsworth Pub $98 / $115

Direct Mail
Cenveco $550 / $2220
IWCO / $252 / $252
Consolidated / $172 / $1,145
Worldcolor / $161 / $4,017
Segerdahl / $158 / $175

Finding the Right Printer Partner

These are difficult and challenging environments in the paper and printing markets, it is important to review your printing platform to assure you are still as cost competitive as possible
-Does the printer’s equipment still fit your publication?
-Do you still invite competitive printers to quote your publication?
-Is your printer still financially stable?
-Where has the printer downsized? Has this area effected your publication?
-Slower response from CSR, no new ideas on distribution, the paper buyer has not recommended any alternative papers, etc.
-Is your printer taking the correct steps to be environmentally friendly?
-Has your printer invested in new technologies?
ALSO,
-Have you considered more cost effective alternative papers?
-Lower brightness; Uncoated Supercalender instead of coated, lighter basis weight, self-cover, Groundwood containing /LWC in stead of a 'free; sheet.
-Have you reviewed reducing the size of your publication or fewer pages?
-Are you still distributing to nonrevenue producing subscribers?
It's January, start the year by reviewing all your vendors to confirm they are still competitive and partner up with your vendors to mutually create ways to save money.

Please, Click on PAPER NEWS for all the news on paper

Wednesday, January 27, 2010

Uncoated Shipments down in 2009

Total Uncoated Free shipments were down -11% for 2009 to 9.7Million tons. USA imported 855,600 tons for 11 months - 16% lower than last year and exports declined 6% at 779,300.

Uncoated Recycled Board Prices Increase

Graphic Packaging International announced a price increase of $50 per ton on all grades of PaceSetter(R) uncoated recycled board (URB), effective with shipments after Feb. 18.
The company is one of the largest producers of folding cartons and holds a leading market position in coated-recycled boxboard and specialty bag packaging.

Coupon Clipping – Hope For Newspapers?

The recession of 2009 saw consumers begin to use more coupons than in recent years, in fact, it was the first increase in 17 years. Shoppers turned to both the newspaper as well as online and cell phone applications to find coupons. Of particular note was online coupon access increased 92% and redemption shot up 360%, although the Internet still accounts for only 1.5% of coupons redeemed, according to a report from Inmar. Despite the rapid rise of online coupons, newspaper inserts still account for 89% of coupons distributed to consumers and more than half of coupon redemption. Web sites accounted for 0.3% of coupons distributed to consumers and 1.5% of redemption. 19.6% of online coupons are redeemed and it is estimated that consumers redeemed a total of 3.3 billion coupons in 2009, a 27% increase from 2.6 billion in 2008.

World Color Sold for $1.4Billion to Quad/Graphics

From Company release.
Quad/Graphics Inc., the largest privately held printer in the US, will acquire Montreal based, World Color Press Inc. for an estimated $1.4 billion. The deal will close in the summer when the expanded Quad/Graphics will become the 2nd largest commercial printer in the US behind RR Donnelley & Sons Co. Worldcolor shareholders will own 40% and Quad/Graphics shareholders 60%. Quad/Graphics CEO Joel Quadracci, age 41, will lead the combined entity as chairman, president and CEO. Worldcolor’s CEO, Mark Angelson will be named to the board and oversee the integration. Worldcolor prints magazines like Sports Illustrated, Rolling Stone, The Crate & Barrel catalog and Yellow Book Directories. Quad/Graphics’ clients include Newsweek, GQ and the LL Bean Catalog. In the 12 months through Sept, their combined revenue was $5.1 billion.

Tuesday, January 26, 2010

December Paper Shipments Up

Excerpts from AFPA report

The official report from AF&PA outlined USA shipments of Printing and Writing Paper increased 6% in December versus December 2008, the 2nd consecutive increase, with all 4 grades reporting an increase for the month. YTD shipments were down 15%. USA purchases (shipments + imports less exports) also increased in December, up 3% vs. 2008, but still down 17% YTD. Printing and writing inventory levels decreased 2% or 41,000 in Dec09 vs. Nov09.

China Continues to be a HUGE consumer of Pulp

In 2009, China imported a record high 13.7Million tons of market pulp, increasing 44% over the 2008 deliveries. The extra demand was consumed by the new machines starting up without domestic fiber. Most exerts in the industry believe the Chinese will continue to grow their purchases of market pulp, despite less worldwide supply and increased prices. There has also been an increase in pulp consumption in India with solid demand in Bangladesh, Pakistan and Vietnam. Suppliers in Brazil and Indonesia had pulp availability decrease due to flooding, while Russian suppliers had unusually frigid temperatures, slowing production.

Chinese Continue Uncoated Expansion

Three new pulp & paper investments in China announced by Guangxi Yongkai Sugar and one by Guangxhi Huacheng Paper adding almost 1Million TPA of uncoated paper. China, now the largest producer of uncoated papers, also continues to witness increases in consumption.

Monday, January 25, 2010

Uncoated Price Increase Announced by ALL!

Last week we announced Domtar increased their price and, as assumed, most of the uncoated white paper mills joined Domtar in reporting a price increase for late February or early March. Most increases were $40/ton, the exception is Wausau which we reported as $60 for text and cover grades. Domtar and Boise told customers they would only increase cut-size business papers; however, International Paper, Glatfelter and Finch extended the increase to offset rolls, tag/index/file folder stock and other converting grades.

Newsprint Producers Hope for Improvement

The year 2009 was not kind to many paper markets, and Newsprint was hit especially hard. After a reduction of 14% in 2008, demand continued to erode another 24% in 2009. Electronic communication has truly hurt this industry. Capacity continues to outstrip demand, despite reduced pricing and plant closings. AbitibiBowater continues to operate under chapter 11 - commanding 43% of the market, White Birch is #2 at 22% - failed to pay an interest debt due last Fall, and Port Huron - filed for bankruptcy protection. Even if the economy improves, will end users go back to newspapers for news, classified advertisements, and coupons?

Friday, January 22, 2010

Printing Sales Continues Down in 2009

The NAPL reported that US commercial printing sales were down -16% in 2009 to $72Billion. The rate of decline slowed significantly since last summer, with a forecast for 2010 of rising +2 to 3% to $73-74 billion. NAPL forecasts a slow recovery, not hitting its stride until later in the year.

NY Times Charges Fee for Online News

The New York Times announced they will soon charge non subscribers for heavy use for attaining news on their website. The company will continue to provide free content for a limiting number of articles and print subscribers will continue to have free access to the site. Under the new metered model, a viewer can read a certain number of articles per month free before being charged a flat fee. This is a similar model to The Financial Times. The exact cost was not confirmed. Note, the NYTimes is one of the most popular newspaper site in the country (over 17 million readers) . The Times will begin charging in January 2011.

Catalyst Paper to Idle Paper Machine

The Catalyst Paper Company reported that the 1PM at its Crofton mill in British Columbia will be curtailed indefinitely due to weak newsprint and directory paper demand.
The machine has a capacity of 140,000TPA of commodity grades and was temporarily idled on December 23, 2009 for the holiday period.
The mill has an annual production capacity of 200,00TPA of newsprint and 210,000TPA of directory paper, along with the capacity to produce 343,000TPA of NBSK pulp.

Newsprint Machines Still Feel Results of Poor Demand ?

Throughout the last several years, Coy Paper has reported on shuttered newsprint equipment. Today, we confirm AbitibiBowater’s Fort Frances mill in Ontario will now be shut down indefinitely due to an effluent problem. They will remain down until they are in compliance with all laws and regulations. ?
Stora Enso will restart the #2 paper machine at Varkaus Plant in Finland after having been down for 6 weeks. The stop was due to market related down time. The Varkaus, facility has a capacity of 290,000TPA of directory paper and newsprint, while PM #3, which has remained running, has 310,000TPA capacity.

Wausau to Increase Paper Prices

Monday, March 1, 2010 Wausau Paper will increase the base price of the following grades by $2.00/cwt:
Exact Index; Exact Vellum Bristol; Exact Tag; Exact Opaque Colors; Exact Multipurpose

Wednesday, January 20, 2010

Uncoated Prices May Increase

Domtar just announced a $40/ton price increase on their business paper cut size grades, effective February 15. So far, this is the only grade line to be increased. We can only assume that all Domtar’s competitors will follow; especially in that demand is improving including December 2009 vs 08 shows shipments +1.2% ( this is the first positive comparable since April of 2007).
Certainly raw material costs including pulp prices and energy continue to surge. Also,inventories at both the mills and the merchants are down 20% down from this time last year. Lastly, recall International Paper and Domtar will close 800,000TPA of capacity by mid-2010, representing 7% of North America’s Uncoated Free Sheet capacity; furthermore, the artificial support from the black liquor credits are gone (that was $8Billion in 2009!!). All indicators that the price increase will most likely stick.

Containerboard Pricing is ‘on the move’

A price increase for both the East and the West Coast was announced in December for January shipments. We think these price increases might actually happen, or at least $25-30/ton of the announced increase; the balance will most likely be absorbed in the February / March time period. Although demand has not appreciably picked up, raw material costs certainly have increased, thus, creating this 'forced' increase.

Reader’s Digest on Target to end Bankruptcy

Reader’s Digest just reported that their restructuring plan was approved and the company could exit bankruptcy by January 31. The company’s debt would be reduced from $2.2Billion to $550Million and the retirement for past employees would be modified. They will reduce headcount and move headquarters to a more efficient faculty.

NewPage Appoints New President and CEO

From NewPage News Release
NewPage Corporatio announced that Richard D. Willett, Jr., President and Chief Executive Officer, has resigned from NewPage effective immediately. Mark A. Suwyn, former Chief Executive Officer and currently Executive Chairman, has been elected to serve as Chief Executive Officer until a new Chief Executive Officer is named.

NewPage is headquartered in Miamisburg , Ohio ,and is the largest coated paper manufacturer in North America , based on production capacity, with sales of $4.4 billion. The company's product portfolio is the broadest in North America and includes coated freesheet, coated groundwood, supercalendered, newsprint and specialty papers.
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.

Friday, January 15, 2010

December saw Improvement for Printing and Writing Papers

Printing and writing paper shipments improved in the USA for the month of December. Total shipments yielded 1.478Million tons, up 2.8% vs. November and 5% higher than last year. Full year shipments decreased 15.6% to 17,000 tons. Coated mechanical rose 15.5% to 306,300 tons and coated freesheet rose 12.1% to 256,500 tons vs. 2008, with both increasing vs. November YTD, both were down almost 20% with coated mechanical at 3.2Million tons and coated freesheet down to 3.25Million tons. Uncoated freesheet rose 1.2% vs. December 2008 to 752,399 tons, with YTD volumes down 11.6% to 9Million tons. Uncoated mechanical remained stable vs. December last year, at 131,800 tons, but dropped 21.8% YTD to 1.6Million tons.

Canon Still Progressing in the Acquisition of Oce

Canon, the Japanese maker of cameras, copy machines and other electronics and
Oce, which sells printers and copiers and has relied heavily on sales to banks and architecture firms are on target for Canon’s $1.1Billion purchase. The over riding objective is to be the #1 presence in the printing industry. The combination will yield a huge sales network in Asia, Europe and the USA.

The combined Canon-Océ will be up against competition from Fuji and Ricoh to dominate the European, USA and Asian markets. Canon’s acquisition comes just a year after Ricoh bought Ikon Office Solutions, based in Pennsylvania, for $1.62 billion.

Cenveo Plans to Close Another Plant

In addition to Cenveo closing its Charlottesville, VA printing plant, which they obtained through the purchase of Cadmus Communications they will also close the Baltimore commercial printing plant in February.

Wednesday, January 13, 2010

Subscribe to the P. Scott Vallely Pulp and Paper Blog

You can now have these timely releases come directly to you.
All new – you can now subscribe to Coy Paper’s Pulp and Paper Industry News releases and have them come directly to your computer – for free go to http://psvallely.blogspot.com/ on the lower right side click on FOLLOW and you will automatically receive this blog. The Current News on the Pulp and Paper market and Industry is a daily read by hundreds of professionals in the industry as well as research analysis’s and investors.

Magazines Post 25% Decline in Advertising Pages for 2009

The Magazine Publishers of America’s Publishers Information Bureau (PIB) reported on advertising pages for 2009. Pages were down 25.6% and revenues closed at $20Billion, which means a decline of 18.1%. The New York Times reported total magazine advertising pages were down over 58,500 pages when they compared 2008 page count to ad pages in magazines that were still published in 2009. Only 18 magazines enjoyed an increase of advertising pages.
The biggest decliners were financial, insurance and real estate ( down 41.4%) and automotive (down 40.5%). Estimated revenues were down in all categories except for food and food products, which posted a slight 1.4% gain.
PIB also noted that the advertising page reduction experienced in 2009 was so severe that many of the surviving publishers lost focus on their dependence for advertising revenues and, instead, began to concentrate on digital editions.
Fewer advertising pages translate into a decline in overall page count and thus less paper is consumed. If advertising in publications do not improve, difficult to forecast much advancement for publication paper demands.

Monday, January 11, 2010

Will 2010 be Better than 2009 for the Paper Industry?

The year, 2009, certainly created several challenges for the paper industry. Paper producers did a remarkable job of limiting price erosion despite sharply lower shipment volumes and variable (usually up) raw material costs. The industry responded with massive amounts of market downtime, as well as a significant amount of closures, in many cases even driving down inventories despite weak demand.

Although the last few months of 2009 illustrated some improvement; sustained improvement will only arrive once the economy improves. Keep in mind, 2009 paper demand continued to be lower than 2007 and the beginning of 2008.

The paper manufacturers continue to operate along a slippery rope – recently most grades experienced an announced price increase; meanwhile, demand continues to be below expectations, supply was controlled by down time (this is not sustainable ), input costs such as chemical, energy, and transportation are forecast to increase, and the infamous black liquor credit (worth billions of dollars) is gone.

I think we all agree that for the industry to be healthy, long term, a price increase is needed; however, most buyers are aggressively pushing back due to the inability to pass it on to their customers.

Of particular note is the containerboard price increase – without consumers buying 'stuff' – nothing to go into the box – therefore demand is forecast to be depressed. The other two markets sharing concern are the price increase for publication and newspaper papers. Both are hurting from lack of subscribers and depressed advertising.

Anyone of our Coy Paper Company News on the Pulp and Paper readers care to comment on forecasting 2010 prices, demand, and supply; also, venture an opinion on next mills to close?

Friday, January 08, 2010

Two of the Biggest Publishers to Mutually Buy Paper

Two of America's largest magazine publishers, Time Inc. and Meredith, have reportedly joined forces to buy paper. The two companies issued joint requests for proposals to potential paper suppliers late last year, according to several sources.
Together, the two consume several hundred thousand tons of paper, annually.

Time is a major buyer of lightweight coated (LWC - 29lbs to 32lbs ) for offset printing. Meredith's is more geared to rotogravure papers and higher basis weights. This will introduce added pressure for pricing on an already depressed market.

US Department of Commerce Delays Anti-Dumping Decision

Department of Commerce announced it will delay the decision on the countervailing duties against Chinese and Indonesian paper producers until February 22nd. The Department must determine if the imports from the two countries caused injury to USA paper producers and originally reported the decision would be made by mid December.

Recent Happenings on Publications

-Penton Media has ceased publication of the print editions of American Machinist and Welding Design & Fabrication
-Consumer business and finance magazines had a rough go in 2009. Collectively, the titles tracked by PIB saw advertising pages fall nearly 30 percent.
-Reed Business Information has ceased publication of three trade titles: Video Business, Manufacturing Business Technology, and Industrial Distribution.

Thursday, January 07, 2010

China’s Yueyang Paper Machines start up

Following up on the Coy Paper earlier releases, in August, Yueyang started up #10PM and in October #9 PM started up. Both continue to run trials and reports outline the paper looks fine. Both have a capacity of 200,000TPA each of uncoated paper. #10PM will focus on recycled business and offset papers while #9 will supply the same papers from virgin fiber. The plan is for #10PM to eventually produce papers from 100% deinked pulp (most of the raw stock coming from USA).
In 2008 China produced 79.8Million tons of paper and paperboard – an increase of nearly 13% annually since 2000. Of this production, China consumed 13.85Million uncoated printing and writing tons in 2008 and produced 14Million tons.
At 400,000TPA of new capacity, the Chinese must have America in their scope for exporting paper.

Race is on for Digital versus Print

Forrester Research has just revised up its May 2009 forecast of this year’s U.S. eReader sales to 3 million units from 2 million, due to strong sales in November and December. Moreover, it now expects sales of another 6 million units in 2010.

Top 10 In-plant printers in USA

2009 Top 10 plants in USA by revenue include
US Government
Allstate Insurance
State of California
State of Washington
CVS/Caremark
Ohio State University
Spartan Stores
University of Oklahoma
Louisiana State University
University of Washington

Wednesday, January 06, 2010

Glatfelter buys Concert Industries

Glatfelter agreed to acquire the nonwoven producer Concert Industries Corporation from Brookfield Asset Management Inc. for $235Million, expanding the specialty paper company's markets, especially in developing markets beyond the USA. Concert is one of the world's leading producers of highly absorbent and customized airlaid. The airlaid line is one of the best options in the marketplace in terms of high absorbency. The company's unique production process allows products to absorb more moisture than common cellulose, yet it is lighter, more durable and cost competitive, especially when compared to similar weight non-wovens.
Concert Industries has operations in Canada and Germany with a total
capacity of 84K tons.

Print Volume up Slightly in Third Quarter

Dr Webb recently published a report on the printing industry. A few highlights-
"The third quarter of 2009 continued a positive turnaround from a disastrous Q1,” said Dr. Webb. “The industry has had significant declines in volume for the last year, and has cut back staffing levels at a slightly faster rate than those sales declines. It may now be finding the right balance of productive capabilities, declining shipments, and price pressures of electronic media.”
In the report, Dr. Webb reviews the latest trends in shipments, profits, and capacity measures for the industry. He also discusses how it is likely that in the next six months the recession will probably be declared as over. “It is likely that the fourth quarter of 2009 will be identified as the recession's end."

Folio Profiles 2009 Magazine Industry

Coy Paper has reported on all the challenges last year for the paper markets. 2009 certainly proved to be a challenge for anyone associated with the publishing world. The year outlined economic fallout, bankruptcies, dwindling advertising dollars, shuttered magazines, layoffs, pay cuts to name a few. Folio reports on the industry as 2009 unwinded
2009 profile on the magazine industry world link Click on link

Tuesday, January 05, 2010

Leader in E-reader Display Manufacturing Owned by Paper Company

Excepts from recent RISI research paper.
Prime View International (PVI) is the leader (66% market share) in supplying displays used in e-readers such as Amazon.com’s Kindle, Sony’s Reader and Barnes & Noble’s Nook. PVI is owned by Taiwan’s largest paper manufacturer, Yuen Foong Yu, which launched this technology division 17 years ago, as they became worried about digital replacing print. After facing tough competition in the LCD market, they’ve spent over a $1Billion on e-screen development and acquisitions, purchasing screen technology from Philips Electronics in 2005 and E Ink Corp. of MA last June. Worldwide sales of e-readers are expected to soar to 12 million units in 2010, up from 5 million in 2009. Many of these will be made by competitors, able to show video with full color screens such as Apple’s Tablet and Qualcomm’s new screen technology called Mirasol.

AF&PA and NPTA Merge for One Meeting

The American Forest & Paper Association (AF&PA) and the NPTA are joining forces to host a combined conference March 21-23, 2010 in New York City, called PAPER2010.
Also know as 'paper week'.
The AF&PA is the national trade association of the forest products industry, representing pulp, paper, and wood products manufacturers, and forest landowners. The NPTA Alliance (formerly the National Paper Trade Association, Inc.) is the association for the $60Billion paper, packaging and supplies distribution industry.

Reader’s Digest to Launch Three New Health Magazines?

Reader’s Digest plans to launch three new magazines called Reverse Diabetes, Walk it Off, and No Fail Weight Loss All three will be sold as part of a single-sponsored package in the health sector. The magazines will be published 4 times a year.

International Paper Shutters a Paper Machine

As Coy Paper recently announced, International Paper just closed its uncoated freesheet (business papers) paper machine #1 in Franklin, VA. This past Fall, the company announced that they would close the mill to reduce production capacity. In November, company stopped production on its # 6 paper machine.

Monday, January 04, 2010

Conde Nast Considers a New Magazine

Finally, some good news for the ailing magazine industry. Recall, we reported on Conde Nast having to close six consumer magazines, including Gourmet; reduced costs 25%; and making several reductions in their workforce – have announced they are working on a trade magazine for the men's' fashion market. This new title may be marketed as a trade publication and not a consumer magazine.

Reed to Close Publications

Reed Business Information has been marketing the sale of the USA magazine group and has yet to confirm a buyer for the complete division. The current decisions are to close several publications, or sell them individually – or begin to lay staff off.

Wednesday, December 30, 2009

More Permanent Closures announced by International Paper

From International Paper Release
International Paper announced plans to close its paper mill operations in Franklin, VA, and its containerboard mills in Pineville, LA, and Albany, OR. The company also announced it would permanently shut down the previously idled No. 3 machine at its Valliant, OK, containerboard mill. The Valliant Mill's other two machines will continue to operate. These permanent shutdowns will reduce the company's North American paper and board capacity by 2.1 million tons.
The company concluded that we have excess capacity in our North American paper and packaging businesses, and these decisions will better match our supply with our expected customer demand.
Since the onset of the global recession, the decline in demand for International Paper's uncoated freesheet in North America has accelerated, and consequently the company has decided to further reduce its uncoated freesheet capacity.
In its containerboard and coated paperboard businesses, International Paper expects demand to resume growth as the economy rebounds. However, the company's demand is not expected to return to 2008 levels in the near future. Therefore, permanent International Paper capacity closures are necessary.
The closures will impact about 1,600 employees and will result in permanent North American capacity reductions.
Following these permanent shutdowns, International Paper will have approximately 10 million tons of North American containerboard capacity, 2.6 million tons of North American uncoated freesheet production capacity, and 1.7 million tons of North American coated paperboard capacity. These capacity shutdowns will not impact the company's ability to serve its customers.

MeadWestvaco Downsizes 14 plants

MeadWestvaco reported they will restructure fourteen facilities in their global packaging markets group. ??These actions include further reducing corporate and business unit overhead expenses and closing or restructuring 12 to 14 manufacturing locations. This will result in the elimination of approximately 2,000 positions, or 10 percent of MeadWestvaco’s global workforce in 2010.
The company also announced they will not provide 2009 pay increases for salaried employees. The manufacturing-related reductions will include savings from facility restructurings and closures. The company feels that rationalizing assets as outlined will accommodate reduced demand and corporate financial objectives.

Caraustar Industries out of Chapter 11 bankruptcy

This week's big announcement was Caraustar Industries, Inc. has emerged from Chapter 11 as a newly reorganized private company eliminating approximately $135 million in debt.
The company’s Plan of Reorganization had minimal business disruption and was completed in record time. Caraustar also reported to have closed on a new $75 million revolving credit facility to provide adequate liquidity to meet all of its working capital needs, including any future capital investments.

Tuesday, December 29, 2009

2010 Paper Prices Might Increase

The year 2009 was certainly a challenge for the pulp and paper industry – slow demand and constant pricing pressure. Paper prices experienced a steady fall for most of the year and now appear to be leveling off. Several producers, and Coy Paper Company, are forecasting a gradual price increase for most grades for 2010. Demand might only slightly rebound, but raw material costs such as pulp, chemicals, transportation and energy will increase. Inventory levels, both at the mill and the end user, are down and manufacturers continue to curtail supply and imports are down. Lastly, support such as the ‘black liquor’ credit is gone. Therefore, even if demand does not increase, there are plenty of other reasons for paper prices to rise.

USA Consumption of Recycled Fiber Up

The AF&PA recently reported that recycled fiber consumption in the USA was 2.5Million tons in November, an increase of 0.9% vs. last month and an increase of 0.8% vs. 2008. This trend is expected to continue.

Release Liner Highlights

Release liner is the material that many labels (pressure sensitive) include as a backer sheet. This is the component of the label, which is used as a carrier and discarded once the label is consumed.
-World consumption – all release liners – 31Billion sq. meters
-Growth is less than 1%/year
-Super Calendar Kraft #1 material (44% of the market)
-Films increased to 20% of the liner market
-Clay coated now 13% of the market
-Linerless labels have failed to be successful
-Total label growth 2.1%
-Glue applied + 2%
-Pressure Sensitive +1.8%

USA Post Office for 2010

In our past releases we reported the USPS lost $3.8Billion for 2009Fiscal, which was $1Billion more than 2008. Total mail volume was 177.1Billion pieces – down 25Billion (12.7%) from the 202.7Billion pieces in 2008. Concern for 2010 is people learned to order product on line, accept digital communication as well as business invoices, correspond on email, and think greener – no longer accepting catalogues and direct mail promotions. The USPS needs to revise its model for fewer pieces mailed and accept this as a trend.


Please, also, click PAPER NEWS for all the news on paper


Tuesday, December 22, 2009

Rail Shipments Down with less Paper Demand

North American Rail freight volume of pulp and paper decreased and YTD carloads were down 20% through November. Last week, the Senate Commerce Committee passed comprehensive freight railroad reform legislation designed to increase competition and improve federal regulation of railroads. It is estimated that 30% of US paper, packaging and wood product manufacturing sites have access to only a single rail carrier. This monopoly status has led to high costs with poor customer service.

Will the Increased Containerboard Price Stick?

Pressure continues to mount for producers of container board after all the major North American manufactures announced the $50/ton price hike in the East and most producers are pushing for $70/ton in the West.

Demand continues to be weak – slow economy means less goods purchased and therefore, box volumes fell 12% year to date through November. Most buyers are trying to push back on price increases.

However, given the large supply reductions (recall our earlier blog that International Paper, Smurfit, and West Fraser will shut off 2.7Million tons) perhaps the price increase has a chance.

More Pulp Price Increases

Recently, Deutsche Bank hosted a conference on the pulp market and declared that after pricing had held flat for the month of December, the major softwood and hardwood producers once again announced price hikes of $20-30/mton in the US, Europe, and Asia, effective January 1.


Producers set NBSK price at $850/mton (+$20/mton) in the US, $830/mton (+$30/mton) in Europe, and +$20-30/mton in Asia, with China at $720-730/mton. China had been heading up the robust demand for pulp because of low inventories and tight supplies, but suddenly there are reports of slowing demand in China – perhaps the pipe line is finally full. Also, China started up 6 new pulp machines during the 2H2009 and 3 more will come on line 1H2010. China's new production will increase to 2.6Million tons of pulp by the end of 2010. Most North American buyers report that pulp remains fairly tight in supply due to equipment curtailments, especially Hard Wood. These same buyers predict this tightness will not last and a price correction will occur 2Q10.

P. Scott Vallely on CBS

Joe Connelly of the Wall Street Journal interviewed Mr. Vallely about the Paper.com site, one of the largest web marketing sites that focuses exclusively on selling paper. He commented on the success of the site to date and the recent initative to now market Paper.com for sale. Any interested buyers should email the management team at admin@paper.com . The interview was aired on WCBS radio 880.

Monday, December 21, 2009

China’s Sun Paper Announces Another Paper Machine

Sun Paper will build a $228 million, 300,000 TPA, uncoated mechanical (groundwood) paper machine at the Yanzhou City mill. This machine (PM24) will make publication papers in a basis weight range of 60-150 g/m2, in 2011. This will follow the installation of PM23, a 350,000TPA uncoated fine paper machine being installed in April 2010.
Sun currently produces 450,000 TPA of uncoated woodfree and mechanical paper, 100,000TPA of coated woodfree paper, and 300,000 TPA of cartonboard from this facility.

AbitibiBowater Restarts Another Paper Machine

AbitibiBowater reconfirmed that they plan to restart paper machine #5 in Thunder Bay, ON in early February. The 250,000 TPA newsprint machine was shut down indefinitely in August, along with PM #4, 160,000 TPA.

Update on Canadian Paper Market

It’s no secret, like the USA paper producers, Canada has also struggling with overcapacity and decreasing demand. The forecast is for the Canadian industry will lose an aggregate C$1.2 billion this year and the industry will not return to profitability until 2011. American Forest & Paper Association data show that the volume of shipments to the U.S. from Canada fell from 18% to 75% in various key paper categories during the first three quarters of 2009, versus the same period of 2008.

Canada has always been a world leader in Newsprint production with a capacity of over 10Million tons; however, newsprint makers estimate they will have only shipped closer to 7.2 million tons by year end. The future is not predicted to be much better with consumption at between 6.8 million and 6.9 million metric tons next year, and somewhat lower still in 2011.

Thursday, December 17, 2009

More optimism - 2010 Improvement in Paper Industry

The Fitch Rating Organization recently forecast a modest recovery for paper in 2010. The rating service reported that short term demand for uncoated freesheet (UFS) and coated mechanical paper (LWC – Publication paper) are stabilizing and expected to rise later in year. Unfortunately, coated freesheet and uncoated mechanical (groundwood) is projected to experience slow demand Paper margins will continue to be squeezed by the rising cost of pulp, possible transportation and chemical price increases, and lack of black liquor credits.

2009 Results in Fewer Magazine Closures

MediaFinder.com reports fewer magazine closures in 2009, 428 vs. 613 in 2008 and 643 in 2007. The number of launches also decreased to 275 in 2009 from 335 in 2008. Regional magazines had both the highest number of start ups, 21, and shutdowns at 34. Business-to-business magazines saw 120 closings in 2009, less than 147 in 2008 and 158 in 2007. There were 85 b-to-b launches in 2009.

Wednesday, December 16, 2009

Another Prospective on the Paper Market

To compliment our report earlier this week on our Coy Paper news releases, we offer 'heard on the streets' comments that US Printing/Writing Paper demand and shipments were up 2.5% in November primarily driven by strong coated paper shipments.
November shipments of 1.435Million tons was the first monthly 2009 vs 2008 increase since February 2008 (vs. 2007). Total shipments YTD were 15.612 million tons, down 17% vs. 2008.
-Coated freesheet was up 10.4% to 293,600 tons in November
-Coated mechanical (LWC - publication paper) up 14.7% to 285,100 tons.
-Uncoated freesheet was stable at 714,800 tons, down 0.5% vs. last year. November shipments were down vs. October, due to seasonality.

Tuesday, December 15, 2009

Smurfit Finally Announced Down Time

Smurfit-Stone has announced 900,000 tons of permanent linerboard capacity closures at two locations.
-Ontonogan, MI corrugating medium mill (280,000 tons)
-Missoula, MT mill (620,000 tons)
Smurfit news follows the recent announcement that International Paper will shutter 1,400,000TPA of containerboard capacity and West Fraser's announcement of 450,000 tons
of capacity.
The producers will most likely continue to adjust supply to demand which will assist the recent price increase.

Magazines raise Cover Prices

Revenue generated from advertising pages is forecast to continue to be depressed. Accordingly, several publications look to survive by increasing the cover price for the magazine.
A few examples include-
-Condé Nast - The New Yorker, Golf Digest and Teen Vogue in 2010,
-Hearst - Good Housekeeping, Esquire and Veranda and is considering the same for Country Living
-Wenner - Men’s Journal and Rolling Stone
-Meredith - Better Homes and Gardens and Ladies’ Home Journal, Family Circle and Traditional Home
-Rodale is looking at doing the same at its health/fitness titles
Publishers are also reviewing decreasing the frequency they print magazines in an effort to save money.

Price Increase for Bleached Board

The producers of Solid Bleached Sulfate (SBS) board grades are beginning to tell end users about increasing the price by $40/ton. Although these grades have not had an increase since October 2008 (transaction price $1000-1050/ton), they also have not had to discount pricing like so many other paper grades during 2009. So far Georgia Pacific and MeadWestvaco have formally announced.
Recall MeadWestvaco shuttered a 200,000TPA paper machine in Texas and International Paper will close a 140,000TPA machine in Virgina.

Monday, December 14, 2009

Market Update Illustrates Optimism

Exempts from Deutsche Bank - Equity Research

The printing and writing paper shipments for November look dramatically improved versus at this time last year. The American Forest & Paper Association released market data. Deutsche Bank cautions that a good portion of the improvement owes to a "lapping" of weak numbers
from 4Q2008. Nonetheless, the numbers are striking and could signal the beginning of an inflection point in white paper markets. The best year over year comparables were in light-weight coated paper (LWC), where preliminary data suggests shipments were up 14.7% (-22.4% YTD). Spot discount pricing for LWC are slowly increasing.
Heavier-weight coated free sheet shipments were up 10.4% (-20.7% YTD). Uncoated free sheet shipments were down -0.5% (-12.6% YTD). The smallest category, uncoated groundwood, had the weakest performance with shipments down 15.0% (-23.4% YTD). Sequentially,
shipments in all markets were down from October levels. Much of that month to month easing would appear to be seasonal as the holiday printing season begins to ebb.

As noted industry shipments are now lapping 2008 shipments. Thus, enthusiasm should be tempered. Moreover, we think coated and uncoated free sheet markets remain vulnerable to
ripple effects from pending capacity start-ups of some 4.5MM tons in China as well as capacity overhangs in other markets. Quick note on pulp, looks like price increases have slowed, and demand has stabilized – China buying less and global inventories in balance.

Japan Exports to China to slow as China Adds Paper Capacity

In the next two years, China plans to add 4.6Million TPA of paper capacity,
-2,600TPA being coated woodfree
-2,000TPA uncoated.
The 4 manufacturers of coated paper
- Jinhai Pulp & Paper (APP China) 900,000 tons
- -Shandong Chenming 800,000TPA
- -Shandong Huatai 500,000TPA
- -Oji Paper 400,000TPA
Uncoated paper will be in balance with demand, because many smaller manufacturers are being consolidated into the larger ones, and there is growth enough in China to absorb the rest.
The coated market, however, is all new capacity. The high growth Chinese market will eventually absorb the excess by the end of 2014. In the meantime, they will be forced to find external markets for excess capacity and/or suffer low operating rates.

In 2009, Japan was the fastest growing market for Chinese exports, increasing 400% or 145,000 tons vs. last year. Japan’s paper producers have had difficulty competing on price, however; recently they have become competitive, resulting in October Chinese imports to Japan dropping 21% vs. Sept. The extent to which Chinese coated exports will be affected by the US anti-dumping investigation or fears over Dubai, will determine where the excess tonnage is sold in the next 2 years.

Friday, December 11, 2009

Paper.com Looking for Buyer

Paper.com LLC operations, arguably the largest web based paper marketing company, recently commissioned Moniker to secure buyers for the site. Paper.com has over 40,000 paper items and thousands of visitors each day; the site has nearly 2000 affiliate marketers and a category 'killer' URL address is now for sale. Contact admin@paper.com

Neilson Sells Magazines

Nielsen Business Media has agreed to sell eight of its media brands, including a number of its trade magazines, to e5 Global Media, a new company formed by Pluribus Capital Management and Guggenheim Partners.

The sale agreement includes The Hollywood Reporter, Billboard, Adweek, Brandweek, Mediaweek and Back Stage magazines, as well as Nielsen’s Clio Awards and Film Journal International. Also being sold is the Film Expo Business, which includes the ShoWest, ShowEast, Cinema Expo International and CineAsia trade shows.

Financial terms of the deal were not disclosed, although it was rumored to be priced at approximately $70 million

Two More Paper Mill Closures

This week, beyond the Paperlinx machine shut downs just reported, two more companies officially announced downtime. Note, most paper producers are constantly curtailing manufacturing due to poor backlogs - just not formally announcing it.
-Sappi Fine Paper to close Kangas Mill in Finland by 1Q 2010,.
-Nippon Paper Mill Down for 2 Weeks in Port Angeles, WA, this is the third shutdown this year.

Thursday, December 10, 2009

St. Mary’s Paper Plans Downtime

St. Mary’s Paper in Sault Ste. Marie, Ontario will idle paper machines #3 and #4 during the 1Q2010. PM #5 will remain operational. Management sited poor demand as the reason for this market related downtime.

The mill produces 240,000TPA of SCA premium, SCA and SCB paper grades under the trade names Sequence, Sequel and Synpress


PaperlinX Departs from Paper Manufacturing

Australia's PaperlinX has decided to close its Wesley Vale pulp and paper mill and one of the two paper machines at its Burnie mill and therefore reduce production at Tasmanian paper manufacturing operations, The closures mark Paperlinx's exit from paper manufacturing. Upon completion of this exit, PaperlinX said that it will be solely a distribution company, distributing paper, signs, display and graphics materials, and industrial packaging.

The Wesley Vale Mill produces 40,000 TPA of pulp and 145,000TPA of coated and uncoated papers for publishing, business forms and printing
The Burnie Mill has a capacity of 140,000TPA of uncoated business papers.

Truck Companies Forecast Improvement

Although transportation companies, many of which ship paper products, experienced a challenging 2009, the forecast appears to favor the truckers; allowing them to charge more for full loads. Unfortunately, for the truckers, the less-than-truckload market looks like it will remain a buyers' market for the short term. Most clients have limited inventory and are requesting trucks to replenish stock to their floor. Transportation, both inbound and outbound, are important cost components when quoting a delivered price for paper.

Wednesday, December 09, 2009

Five Publishers go ahead with Plans to 'Go Digital'

As Coy Paper reported in past, Time, Conde Nast, Hearst, Meredith and News Corp. will create an industry standard platform for magazines, newspapers, etc… for full color, touch-screen digital format that is attractive and interactive for the the Internet, smart phones and e-readers.
These publishers collectively represent nearly 145Million consumers. This will be a subscription fee based initiative for full access and the objective is to establish a revenue stream from advertisers.

Top 10 USA Paper Companies Post Earnings

The USA largest pulp, forest, and paper companies posted earnings of $1.2Billion in the third quarter of 2009, versus $733Million in, 2008 for increase of $500Million. All but two companies posted positive or improved earnings. Note, this improvement was primarily a result of an estimated $1.1Billion of tax credits for the use of black liquor as a bio fuel to generate energy.

Tuesday, December 08, 2009

Newsprint Market update

As of today, the newsprint producers AbitibiBowater, White Birch, Kruger, and Tembec have all announced price increases for the coming months.
These major producers have announced a $25/mton price for both January and for February. Meanwhile Norpac announced a single $50/mton for January and Catalyst Paper also announced a $50/mton price hike for February. Although demand remains low, with USA Dailies suffering a decline of over 23.5% in October, the paper supply has been reduced. Given the equipment closures for the last few years, most buyers are forecasting that these increases will be paid. Coy Paper forecasts that additional newsprint price increases will be announced during 2010.

Containerboard Market Update

As Coy Paper has previously reported, all the major containerboard producers have announced a $50/ton price hike in the East and $70/ton in the West. This is a difficult increase for most converters to absorb, given the poor economy and lack of orders for packaging. This recent price movement is a result of large supply reductions. Coy Paper has reported on closures such as International Paper and West Fraser shuttering 1.8Million tons, a better demand for exports, and the expiration of black liquor credits - all placing pressure on mills for this increase.
A recent report outlined the black liquor credit could have assisted mills cost by as much as $180/ton.

Canadian Pulp and Paper Companies Report on Profits?

Eleven publicly traded Canadian companies reported combined third quarter loss of negative C$487 million. This was slightly better than second quarter of 2009 at negative $535.8 million and the first quarter of negative C$642.6 million. AbitibiBowater’s loss of –C$411.4 million contributed the most to the Canadian industry’s lack of profit. Only three companies were profitable in 3Q; Domtar C$62.5 million; Cascades C$35 million; and, Canfor Pulp C$11.4 million. All companies declined in sales, generating combined C$6.2 billion, down over 20% versus 2008 but up 1% vs. 2Q. AbitibiBowater (-34%), Catalyst Paper (-48%), Tembec (-28%) and Fraser Papers (-24%) had the worst sales declines in 3Q vs. 2008.

Hearst will Start Skiff Digital Reader Service

Sometime in early 2010, Hearst plans to start a digital e-reading service called Skiff, formerly known as FirstPaper. Skiff will sell digital versions of newspapers and magazines on electronic readers and other devices that have better graphics and look more like the print magazine, than Amazon’s Kindle. Hearst would be the first publisher with its own end-to-end digital publishing system including reading hardware.

Monday, December 07, 2009

Fraser Papers restructuring grades and name to Newco ?

Fraser Papers is reviewing the option of buying its core specialty paper business and renaming the new entity to Newco This will allow the company to exit creditor protection. The plan is to sell the assets of the core business in Edmundston, NB, Madawaska, ME and two New Brunswick lumber mills to the new entity, Newco. Than, the new company would dispose of remaining assets, owned by Fraser, including Gorham Paper Mill in NH, two lumber mills in Maine, and Thurso pulp mill in Quebec.

Recycled Fiber Costs Increase

Recycled fiber costs continue to increase and prices for old corrugated containers (OCC) have recently risen over $10/ton.
The continuous higher fiber costs could put pressure on many mills with a concentration of recycled grades.

Kraft Paper Price Increases

For the second time, Longview will increase its unbleached bleached kraft paper grades $50/ton.

Friday, December 04, 2009

Finally, Smurfit Announces Price Increase

Smurfit-Stone announced a price increase which mirrors the new price levels made by International Paper, Georgia-Pacific and Temple-Inland which Coy Paper reported on earlier. These four producers represent nearly 75% of the domestic containerboard market.

Sports Illustrated Goes E-Zine

Time Magazine’s Sports Illustrated publication is talking about transitioning the print magazine to a digital magazine-friendly e-reader.
Time Inc. has been working with Web site design firm Wonderfactory for Sports Illustrated and several of their other publications.
Time is also working on an application that would translate all of Time Inc.’s magazines to the iPhone. A pay model for the tablet versions have not been determined.

Four New Companies Joined AF&PA

The American Forest & Paper Association (AF&PA) announced that ArborGen, Grays Harbor Paper, Marcal Paper Products, and Thilmany Papers are the newest members of the Association. The forest products industry employs approximately 1 million workers and generates 6 percent of the total U.S. manufacturing GDP.

National Geographic's Adventure RIP

After 1o years, National Geographic has decided to close National Geographic Adventure because of the weak environment for print advertising. The circulation has decreased to 636,750 and the advertising pages declined 25 percent. Management has not ruled out e-magazines, mobile apps, awards and a Web site going forward.

Wednesday, December 02, 2009

Temple Inland Also Raises Price of Containerboard

Temple-Inland joined the others with a $50/ton and $70/ton price increase on containerboard . Smurfit, with 7.1Million tons of capacity, is expected to also announce an increase.
We have heard that Smurfit is to shutter containerboard & corrugated packaging equipment.

Will India Be Next to Build a Paper Industry?

China, with 1.33billion people, has a growing appetite for consumer products and boxes to ship them in – but with India’s 1.18billion population growing more and more sophisticated – will they be the next country to build paper mills? India continues to be one of the poorest countries in Asia and has focused on the service industry, but data illustrates containerboard demand has only grown to 2.6million tons (versus China’s demand of 30.5million tons). India certainly is a country to watch for as the population becomes more industries and wealthy.

Tuesday, December 01, 2009

Coy Paper Appointed Distributor for Fire Proof Chemical

Coy Paper has been awarded the distribution rights for New Star Chemical's Hardindo Anti Fire Products. These include AF11, AF21, and AF31. Currently, the company is focusing on the AF21 product which is a colorless water based solution. Once applied, the sub straight is fire and flame proof and the original functionalities and properties of the item remain in tact.
Yes, this even creates a fire proof paper or card board grade!
The chemical is non-toxic, non-corrosive, biodegradable, and completely environmentally friendly.
The chemical offers permanent protection from fire once applied, Harindo AF21 will protect your home and family, hotels, night clubs, schools, libraries and museums, etc. from the ever present danger of fire, giving you peace of mind 24 hours a day. Contact Coy Paper at info@coypaper.com for more information.

International Paper Joins Pricing Increase for Containerboard

International Paper joined Georgia Pacific, Pratt, and Longview by announcing a $50/ton (East Coast) and $70/ton (West Coast) containerboard price hike for January. Coy Paper now assumes the other major producers Temple-Inland, Packaging Corp of America , Rock-Tenn, and Greif will follow. The price of containerboard had decreased $70-80/ton since last November 2008.

Four Magazines Partner up to Go Online

Time, Conde Nast, Hearst and Meredith are in discussions to partner and form a new company to create online access to magazines. The new entity will create the digital formats and develop an iTunes-like storefront, controlling distribution, pricing and profits.

Koehler AG Seeks USA Expansion

Papierfabrik August Koehler AG of Germany is looking to expand through an acquisition of a new facility in the USA. The company currently exports Thermal Papers, Carbonless, and décor papers from its 3 mills producing 483,000 MTPA and would like to grow the North America market.

Monday, November 30, 2009

Pulp and Paper Update

A summary of Mark Wilde of Deutsche Banks recent comments-

The prices for uncoated freesheet remained flat in North America in November, with the exception of envelope papers, which rose $25-30/ton, catching up with the $35-40/ton hike on offset rolls last month. These hikes were driven by increased pulp prices, small increase in demand demand (October shipments -9.3% y/y, YTD -13.1% y/y), and slightly lower October mill inventories (-0.8% vs. October of 2008).
International Paper and Domtar recently announced 800,000TPAof permanent capacity closures by mid-2010, representing 7% of North American uncoated fresheet capacity.A recent example was International Paper just closed PM 6 — a 223,000TPA paper machine at its Franklin, Virginia mill.
Mark Wilde, senior analyst at Deutsche Bank covering the Paper & Forest Products sector, said that IP reported pick-up in demand in the direct mail and envelope converters segments.
"Outside the U.S., we understand that European producers have begun to announce price hikes for January 1. Additionally, we are becoming less concerned about the impact of tonnage from Europe, as we think the level of imports to the US will be smaller than we had anticipated."

Containerboard shipments for November as well as prices ($525/ton for linerboard and $500/ton for corrugating medium) remained flat. Two suppliers announced a price increase for January orders.
"When coupled with large supply reductions, expiration of black liquor credits, and a falling U.S. dollar, we expect similar domestic price hike initiatives from International Paper and Smurfit-Stone," Wilde said.
"We continue to believe Smurfit will announce 1.0-1.5 million of closures around year-end. If that occurs, it would push operating rates back into the mid-90's," he added
Market Pulp
Pulp prices rose $30/ton in November, the sixth month in a row in the U.S.A. and seventh in a row in Europe and Asia. NBSK (northern bleached softwood kraft ) rose to $830/MT. The increase was driven by a sharp rise in U.S. spot prices, low mill inventories in the U.S. and Europe, strong Chinese demand, and a weaker US Dollar.
Reports suggest that an additional hike is looming for December, Wilde said.
For China, NBSK rose to $675/ton (from $645/ton). However, anecdotal reports suggest demand in China may slow down in the coming months from inventory overhang — estimated to be around 400-500,000 m/tons.
Further, higher prices are drawing high-cost Chinese pulp mills back into production — as market prices are now well above cash-cost.
Meanwhile, other supply is also creeping back, pointed out Wilde. North American mills considering restarts include: Buchanan Forest Products' 475,000 tpy NBSK mill at Terrace Bay, Ontario; Mackenzie Pulp's 220,000 tpy NBSK mill at Mackenzie, British Columbia; and Fraser Papers' 250,000 tpy NBHK (northern bleached hardwood kraft) mill at Thurso, Quebec

Paper Prices and Shipments Continue to Decline

From a Report by Tom Stundza
Fewer customers' demanding paper have continued to cause pricing to deteriorate.
The Pulp and Paper Products Council has reported that North American printing and writing paper shipments have dropped by almost 19% through October, while year-to-date market prices tracked by Purchasing.com have dropped by about 6%.
The RISI reports that the demand slide may be over in early 2010 since overall October shipments of 2,069,000 metric tons were only 9% below the industry's shipments level in September. However, coated free-sheet shipments have dropped 25% so far this year from 2008 levels while coated mechanical paper shipments are down 24%.
The RISI review of industry data shows that overall mill inventories slipped 1,592,000 metric tons at the end of October, which is 95,000 metric tons lower than at the end of September and 198,000 metric tons lower than a year ago.
y

Please, also, visit PAPER NEWS for all the news on paper


Tuesday, November 24, 2009

Subscribe for free to Pulp and Paper News Releases

All new – you can now subscribe to Coy Paper’s News releases and have them come directly to your computer – for free. It's easy, go to http://psvallely.blogspot.com/ on the right side click on FOLLOW and you will automatically receive this blog. The Current News on the Pulp and Paper Industry is a daily read by hundreds of professionals in the industry as well as research analysis’s and investors.

Georgia Pacific Joins Longview Containerboard Pricing

Georgia Pacific just joined Longview with a $50/ton (East Coast) and $70/ton
(West Coast) containerboard price hike for January. This gives the hike announcement more
credibility, as Georgia Pacific is large producer. The company, owned by privately-
held Koch Industries, is similar in size to Temple-Inland and trails
only International Paper and Smurfit-Stone in the North American
containerboard market.

USA Pulp & Paper Producers Report on Gains

In the third quarter of 2009, 26 USA pulp and paper companies reported sales of slightly over $21billion, up 4.5% sequentially vs. 2Q, but down 16% vs. last year. They reported a collective $1.4 billion in net income, including $1.3 billion of alternative fuel credits, up 2% vs. 2Q. Fuel credits were received by 19 companies, lifting their incomes. Excluding fuel credits and other gains, more than half showed a drop in earnings or a marginal increase year over year. Also, production increased in third quater, up 4.6% to 6.7 million tons in September vs. May.

NAPL Forecasts 2010 US Commercial Print Volume Up 2-4%

The NAPL forecasts US commercial print volume to increase 2-4% to $76 billion in 2010, after declining 14% in 2009 to $73.5 billion and declining 4% in the previous two years. Commercial printing reported slightly higher volume in September with fewer printers reporting business as slowing, but the NAPL Printing Business Index still remains low at 36.4 in October. One third of total US printing and writing paper shipments will go to commercial printers, totaling 6.3 million tons, evenly split between coated and uncoated grades

US Postal Service Reports no 2010 Increases for Periodicals

The postmaster general, John Potter, has remarked the USPS will not increase prices for 2010 on First Class, Standard Mail, Periodicals, and single piece parcel post. This is indeed good news for magazines and cataloguers, and , therefore, paper producers.
A quick review of the past 10 years illustrates nearly a 40% increase.
1/2001 +10%
6/2002 +3%
1/2006 +5%
7/2007 + 12%
5/2008 +3%
5/2009 +3.98%
1/2010 -0-

UPS To Increase Pricing

UPS will raise its rates in 2010. The new rates will take effect Jan. 4, 2010.
Ground packages, air express and U.S. origin international shipment rate will jump by an average of 4.9%, according to the company. This is slightly less than the 5.9% announced for 2009 shipments.
The rate increase for air express and international shipments is based on a 6.9 percent increase in the base rate, less a 2 percent reduction in the air and international fuel surcharge index, the company said. The company’s management is concerned with this rate increase in that volume of shipments is down.

Monday, November 23, 2009

Wausau Announces Price Increases

The Wausau Paper Mill just announced it will increase prices for Astrobrights (+$2.00/cwt); Exact Brights (+$2.00/cwt); and Astroparche (+$5.00/cwt).

Newspaper ad sales fall again

With the depressed state of the overall economy, newspaper advertising sales fell 28 percent in the third quarter.
Ad revenue totaled $6.4 billion, according to figures from Newspaper Association of America. It was a narrower decline than the previous period.
Advertising revenue has declined year-over-year for 13 straight quarters killing some newspapers and wiping out thousands of jobs at publications across the country. In the third quarter, print advertising sales fell to $5.82 billion from $8.19 billion a year earlier. Sales of online ads dropped 17 percent from the year-earlier period to $623 million

JC Penney Transitions from Print to Web

JCPenney announced that they will discontinue the biannual "Big Book" catalog and instead will concentrate efforts on creating smaller, more targeted catalogs, online selling, and social media exposure. The current issue is JCPenney's last one.
Reasons for its demise range from the increasing costs of paper and mailing and environmental concerns about wasting paper and success on Internet sales as well as the ability to illustrate products more dramatically.

Big book catalogs have become less relevant as customers have embraced shopping online, (Note Sears stopped producing their big book in 1993 – after 106 years)

Business Publications Fair Well in Down Economy

Mediamark Research & Intelligence’s fall magazine audience report shows that six business titles—Forbes, Fortune, Inc., Smart Money, The Wall Street Journal and The Economist—all enjoyed an increases in total audience and readership when compared to 2008. The thought is consumers are seeking help to navigate the current recession and are turning to business titles.
The Journal reported its audience grow 11.6%, to 3.4 million; Forbes’ grew 11.5% to more than 6 million; Fortune’s rose by 9%, to 4.1 million; and The Economist’s audience grew 6%, to 2.8 million.
However, the bad news for these publications was that although readership was up, advertising pages were down as are total pages!
Another reason for coated papers to remain depressed with respect to demand.

Friday, November 20, 2009

Paper Markets

The accumulated effect is all paper volume continues to be depressed, although month over month shipments and comparative figures versus 2008 appear to be declining at a decreasing rate - maybe the 'bleeding' has slowed? End user demand for coated papers appears to be stable for November and estimates for December appear stable as well. Coated Free Sheet was down 7% in October (vs October 2008) and down 23.1% for the year through October; Publication coated was down 4.2% in October (24.9% for 2009) and Uncoated WoodFree down 10.3% for October (13.6% for 2009).

Europe Seeing Pulp Prices Rise

Pulp inventories are at the lowest levels in over 10 years throughout Europe, estimated to be 750,000 tons, down 8.5% in October vs. September, and down 51% vs. 2008. As a result, price increases are happening worldwide, with NBSK pulp at $800/MT in Europe and SBSK at $760/MT. China’s increased in demand for pulp is effecting all markets.


Please, also, Click PAPER NEWS for all the news on paper


Thursday, November 19, 2009

Pulp Market Remains Strong

Pulp prices are up, inventory is down, much equipment is still ideal,and Chinese demand continues to be strong .... all components yielding a seller's market and causing most buyers to forecast continued pricing pressure. The USA level for NBSK is $830/MT. Coy Paper continues to monitor for shuttered equipment to come back on line - once this occurs, pulp should prove to be more available.

Will Web Browsers Pay for online Information?

Excerpts from Forrest Research Study

New research from Forrester has found that while a minority of consumers is willing to pay for online content, not all pay models are considered equal.

The findings are relevant today when just about every print publisher is hunting for ways to offset declines in ad revenue by shifting their revenue burden to readers who are used to a world of free online content.

While 80 percent of consumers said they would not pay for access to online content if the publisher erects a pay wall, equal amounts—8 percent—said they preferred an online subscription and multichannel subscription. Only 3 percent said they’d prefer micro payments.

That suggests publishers should keep offering free, ad-supported products to the vast majority who won’t pay, while giving those who will pay a choice of payment methods for access to premium products, says the Nov. 10 report entitled "Publishers Need Multichannel Subscription Models."

Favorites were outlined as follows
37% Web site
14% portable devices like mobile phones
11%, laptops and netbooks
10 % print publication via an emailed PDF.
3 % e-readers like the Kindle
Notably, fully 44 percent said they preferred none of those options.

Who will pay for online content? The study found that people who are college-educated, technology optimists and higher earners are more likely to pay for online newspapers. Age was barely a factor in willingness to pay.

Age was a bigger factor among those who are willing to pay for online magazines. That group also is more likely to be college-educated and favoring technology. Income is barely a factor among this group, though.

Paper Companies Asking for Bigger Trucks

Another paper producer, AbitibiBowater, has joined International Paper and others in a request to allow the Federal Government to allow larger trucks on USA highways. The bill being reviewed is called the Safe and Efficient Transportation Act, a bill that would allow trucks outfitted with an extra axle to carry more weight on interstates.
In AbitibiBowater's case, just for its one mill in Calhoun, TN, it would eliminate 58 trucks per week and save $3 to $3.5million each year. The bill would also reduce the amount of trucks and, therefore, pollutants emitted.

Tuesday, November 17, 2009

Kraft Linerboard Price Increase

Longivew Fiber, a smaller producer (#12 at 600,000TPA), just announced a $50/ton price increase for shipments after January 1 on kraft linerboard and corrugating medium. The industry requires International Paper and Smurfit-Stone to follow for this new price level to occur. The mills have been disparate for a price increase because fiber costs are up and the black liquor credit will be gone. The challenge is soft demand - October box data show continued weak volumes.
Shipments were down 5.8%, although inventory down as well.

More Newspapers Consider the Web

A recent American Press Institute survey found that 58% of newspaper respondents are considering initiating paid access for currently open/free news and information online, and nearly 25% expect to implement a paid strategy in the next six months. This is a big change, considering that 90 % of the responding newspapers currently do not charge for content, and only 3% currently have a paid-only site.
But in Publishers Need Multichannel Subscription Models Forrester finds that “most consumers (80%) say they wouldn’t bother to access newspaper and magazine content online if it were no longer free (no surprise), and the rest are split about how they’d like to pay for content.

AbitibiBowater decides NOT to curtian Equipment

AbitibiBowater will delay curtailment of newsprint and uncoated mechanical paper production in three facilities, adding 60,000TPA through year-end. Management reported on improved demand.
-Clermont, QC, the 125,000TPA newsprint PM #4 will operate through December, instead of being idled Oct. 31st.
-Fort Frances, ON, the 70,000TPA uncoated mechanical (SC-B paper)PM #6 will run an added 4-6 weeks.
-Liverpool, NS, the 250,000TPA Bowater Mersey newsprint mill will run at full capacity through 2009, instead of at 50% capacity.

Monday, November 16, 2009

Glossy Catalogue Pages Still Sell Products

Over 17billion catalogs were mailed to American households last year, 56 for every American. This means the average catalog retailer sent 21 million copies, one every 26 days. Although the percentage of resulting sales keeps declining, currently 1.3%, catalogs are still the largest revenue generator for direct marketers, and the catalogue is beginning to drive significant traffic and sales to the website. Most catalogues are printed on 'glossy' paper with full color photographs of products and plenty of text.
Although most of the paper for these holiday catalogues has already shipped, the paper market is still depressed. Unfortunately, the first quarter has never been a good period for coated shipments - so not much hope in sight for a near term turn around!

Friday, November 13, 2009

Catalyst Mill in Elk Falls may Never Open

The Catalyst Paper Mill on the Campbell River in Elk Falls, Canada may never reopen as a result of the current economic challenges and a trend to fewer people reading newspapers. The Western Canada plant had employed over 1000 workers and produced 700 tons of newsprint every day for newspapers. The mill management sited online news had severely eroded print media’s readership and cheap paper now being imported from China. The demand for newsprint is down and many mills have become shuttered.

China Reports on Pulp and Paper

China imported almost 12million metric tons of pulp so far this year, up 42% vs. last year. Paper and paperboard imports decreased 11% to 2.72 million tons. In October, pulp imports dropped 21% to 1.07 million metric tons, and paper imports were down 13% to 270,000 tons. (Source: General Administration of Customs of the People’s Republic of China)

Thursday, November 12, 2009

Hearst looks to the Web as an Ally

In an effort to boost subscriptions (especially when 1H2009 newsstand sales are down nearly 12.5%) Hearst Magazines is looking to the web. They forecast that as much as half the subscriptions in 2010 might come from the web.
The publisher’s digital group reported that advertising revenue from their sites is estimated to grow 20% for 2009.

Conde Nast Advertising Pages Down

Conde Nast has made several cost cutting initiatives during 2009, including shedding staff and publications. This was mainly a result of advertising revenue declining by nearly a third since last year - losing a total of 8,359 pages across all publications.
Recall, Coy Paper reported the closure of Gourmet, Modern Bridge, Elegant Bridge, and Cookie. The worst hit of the surviving magazines includes Architectural Digest – down almost 50%; “W” down 46%; Traveler down 41%. On the brighter side, Glamour increased over 6.5%.

Meredith Publishing appears to be doing the best because of its mass-market advertisers. Note, Conde Nast appeals mainly to luxury advertisers.

As reported in an earlier Coy Paper release, 3Q2009 advertising pages fell an average of 27.3%.

Wednesday, November 11, 2009

Some Thoughts for 2010 on Paper

Given the massive downtime in all paper markets with nearly every mill participating in machine closures, demand might just be matching supply in the very near term. Paper has been readily available; prices are depressed, and, suffice it to say, it has truly been a ‘buyers market’. However, if the federal stimulus package takes hold and curtailed supply allow operating rates to go back into the mid 90s, the producers of paper could once again control pricing. Clearly, raw materials such as pulp and energy have increased in price; most likely the ‘black liquor ‘ credit will end December 31, 2009…. a current ‘life support’. We think 2010 could be snug – and suppliers will advance pricing throughout the year. The Coy Paper team strongly endorses buyers should begin to negotiate 2010 programs now.

No More Metropolitan Home Magazine for Hachette

Hachette Filipacchi Media reported the closure of Metropolitan Home after the December issue. Elle Décor will now be the only shelter publication for this publisher. Many similar magazines have been closed because of the housing market collapse and economic downturn including Meredith’s Country Home, Time Inc.’s Cottage Living and Condé Nast’s Domino.

Metropolitan Home is the second shelter title Hachette has folded in the current downturn after Home, which closed in October 2008.

Tuesday, November 10, 2009

Coated Paper Companies Waiting on the Asia Decision on Dumping

The preliminary determination from the Department of Commerce should be out during this month, November 2009. Recall, we reported on New Page and other coated paper producers requesting that the US Government review the possibility that China and Indonesia governments were subsidizing paper mills and allowed for ‘dumping’ paper into the USA at below cash cost to produce. This includes coated paper over 80GE brightness.
The total imports of coated papers had increased from 131,687 tons in the first 6 months of 2008, 185,422 in the first six months of 2009 – an increase of 40%. During this same period USA domestic producers estimated their shipments were down 38%.
China and Indonesia combined are estimated to have a 30% market share here in the USA.

Go Green and Save

Although paper produced from post consumer recycled fibers may cost more than virgin paper, there are still many green initiatives that can save money if you can not afford this grade. Note, the paper industry’s objective by 2012 is to provide 60% of paper produced from recycled fiber (compare to Glass – 24% recycled; Plastics 7% paper is among the best at recycling).

-While it is true, paper manufactured from ‘post consumer waste’ is more expensive,; however, in many cases paper with recycled pulp (pre-consumer) may cost the same.
-Work with your printer to reduce paper wasted on make ready, bindery, and trials
-Reduce the amount of ‘free office copies’
-Confirm you have the correct roll or sheet size that allows for the least amount of waste; also, review your print layout for maximum coverage of sheet
-Reduce the basis weight of both the cover and body stock (switching from 80lb to 70lb yields 12.5% less paper – save even more if you mail)
-Ship by rail instead of truck
-If you are purchasing a recycled paper, now is the time to negotiate long term pricing. Paper is at an all time low today and therefore is a good time to establish benchmark pricing. (Note: Insisting on firm pricing with no increase most likely is not prudent !)

Some Advertising Performance Statistics

The Audit Bureau of Circulations reported on 1H2009 advertising and we share a few

BusinessWeek
Total Circulation (09/08/%change) 921,423…….925,225….-0.4%
Single Copy (09/08/%change) 27,953….29,917….-6.5%

Forbes
Total Circulation (09/08/%change) 913,655….926,899…-1.4%
Single Copy (09/08/%change) 27,172….32,096….-15.3%

Time
Total Circulation (09/08/%change) 3.27M….3.29M….-0.06%
Single Copy (09/08/%change) 100,382….95,950….+4.6%

Newsweek
Total Circulation (09/08/%change) 2.64M….2.65M….-0.03
Single Copy (09/08/%change) 64,866….82,756….-21.6%

Myllykoski Sells Paper Mill

Myllykoski has agreed to sell its Alsip Mill in Illinois to the Watermill Group. The Alsip mill will be renamed FutureMark Paper Company, claiming to be the only US facility able to produce 100% recycled coated paper for magazines and catalogs. The mill can also produce a premium #4 grade and food label product that is recycled. Total production of coated publication paper is 135,000TPA.

Monday, November 09, 2009

One Newspaper Decides to Increase Costs!

The San Francisco Chronicle will become the first daily newspaper to switch from newsprint to a glossy publication paper. The glossy paper will be used on the front page and on the first page of most sections, along with select inside pages. The objective is to secure more high end advertisers (and their scarce dollars).

Finland Reports Reduced Paper Shipments

Paper shipments in Finland are down 17% versus the 3Q08 at 2.8million tons. Magazine papers were down 25% and printing and writing grades declined 10%.

Raw Material for Pulp becomes More Expensive

Due to poor new construction in both the USA and Canada, residual wood chips historically allocated to the paper industry for pulp have also declined. Lumber production in Canada is down 50% over the last 3 years, thus creating a true lack of chips and forcing pulp mills to consume more expensive 'round wood'. The Wood Resources Group estimates that fiber costs in Canada for pulp is currently 70% higher than for the USA producers.

Please, also, visit PAPER NEWS for all the news on paper

Friday, November 06, 2009

Bloomberg Reviewing a 'paid for' Web Site for BusinessWeek

The new owner of BusinessWeek, Bloomberg, continues to be confident that printed magazines will survive and accordingly, announced they produce a BusinessWeek that is bigger, glossier and more international. At the same time, the new owner reported they are exploring a strategy to charge for content on their own Web site.
Bloomberg plans to keep most of its content free while on its web site, and in time, create deep, vertical content areas that paying users could access for roughly $100 a year.

US House Reviewing Paper Producers' Tax Credits

U.S. House of Representatives are trying to raise more money for the nation's health care by keeping Weyerhaeuser, Temple-Inland. and other manufacturers of pulp and paper from claiming up to $24 billion in tax credits.
The proposal would bar the companies from using an Internal Revenue Service ruling made public last month to claim a $1.01/gallon tax credit for producing biofuel from so-called black liquor, a wood byproduct from pulp making.
I am sure the paper industry will fight this. In many cases, it is the tax credit that creates the difference between some producers surviving or closing their doors and letting employees go.

Thursday, November 05, 2009

Quick Update on a Few Markets

Market Pulp producers have started to announce yet another price increase. The new pricing is slated for November shipments, but will most likely not be implemented until December. The $30/mt pop will bring NBSK to $830/mt in North America ($700/mt for BEK).

Transaction prices continue to climb for Uncoated Free sheet, although cut size / business papers remains somewhat flat at $1010-1060/t; 50lb rolls are now $845-865/ton. Envelope papers also up $40/ton

Containerboard pricing remains flat, but with pulp and other raw material costs increases, the producers must do something. There has been equipment curtailment, which will assist the mill's efforts to increase pricing.

Verso Paper Recieves Federal Stimulus Funding

Verso Paper Corp. was awarded $9.3 million in federal funding through the Department of Energy from the American Recovery and Reinvestment Act for infrastructure improvements at its plants in Maine and Minnesota. The company will install waste energy recovery equipment at its plants in Jay and Bucksport, Maine, and one in Sartell, Minn., as part of 12 waste energy recovery projects.

Printer's September Sales Down

September is generally the first of commercial printing’s three biggest months; however, printing shipments dropped 11% to $7.5 billion vs. last year, the lowest level in Sept. since 1994.

Wednesday, November 04, 2009

No New Sustainability Efforts Seen

Notes for a Robert Half Survey-
New survey of most USA businesses indicate few are planning to introduce new eco-friendly programs - especially if it costs money. The majority of companies are quick to add that they have already included many 'green initiatives' and feel they are doing their part. The survey concluded by stating that end users are not willing to pay more for an environmentally friendly product (although in many cases it DOES cost more to produce).

Tuesday, November 03, 2009

December Advertising Magazine Pages Looking Up

Revenue from advertisements in magazines has been a real challenge in 2009, but several publishers are reporting good numbers for December issues.
-Time Inc.’s titles, Real Simple, Cooking Light, and Southern Living will run significantly more ad pages vs. last year.
-Conde Nast’s Glamour is up 5%, with Wired posting much smaller declines and many advertisers returning.
-Martha Stewart Living Omnimedia’s November issue was down less than 5%, and their December issue has a triple cover with inside cover ads.
-Hearst’s Cosmopolitan, Country Living, Good Housekeeping, Marie Claire and O are all posting bigger Dec. issues. Smaller declines are an improvement this year, when advertising pages fell 27% Jan-Sept 2009.

Paper Maker Says Demand Up For Recycled Paper

Like so many other paper producers, Longview Fiber Paper and Packaging Inc.had to let employees go due to poor sales. But recently, the company introduced FibreGreen, which is made entirely with recycled paper and is used for grocery bags and fast-food sacks. The company’s sales are now doing fine!
Longview Fiber obtains 40 percent of the material used to make FibreGreen from paper recycled by consumers. The mill’s challenge initially was 100% recycled paper is often relatively thin and weak, but Longview developed technology to maintain quality. Most of the 60% balance comes from paper products rejected by the mill.
A 100% recycled product such as FibreGreen is the type of product that customers are demanding. A couple of success stories so far include Whole Foods Market becaming the first grocery retailer nationwide to switch to 100 percent recycled bags. Starbucks is pushing to increase its recycled packaging, and so is the nation's largest retailer, Wal-Mart..
FibreGreen is manufactured on the company's No. 12 paper machine, which produces about 400 tons of paper per day. The 100 percent recycled paper was about one-fifth of the machine's September output.

Monday, November 02, 2009

BusinessWeek Quotes P. Scott Vallely on Paper Industry

As quoted in the October 9, 2009 BusinessWeek article called Kill a Newspaper, Save a Tree? Not Quite
The article reported on the challenges that the paper industry is experiencing – equipment shutdowns might save a tree or two – but its killing employment.
Many of AbitibiBowater's rivals "are losing money or breaking even," and have had to shutter operations temporarily, if not permanently, says P. Scott Vallely, CEO of Coy Paper, a specialty-paper distributor in New Canaan, Conn. "They're surviving by issuing more bonds and taking on more debt, which isn't sustainable."

Kohl’s the Boosts Mailings and Digital Ads for Holiday Season

In an attempt to gain share of limited pockets for the consumer, Kohl’s will launch their holiday campaigns right after Halloween, earlier than usual. They will increase spending on digital ads by 25% and will increase customized mailings, i.e. jewelry, general gift guide, men’s holiday gift guide based on past purchase behavior. If competitors follow, the stronger media presence will assist the paper industry with increased paper demanded as a result of the additional mailings.

Friday, October 30, 2009

iTunes now for the Magazine Industry

Maggwire.com has confirmed a model that allows magazine publishers to monetize online content. Maggwire will let readers browse magazine articles—currently almost 10,000 per week, including Time, PCWorld, Vogue and Yachting, among others—free of charge. But , the new model will use the Apple iTunes system which proved people will pay for reliable music downloads, now they people will pay for a personalized magazine experience.
Current thought for the economics include subscriptions priced at $1.99 to including one magazine title and one channel; each additional title or channel $0.99. Single articles outside of reader-selected titles or channels will be $0.15 per basic article, and $0.25 per cover article (determined by the publisher).

Worldcolor and Macmillan Partner Up

Worldcolor announced it signed one of the largest book printing agreements in North America with a multi-year agreement with Macmillan. The agreement is for Woldrcolor to print approximately 800 million major trade bestsellers, textbooks and mass market (paperback) books. Also included in the agreement are related warehousing and distribution services. Some of the Macmillan names in book publishing include St. Martin's Press, Farrar Straus & Giroux, Henry Holt, Tor, Forge, Bedford/St. Martin's, and W.H. Freeman and Worth Publishers

Meredith Posts Positive Results

Excerpts from Meredith release-
Meredith’s national media group reported $39 million in operating profit, a 14 percent increase of the prior-year period, the company said. Revenues dropped, though, from $294 million during the fiscal 2009 first quarter compared to $272 this year. The group’s operating expenses declined 10 percent to $233 million, including a 9 percent drop in paper prices.
According to Meredith president and CEO Stephen M. Lacy, national media advertising revenues are “trending in the right direction, and we continue to outperform our major peers and gain share.” Meredith said its share of overall magazine industry ad revenues increased to 12.2 percent during the fiscal first quarter, compared to 8.7 percent this time last year.
Eleven of Meredith's 14 PIB-tracked titles increased share of advertising revenues during the third quarter, the company said.

Thursday, October 29, 2009

Stora Enso Boosts Largest and Fastest SC Machine

Stora Enso’s Kvarnsveden paper mill in Sweden houses PM #12, which is the largest paper machine producing supercalendered paper like newsprint and uncoated magazine paper, with capacity of 420,000 tons. PM #12 set speed records, reaching 1,929 meters/min increasing productivity and capacity.

Newsday to Charge for Online News

Coy Paper recently heard that Newsweek has decided start to charge a fee for access to the news on their website. This new model will make the paper the biggest general-interest daily to charge for access to its digital information. The service will be free to those who currently subscribe to the printed edition - or pay $5.00 per week.

Wednesday, October 28, 2009

West Coast ‘Green’ Mill Closes

Freshwater Tissue, California's last pulp mill and the only chlorine-free/dioxin-free mill in the USA, plans to permanently close. The mill has struggled since the mid 1990's to compete with foreign competition. The owners were planning on building a tissue mill as well. This west coast mill was a model of responsible and environmentally sound American manufacturing, but failed to attract both federal assistance nor private investors.

New York Times and Gannet Report Revenue Down

Like so many other national newspapers, the New York Times continues to reduce costs (estimate 2009 reduction of $475Million) due to declining revenue (down 16.9% from last year).
Advertising continues to struggle
-Classified down 38.3% (automotive,-32.1%; real estate, -44.1%; and help wanted,-52.5%)
-Retail advertising down 25.1%
-Circulation revenue actually increased 6.7% last quarter (but, both the NYT and Globe introduced price increases)
Meanwhile Gannett Company posted a revenue decrease of 53% in the third quarter. A few comments-
-Print newspaper advertising down 31.2%; revenue fell 28.4%
-Online advertising declined 18.5%
-Classified down (automotive, -35% ;real estate, -37% ; employment, -56%)

Paper Wins Another Battle

The San Jose, California City Council joined several other city in their fight against plastic bags. The group voted to make the city the largest in the nation to ban most plastic and non recycled paper shopping bags. This will take effect until 2011, war on plastic bags continues! The council reported that it would allow paper bags made with a minimum of 40 percent recycled materials.

Tuesday, October 27, 2009

Corner Brook Mill Starts up

The Corner Brook Pulp and Paper mill will start up. It was down since October 12.

Update on Containerboard Market

International Paper announced 1.4Million tons (4% of the market ) to be removed from their capacity (still no word from Smurfit). This will boost operating rates into the mid 90s and the producers are hopeful that pricing will improve. The real improvement will come when the economy improves and end users begin to buy things that go into boxes!
Current pricing (although there are discounts available)-
-42lbs Linerboard $525-535
-42lbs Unbleached kraft linerboard $440-460/ton

Update on Uncoated Free Sheet

The current curtailment of 800,000 tons by International Paper and Domtar, higher pulp prices, and lower inventories, as well as a 'very' slight increase in demand have all assisted the producers in achieving a price increase. While business papers (cutsize) pricing remains at approximately $1010-$1060/ton; the uncoated offset - 50lbs witnessed an increase of $35-40/to to $845-865.
Shipments through September are still down 13.5% from 9/08. Envelope producers just announced a price increase for November of $40/ton.
One area of concern is the new Portucel uncoated freesheet machine in Portugal. The 500,000TPA machine has started and 30% of the production might hit the USA.

Regional and Town Newspapers Surviving Well

As Coy Paper has reported in recent past releases that the big daily newspapers are losing circulation and advertising revenue. The New York Times, today, published an article outlining decreases in circulation for the countries national and large metropolitan papers; confirming over a 10% drop this year. However, the story is not so grim for community and small town newspapers. Many of the small papers actually grew. Although the internet has cannibalized much of this media, the small town papers are very focused on local issues, local events, nearby movies and restaurants, etc. These writers live, eat, and ‘play’ in the community.

Packaging Segment by Shipments

Total North American packaging industry shipped $79.7Billion worth of products in 2008
Folding Carton $10.9Billin
Tag and Label $15.0Billion
Corrugated $25.8Billion
Flexible Packaging 28.0Billion

Please, also, visit PAPER NEWS for all the news on paper

Monday, October 26, 2009

International Paper Announces more Equipment Curtailment

International Paper will curtail 2.1Million tons of capacity. The company, the world's biggest supplier of containerboard, will shutter 1.4Million tons of containerboard (note, this is 12% of the mill's capacity and 4% of the USA capacity). Regarding the uncoated shutdown, International Paper will close 600,000 tons of capacity which is 19% of the mill's capacity. They are the second largest producer of uncoated paper. IP also reported to curtail 140,000 tons of bleached coated board which is 7% of their capacity.

Until the markets improve, the mills effected by this announcement include, plants in Albany, Ore., Pineville, La., Franklin, Va., and the Valliant, Okla., mill.

Following these permanent shutdowns, IP will have about 10 million tons of North American containerboard capacity, 2.6 million tons of North American uncoated freesheet production capacity and 1.7 million tons of North American coated paperboard capacity.

This should significantly assist the mill in correct the excess supply and poor demand.

Poor Advertising Causes Fortune to make Changes

Fortune Magazine recently announced it will publish 25% fewer issues, which translates into 18 issues versus the current 25. Fortune lost 35% of their advertising pages this year. The publisher will restructure the organization, 'beef up' and perhaps charge for content on the website, and add editorial pages to the magazine in an effort to generate additional revenue.

Pulp Inventories Continue Downward Trend

World pulp inventories were reported to be 26 days in September - down substantially from 44 days in September of 2008. As released in earlier Coy Paper articles, pulp producers curtailed production in the first half of this year because of limited demand, but, today, China continues to purchase large shipments. Therefore, the second half of 2009 appears to witness strong shipments. Worldwide shipments increased nearly 11% in September (vs September of 2008) to 3.5Million metric tons; meanwhile, North American market pulp producers shipped 628,000 market pulp tons, down 3% (vs September 2008). Note, shipments to China doubled to 638,000 metric tons.

Thursday, October 22, 2009

This is National Forest Week

In 1960, Congress, in an effort to recognize the forest products industry, announced October 18-24 as National Forest Products week. Our industry makes up 6% of of the GNP manufacturing sector. The paper industry is included in the top 10 manufacturing employers. The industry now estimates that 57% of all the paper consumed is recycled.

Wednesday, October 21, 2009

Direct Mail Still Surviving

The DMA just reported that direct mail advertising is enjoying a larger share of total advertising dollars. The forecast for 2009YE is for Direct Mail to grow to 54% of total (although the total pie is down). DMA estimates total advertising will be down 11% to $150Billion for 2009. They forecast a steady spend for the end of 2009 and a slight rise of 2% for 2010.

Playboy Reduces Advertising Fees

Playboy, like the majority of other magazines, has suffered with depressed advertising demand and revenue. The publisher just announced they will reduce its advertising rate base by 38% in an effort to stimulate demand. Will other magazines follow?

Domtar Reduces Paper Capacity and Adds to Pulp Production

Domtar will shut down its Plymonth, NC paper making operations and transition the equipment to Fluff Pulp. The company will invest almost $75million to accomplish this and effectively increase capacity of their Fluff Pulp by three times current output to 444,000TPA. This project will be completed by 4Q2010.
After Domtar ceases to produce paper in Plymonth, they will have reduced capacity of uncoated business papers by 200,000TPA.

Tuesday, October 20, 2009

More on Pulp Market

Coy Paper continues to be surprised at the current strength for market pulp. The price increases all seem to be accepted, and the deep discounts are drying up. The strong demand from China along with low mill inventories and curtailed capacity have all assisted with the tightening of supply. NBSK will soon be up another $30/MT to $800/MT; SBSK also up $30 to $750/mt; BEK to $700/mt; HBSK to $690/mt; and SBHK to $670/mt.
With new list prices at this level, one might assume some of the curtailed pulp producing equipment might be re engaged!

Postmaster General Reports no Increases for 2010

Postmaster General Jack Potter recently confirmed that the USPost Office would not increase postal rates for market dominant products in 2010. This includes First-Class Mail, Standard Mail, periodicals and single-piece Parcel Post. Changes in pricing for other products such as Priority Mail, Express Mail, Parcel Select and most international products, These USPS products are still under consideration.
This should assist the magazine, Catalogue, and direct mail vendors.

Newpage Confirms more Down Time

Consistent with our earlier Coy Paper release, NewPage will take 160,000 tons of market related downtime in the forth quarter. The #63 coated paper machine in Whiting, WI will be shuttered 'indefinitely' and #10 in Rumford. ME will be curtailed until market demand and production can be better balanced. NewPage, along with other USA coated paper producers have combined efforts with United Steelworkers to file an anti dumping duty case against China and Indonesia in violation of international trade rules.

Monday, October 19, 2009

Conde Nast Evaluates more Publications

Conte Nast’s two golf publications were the most recent causalities for the company and the publication industry. Golf Digest’s advertising pages are down 21% and Golf World is down 24% causing the company to reduce staff for both magazines to cut costs.

AbitibiBowater Starts up Paper Machine

AbitibiBowater restarted its #6 paper machine in Fort Frances, Ontario and will keep it operational through mid November to meet orders. As reported in earlier Coy Paper releases, it has been down since early March.

China's Yueyang Paper Starts Paper Machine

Yueyang started trial runs on the new #9 uncoated paper machine in Yueyang City, Hunan Province. Coy Paper has reported on this expansion with a forecast to have a capacity of 200,000 TPA.

Fewer Magazines Folding in 2009

By: Vanessa Voltolina
Once again, the number of magazine closings has outpaced the number of titles being launched, according to the latest report from MediaFinder. But when comparing the number of titles (383) folded through the third quarter of 2009 to the same time period in 2008 and 2007, the pace is significantly less.
According to MediaFinder's most up-to-date numbers, 643 magazines ceased publication in 2007, and a total of 613 magazines closed in 2008. Right now, that means we’re 230 titles off from last year’s total. So unless there’s a dramatic push in closings through the fourth quarter, it looks like the industry may be looking at fewer magazine closings from the past two years.
Of the 259 titles to launch so far in 2009, the report showed that publishers have pulled the plug on 104 more magazines since the first half this year, when 279 folded publications were counted. During the third quarter, 72 titles launched while 104 magazines closed, including the high-profile closings of publishing giant Condé Nast's four titles—Gourmet, Cookie, Modern Bride and Elegant Bride. Other titles to vanish in ’09 included Meredith’s Country Home, Hallmark, American Express Publishing’s Travel & Leisure Golf, Time Inc.’s Southern Accents and Rodale’s Best Life.
Of the launches in 2009, the regional category topped the list with 15, but also experienced the most folded titles (31), including Tampa Bay Living. Both business and lifestyle categories also declined, folding 14 and 13 titles each, respectively.
The food (14), health & fitness (13), and home (13) categories proved to be popular for launches this year.
B-to-b publications accounted for 75 of the new title launches, 130 of the shuttered magazines, and 24 of the magazines that ceased print editions over the past nine months, the report said.

Thursday, October 15, 2009

A few thoughts on Paper

Most of the paper companies have attempted (some successfully) announcing and successfully implementing price increases or at least transaction prices (that is reduction of deep discounts). Although pulp prices continue to increase, many of the other raw materials have been steady such as labor costs, transportation and energy.
Creating demand continues to be the biggest challenge and Coy Paper safety predicts more capacity rationalization - both shuttering equipment and short term production curtailment. Beyond stimulating demand, prices will remain under pressure and the end to the infamous 'black liquor ' credit are large concerns.

New York TImes will not Sell Boston Globe

The New York Times Company has decided not to sell The Boston Globe indicating that it did not think the bids it received were high enough to merit a sale.
The NY Times management had been considering shuttering The Globe because of heavy losses ($85 million estimated for 2009). But after deep cost cuts, some achieved in a bitter showdown with labor, the paper’s finances improved.
Two bidding groups reportedly had made preliminary offers of about $35 million cash and the assumption of pension obligations

Magazines find Success with Niche Publications

The magazine publishers are finding that special issues are attracting the advertising dollars. This follows the same logic as to why advertisers pay premiums for the Oscars or Super Bowl, special issues are seen by more people who are more engaged and it creates a lot more buzz than regular issues. Publishers such as ESPN’s Body Issue was up 35%; Time’s ‘Man of the Year’ and People Magazine run several special issues a year, they report 20% more advertising dollars.

Wednesday, October 14, 2009

NewPage Shuts Down Another machine

NewPage will shutter #63 paper machine in Whiting, WI. The machine produced 160,000 tons of coated paper. Customers will be supplied for coated groundwood publication papers from Biron, WI and Rumford, ME, where capabilities have been expanded.

MeadWestvaco to Sell Specialty Paper Mills

Onyx Specialty Papers agreed to the purchase of MeadWestvaco's South Lee, MA complex. The facility produced laminates and many other special industrial papers. Onyx was formed by the plant’s current general manager, Patricia Begrowicz, and vice president of Sales and Business Development, Chris Mathews. The deal is expected to be completed this year.

BusinessWeek Sold

Looks like Bloomberg will purchase BusinessWeek.

Tuesday, October 13, 2009

Market Related Shutdown at Corner Brook

Corner Brook Pulp and Paper in western Newfoundland will take the mill down for two weeks.
The company has been effected by the poor demand resulting from unfavorable market conditions, the loss of some orders, the high Canadian dollar, and the low price of newsprint.

Containerboard still down

The major producers of containerboard grades continued to offer an additional discount price of $10-20/ ton for September shipments in an effort to stimulate demand. Prices have been sliding steadily since May. Short of the economy improving, allowing for folks to start buying products that 'go into boxes', - many look for the two market leaders, International Paper and Smurfit, to shutter capacity to balance the excessive supply.

Magazines need to Think Outside the Box

MediaWeek recently published an article on the depressed advertising revenue for magazines. They stated the obvious, that is, no one needs reminding that 2009 was a horrible year for print. Overall, the industry was headed to shed nearly twenty percent of its advertising pages, although some are seeing their pages plummet by as much as 50 percent. MediaWeek, like many others, believe pages are unlikely to return to levels titles enjoyed in the past. To stay afloat, magazines are aggressively seeking new initiatives of growing revenue outside the traditional ad-based model. Fewer advertising pages generally lead to fewer editorial pages which yields less paper demanded; this is especially bad for coated groundwood publication grades.

Sun Times to now be Sold

The bankruptcy court approved the sale of the Sun-Times Media Group to STMG Holdings LLC, led by James Tyree.

Please, also, click PAPER NEWS for all the news on paper

Friday, October 09, 2009

Kruger Elects to keep one Machine Running

Coy Paper had reported that Kruger was to shutter two coated publication paper machines; however, management just announced they will continue one of two coated paper lines at Trois-Rivieres. Annual production will shrink from 130,000 to 75,000 metric tons. The remaining paper machine and the pulp plant will shut down indefinitely later this month.

European Survey Reports Paper Shipments Down

As an update to an earlier Coy Paper release on current news of the Pulp and Paper Industry, The Association of European Fine Paper Manufacturers, CEPIFINE, reported on August uncoated and coated woodfree papers and the news reflected a decline in shipments. The coated woodfree shipments in August fell nearly 21% to 576,000 metric tons. On the uncoated woodfree grades, these deliveries declined 20% to 411,000 metric tons.

Wednesday, October 07, 2009

Pulp and Coated Publication Up, Containerboard Down

As Coy Paper reported earlier, the price of pulp continues to increase and all the majors are standing firm on their price increases and capacity slowdowns. Also, discounts are slowly being reduced.
Recently, the producers of groundwood containing coated publication papers are working with end users toward a reduction in discounts by as much as $60-$80/ton (must feel good after witnessing a decreased price level nearly every month so far in 2009). Demand increased better than 15% in September (vs. August) and the paper market for these grades are ‘only’ down 8% vs. this time last year.
Meanwhile, containerboard demand still remains somewhat weak and pricing remains under pressure. The real key in near term is will the big producers (International Paper and Smurfit) reduce capacity to control supply.

Another Publisher Files for Chapter 11

Questex, who publishes 23 trade publications as well as 150 digital publications filed for bankruptcy protection

Tuesday, October 06, 2009

Printing Shipments Continue Downward Trend

Commercial printers reported on their August shipments and commented they continue to trend downward. The August shipments dropped to $7.3Billion, down 11.5% or $950 million, the steepest dollar decline so far in 2009 (vs. last year).

Conde Nast closes Four Publications

Conde Nast announced that they would close four magazines: Gourmet, Cookie, Elegant Bride and Modern Bride because the advertising pages dropped significantly, The company reported that Gourmet was down 46%, Cookie’s down 19.5%, Elegant Bride down 32.5% and Modern Bride down 21.5%. Remaining Brides magazine will increase frequency to monthly and Bon Appétit will continue. Condé Nast is keeping alive Bon Appétit, an in-house rival of Gourmet.
Gourmet's circulation is 950,000 and Bon Appétit's is 1,300,000.

Most Recent Pulp Price Increase...Done Deal

Pulp inventories continue to be low, China's appetite for pulp is on the increase, and supply is in balance (with several producers shuttering equipment) - the October pulp increase of $30/MT for HBSK and SBSK is being being paid.

Worldcolor to End Production at Olive Branch Plant

Worldcolor (previously called Quebecor World) will stop production at their Olive Branch, MS printing facility by end of this year , 2009. Two other divisions will take over the production upon closure.

Monday, October 05, 2009

Flexible Packaging Demand to Increase

Excerpts from Converting Magazine
World demand for converted flexible packaging is forecast to increase 3.5 % annually to over 19 million metric tons in 2013. Factors contributing to this rising demand will include growth in food and beverage production, which represents the largest market by far. In addition, cost, performance and source reduction advantages, will continue to favor flexible packaging products over their rigid counterparts.
Gains will be limited by the mature state of the packaging industry in developed areas such as the US, Western Europe and Japan, where the main markets for flexible packaging but are well-established.
The fastest increases will occur in the world's developing regions. Asia, Latin America, Eastern Europe and the Africa/Mideast region will all outpace the global average.
Some of the best gains are expected in China, which has surpassed Japan to become the world's second largest converted flexible packaging market (behind the US); and India, which will benefit from strong growth in domestic output and consumer product markets. The fastest world growth (5.2%/year) is forecast for the Asia - Pacific region. Rapid gains are also expected in Russia and Indonesia, which will benefit from greater investment in state-of-the-art manufacturing equipment, resulting in improved product quality.
Plastic films, which account for almost three-quarters of global converted flexible packaging material demand, will continue to make inroads at the expense of paper and aluminum foil.

Ahlstrom Joins in with Price Increases

Ahlstrom is beginning to inform customers about price increases on all of its specialty paper grades, a result of rising costs for raw material and energy.
Ahlstrom's Specialty Papers segment has production sites in Brazil (Jacarei), France (Bousbecque, La Gere, Pont-Audemer, Rottersac, Saint-Severin and Stenay), Germany (Osnabrück and Altenkirchen), Finland (Kauttua), Italy (Turin) and USA (West Carrollton).

Apple to Introduce Tablet ... it will Create a Challenge to Publications

Apple is aiming to redefine print using the Apple Tablet – just as they did with the computer, cel phone and MP3. The Apple Computer device is expected to be ready for sale in January. If the Tablet becomes popular for digital magazines, publishers will be correct in fearing a faster decline in printed material.

Please, also, visit PAPER NEWS for all the news on paper

Friday, October 02, 2009

USA Paper Shipments Continue to Fall

From a AF&PA Report -
A new report by the American Forest & Paper Association presents final data for the U.S. paper and paperboard industry for 2008 and shows total production of these products declined 4.9% to 88.4 million tons, the lowest production amount in 15 years.
“These results follow a modest 0.8% decline in 2007, and reflect the severity of the recession in 2008 on the paper and paperboard industry in the United States,” said AF&PA Chief Economist Dr. Stanley Lancey.
The report shows the peak year for paper and paperboard production in the United States was 1999 when production totaled 98.6 million tons.
Ironically, worldwide economic forces suppressed imports to and boosted exports from the U.S. during 2008, according to Dr. Lancey. The report shows imports of paper and paperboard declined 9.5% in 2008 while exports increased 6.1% to an all-time high of 15.5 million tons.

Europe Reports on Downward Paper Demand

Report from CEPIPRINT
(tonnage figures are in metric)
The Association of European Publication Paper Products, reported a decline across all European paper in demand and shipments in August.
• Coated Mechanical demand dropped 16.5% to 527,000 tons, shipments down 18% to 635,000 tons. Volume to US/Australia down, with growth to Japan.
• SC-Magazine demand dropped 10% to 300,000 tons, shipments down 16.5% to 346,000 tons. Exports down 43% to 46,000 tons, due to US/Australia/Brazil.
• Uncoated mechanical demand fell 18% to 150,000 tons, shipments down by 22% to 183,000 tons.

Advertisings Spending Still on the Decline

Spending on advertising across 27 countries dropped nearly 6% in the second quarter, (note; less than 1Q09 drop of 8%).
Some highlights-
Asia spending +2.2%
North America down 15.9%
Europe down 9.1%.
Marketers in automobile and financial services cut back most, while retailers, consumer product and health care increased slightly.

Thursday, October 01, 2009

Nielson Online Reports top Sites for News

Each month Nielson reports on the top sites, by unique visitors, for learning about current events. Note, only three newspaper websites hit the top ten list – NY Times, Tribune, and Gannett.
August results-
Yahoo! News -- 43,469,000 -- 7%
CNN Digital Network -- 38,024,000 -- (-2%)
MSNBC Digital Network -- 36,450,000 -- (-30%)
AOL News -- 26,309,000 -- 14%
NYTimes.com -- 17,183,000 -- (-13%)
Fox News Digital Network -- 16,999,000 --- 22%
Tribune Newspapers -- 15,801,000 -- (-10%)
ABCNEWS Digital Network -- 13,873,000 -- 4%
Google News -- 13,442,000 -- 11%
Gannett Newspapers/Newspaper Division -- 12,981,000 -- (-10%)

Are Printed Catalogs a Goner?

Most of the successful catalogers now compliment their respective printed publications with an on line e-ecommerce website. In today’s challenging economy, with distribution and printing on the rise, many are now focusing on the electronic editions. Websites allow for efficient speed, accessibility and overall ease over the printed catalog. Biggest benefit with online catalog is the large audience capability to expose potential end users. The web allows for timely data and updates on both current product offerings and new items. The online catalog also provides side-by-side comparisons and 24/7 satisfaction.

Wednesday, September 30, 2009

Top Paper Producers

Pulp and Paper International just reported on the top producers for 2008. The list illustrates some changes in that several mills merged or shuttered equipment. International Paper remains at #1, but two Chinese names entered the list, Shandong Chenming and Nine Dragons. Also companies such as Koch (GP), Kruger, White Birch, Asia Pulp and Paper, and APRIL did not make this list. Check Coy Paper's web site on Industry Resources Tab for more details.
Top Producing Areas tons per year (% world)
North America – 70,020,000tons paper (35%) / 13,921,000 mkt pulp (37.4%)
Europe – 70,480,000tons paper (35.4%) / 8,679,000 mkt pulp (23.3%)
Asia – 48,175tons paper (24.2%) / 1,884,000 mkt pulp (5.1%)

Top 10 Producers /2008 sales for paper and pulp
International Paper $24,782,000
Procter and Gamble $13,898,000
Stora Enso $13,450,000
Svenska Cellulosa (SCA) $13,427,000
UPM $13,043,000
Oji $11,084,100
Smurfit $10.335,500
Kimberly-Clark $9,992,000
Nippon $9,983,400
Mondi $9,284,300

Top 5 Tonnage producers (000's)
International Paper 17,128 tons
Stora Enso 11,746
UPM 10,641
AbitibiBowater 7,589,000
Oji 7,381

RISI Casts Shadow on Future of Paper Demands

John Maine of RISI advised that the decrease in shipments of 15 million tons of fine paper between 2007 and 2009 may never return because of all the major changes in electronic substitution and imports to North America and Western Europe. Worldwide there was a 3% drop in 2008 and 11% decline in 2009. A mild recovery is expected over the next year, but not to pre 2007 levels. Coy Paper news releases continue to report on China and India demand maintaining a growth of 3-4% with 4 million tons of new capacity coming on-line in China, mostly coated freesheet.

AbitibiBowater to Sell Texas Paper Mill

AbitibiBowater is reviewing the possible sale of its Lufkin, TX mill to CIT for $20.5 million. The plant has been closed since Dec. 2007 and consists of 895.5 acres of land, suitable for industrial development. The sale would save AbitibiBowater $3 million a year and would protect them from any environmental liability, which would be assumed by CIT.

Tuesday, September 29, 2009

Update on Uncoated Woodfree Papers

Although the majors (incl Domtar, IP, Glatfelter, GP and Boise ) all announced a $40/ton price increase for uncoated freesheet grades (all except business papers) the reality is the price is just being implemented. A quick check of the market, 50-lb offset roll prices range from $805-835/ton and cutsize grades range from $1010-1060/ton.
The market is in an interesting position, pulp prices are up, demand is OK at best, inventories are low (due to curtailments), BUT, Portical has a monster of a paper machine with tons to sell. See more on the Coy Paper site under the tab for Industry Resources and news.

Coated Market Trying to Improve Price

Several of the the major producers of publication grades, NewPage, Myllykoski and Verso Paper, are working hard with end users to increase the price of their products by reducing discounts. However, Coated Groundwood list prices in September remained flat at $770/ton. Buyers continue to report overall demand remains weak and producers continue to take downtime.

A recent survey of manufacturers of coated Groundwood publication papers revealed shipments were down 8% for 315,000 tons (vs. 2008) for the month of August. Meanwhile, the producers of Coated Freesheet reported shipments were 300,000 tons or down 17% (vs. 2008) during August.

Containerboard Shipments take Slight Drop

The Containerboard producers saw a slight decline in September and prices also fell by $10-20/ton. This is consistent with declines in recent months. We have reported on box shipments falling most of the year; August shipments continued the decline with 9.5% decrease from 2008 (Nearly 10%YTD so far 2009).
Spot prices on 42-lb unbleached kraftliner for Midwestern converters is in $450-470/ton range, and Northeast as well as West Coat is in the $420-440/ton range.
Some buyers report the small recycled mills as low as mid-$300/ton levels.

Monday, September 28, 2009

Paper Market Recap for August Shipments

Deutsche Bank just reported August and year to date paper shipments for printing & writing papers from North American producers.:
Uncoated Free Sheet, -10.8%YTD / -14.1%(August),
Light Weight Coated groundwood publication -8.2%YTD / -28.0% (August)
Coated Free Sheet -14.4%YTD / 25.1%(August)

Another Uncoated Paper Machine Announced for China

Hamadan Baiyun Paper announced they will build a 280,000 TPA uncoated printing/writing Paper machine in China, slated to start up in March 2011. They also plan a new 100,000 TPA pulp line. This mill has current production of 7 small with uncoated machines that produce capacity of 100,000 TPA and a 37,000TPA pulp line.

Pulp Inventory Down, Shipments Up

The pulp market enjoyed shipments of 3.6Million tons for August, which is a 13% gain (vs. August 2008). Inventory levels at the producing pulp mills were down to 27 days supply, versus 41 days in August of 2008. Of particular note was Chinese shipments increased 23% from July to 830,000 tons – up 132% from 2008!

More on the Antidumping Charges for Coated Paper

The USA producers of coated paper, NewPage, Appleton, and SAPPI, continued to charge China and Indonesia on specific printing and writing coated papers. Recall we reported on similar charges against these countries in 2007 and the International Trade Commission ruled against the charges.

Thursday, September 24, 2009

Cascades Acquires two More Recycling Plants

Cascades announced the purchase of Sonoco Recycling and Yorkshire Paper Corp. Both of these companies provide on-site collection for retailers recyclable materials such as corrugated containers, paper and plastics. Yorkshire collects nearly 24,000 tons from retailers in New York and New England and Sononco collects 190,000 tons across Canada.
Cascades now has 19 recovery facilities supplying the company with half of the 2.2Million tons Cascades processes in their paper making process.

USA Containerboard Shipments Down

Production for the USA containerbroad producers fell nearly 10% in August (vs. August of 2008) and July shipments appeared flat (vs July 2008). The AF&PA reported containerbroad production this year is down over 12% (vs 2008 YTD). Components of this market were also down - Linerbaord down 12% and Medium fell 13% (vs 2008 YTD).

Will Imports Harm USA Paper Producers

As of today, I know of no USA producers in discussions for building a new uncoated paper machine and increasing capacity. Meanwhile, Portucel is ramping up production in Portugal and eyeing the North American market. Also, South America is introducing new capacity and surely the USA will be in their marketing plans. Unless demand in North America increases, this new supply could yield a sloppy uncoated freesheet market for years to come.

Coupons Making a Comeback ?

Paper ‘cents off’ coupons have been around for 100 years, and although redemption peaked in 1992 at 7.9Billion coupons, by 2006 through 2008 the redemption fell to 2.6Billion a year. However, with the current recession, marketers believe coupons are growing again. Initial reports indicate redemption is up 10% during the fourth quarter of 2008 and they increased nearly 25% so far in 2009. In the past, newspapers served as the primary source for coupons, now websites such as coupons.com offer printable versions and several sites allow the end user to customize exactly which stores or items to alert end users as to what is on sale. The next frontier is thought to be mobile coupons, forwarded to the smart phone. The New York Times reported the bulk of coupons are still clipped from weekend newspapers and digital coupons accounted for less than half of one percent. Let’s hope the newspapers can hold on to this... declining coupons from newspapers means decreased newsprint consumption and one more reason for the end user to not buy a newspaper!

Please, also, visit PAPER NEWS for all the news on paper

Wednesday, September 23, 2009

No Challenges to Recent Pulp Prices

Snap Report from Paper Association -
Pulp price increases announced throughout the world, effective with October shipments: Arauco of Chile to increase prices in China on 3 grades of pulp, Donghae Pulp of S. Korea to raise BHK in China, Canfor Pulp to raise NBSK in NA and Asia, Domtar to raise NBSK in NA, Sodra and Fibria to raise NBSK in Europe

China Boosts Paper Production

Chinese paper production was over 50 million tons (up 6.2%) for the first half of 2009. Several closed mills re-opened with a reviving economy yielding increased demand, and low cost raw materials. Note, China imports approximately 60% of their pulp (8.25 million tons) up 40% vs. last year.

Tuesday, September 22, 2009

Coy Paper and Vallely Blog on Twitter

All the news releases P. Scott Vallely reports on in the Current News on the Pulp and Paper Industry can be found with daily updates on Twitter. Click onto https://twitter.com/CoyPaper. Many of the releases are documented before they become public information. The twitter updates are convenience 140 character summers of each release and come right to your computer. The releases can also be found on the Coy Paper Web site at http://coypaper.com and click onto the industry resources tab. Also, an RSS feed is available. Happy reading. Would enjoy hearing some feedback.

Catalyst Paper in Talks to Restart Elk Falls Mill

Catalyst is in the middle of presenting a plan to restart production at the Elk Falls paper mill in British Columbia. The proposal is to start up at least 2 paper machines and begin a profit sharing system based on earnings in return for changes to wages and benefits. Elk Falls was shut in early February.

Will USA Manufacturing Ever Come Back?

Scary thought surrounding the pulp and paper industry is whether the production will return to normal times. Most think that manufacturing will see signs of life before 2012, but the industry will see more automation and more globalization of supply- good for companies – bad for employees. As the economy crawls out of recession and workers return to various factories and offices and homes begin to be brought – the forecast is for more paper (copies, invoices, acknowledgements, etc.) and more containers (more consumer units requiring corrugated container for packaging) demand. But, will China, India, Brazil and Russia fill the demand for paper?

Monday, September 21, 2009

AbitibiBowater Shutters Several Mills

The Coy Paper Company Blog continues to report on poor advertising and declining publication circulation because of the current recession.,
Like many forestry companies, AbitibiBowater has been hit hard by the slump in the North American advertising industry during the recession. Most publishers have cut the size of newspapers and magazines, reduced basis weight, switched to more economical papers, and decrease print runs in an effort to survive - all leading to less paper.

AbitibBowater just announced they will indefinitely close three Canadian mills and several paper machines involving four other mills, including one in the USA.
The company is slowly releasing details, but we understand mills effected include one of two newsprint machines in Clermont, Que.; the company will idle one of the machines at its Coosa Pines, AL paper mill indefinitely. The digital printing paper mill in Beaupre, near Quebec City, will be shut down completely; and, commercial printing operation at Fort Frances, Ont., will be closed. The industry has witnessed a 30 percent drop in demand in newsprint since the beginning of the year.

Has Newspaper Advertising Seen the Bottom?

Most advertisers on "Madison Avenue" still believe the advertising community has not seen bottom yet, but see some relief starting in Early 2010. The forecast for the third quarter of 2009 is for newspaper advertising to be down 25% from 2008, and estimates are for a poor forth quarter, but something better than the 3Q2009 decline.
The Newspaper Association of America recently reported a drop in both print and digital ad revenue of 16.6% for 2008, and 2009 will be worse. Beyond the challenges print media has for advertising dollars, retailer's sluggish sales have also hurt spending budgets. Let's hope for strong Holiday promotions!

InPlant Printers Report on Paper Usage

InPlant Graphics just published a survey conducted with nearly 400 InPlant printers.
-Most common paper orders, Colored at #1, Cover Stock, Bond, Copier, Carbonless (near the bottom of the list was Inkjet Paper)
-Generally it is the Inplant Manager or Plant Supervisor that is responsible for ordering paper
-Note: most buying is by function NOT by brand name
-When asked about 'going green', most would go green BUT not if paper is more expensive
-Most inPlants ordered LESS paper so far in 2009 vs this time in 2008
-Most Inplants purchase paper through a local merchant and spent $75,000-$200,000/year on average.

Tuesday, September 15, 2009

Market Pulp Price Increase Flys without Resistance

The newest pulp increase of $40/MTon from all North American NBSK producers went into effect without resistance for buyers in North America, Asia, and Europe. The industry has witnessed lower inventories, higher than expected demand, weaker dollar, and return of a strong Chinese demand. Once fully implemented, the new market list price will be $770/MTon for NBSK (a 10 month high). Note, the major buyers and large spot buyers use the list price as a bench mark for discounted levels. Spot pricing is estimated to be around $620-640/MTon.
As reported in past releases, Catalyst Paper, Domtar, Fraser Paper, Terrace Bay
and Nanaimo Forest Products have announced starting up curtailed equipment in an effort to supply the increased demand.

Magazines Review Measuring Effectiveness of Advertisiments

Mediamark Research & Intelligence (MRI) continues to penetrate the magazine industry and their advertisers to increase advertisers' confidence in the effectiveness of printed advertisements. The MRI system (called AdMeasure) assists in confirming and measuring the reach for magazines' audience.
MRI will measure consumer recall and response to an advertisement.
MRI says AdMeasure will raise print ad measurement to the level of TV and Internet ratings.

Please, also, visit PAPER NEWS for all the news on paper

Monday, September 14, 2009

More New Paper Grades Introduced

The major paper producers are busy introducing and marketing new paper grades. Along with the Ideal and Octane product introductions we reported earlier, the NewPage mill has also offered Arbor Plus which is a #2 quality sheetfed paper containing 30% recycled fiber and many certifications. Xerox recently marketing a coat one side digital paper for direct marketing applications.
Meanwhile, Verso is now aggressively selling their Clarity Supercalendered grades to compete against the more expensive coated groundwood products. Verso is producing both Clarity A and Clarity B out of the Sartell, MN facility. The product is targeted for catalogues and offers an economic benefit to the traditional #5 groundwood coated grade.
Note, Veros earlier started to produce light weight uncoated Versobook, Versotext, and Versoblend out of the Bucksport, ME mill.

Paper Industry Pocket over $3billion in Tax Credits

The USA pulp & paper mills earned over $3billion in “black liquor” credits for the 1st half of 2009 and are expected to earn even more in 2nd half. The program is scheduled to expire at the end of the year.
A few examples include International Paper has earned $1billion, Domtar, Verso, NewPage and AbitibiBowater have each recording $100million.

Magazines Announce Management Shakeup

In an effort to generate additional revenue in this challenging market, several magazines are making many changes in management. Reader's Digest will be announcing their top management changes this week and Hearst announced several executive positions changing for both O (the Oprah Magazine) and Country Living.

Friday, September 11, 2009

Federal Reserve Reports Recession Ending

Chairman Ben Bernanke reported that the economy has started to grow once again in the current quarter. Also, many analysts predict the economy is growing in the current July-September quarter at anywhere between 3 and 4 percent.
Most of that growth should come from more spending from businesses, which had slashed investments -- often by double-digits -- during the recession.
Consumers are also beginning to spend money, as witnessed by the success from the 'cash for Clunkers' program.
Manufacturing, meanwhile, reported "modest" improvements. Residential real-estate markets, which were hurt during the downturn, also illustrating signs of improvements. But the commercial real-estate market continued to be a drag in most markets.

NewPage to Shutter Coated PM in Maine

NewPage announced they will shut a coated groundwood (publication) paper machine in Rumford, Maine for the last 2 weeks in September. The mill’s output will be reduced by 6,000 tons.

Analyst Comments of Poor Newspaper Advertising Recovery

Wells Fargo researchers recently commented on a potential advertising recovery in third quarter.
The Wells Fargo team said ad revenue has stalled in August while September appears to be starting off weak. Specific focus was on the Gannett Group, a bell weather for the Newspaper industry.

Wells Fargo reduced its Q3 newspaper advertising revenue estimate for Gannett from a decline of 25.5 percent to a decline of 28.8 percent. Local is forecast to fall 22.5 percent, national is anticipated to drop 21 percent and classified is estimated to decrease 40 percent (versus a previous -19 percent, -18 percent and -37 percent respectively).

Overall advertising revenue is expected to fall 20.2 percent in Q4, revised down from a decline of 16.9 percent.

Thursday, September 10, 2009

Update on Pulp Markets

As noted in our past releases, the entire pulp market has increased the price of pulp - both softwood and hardwood. If this $40/ton price goes through, and we think it will, the new NBSK 'list' price will rise to $770/mton in USA and $740/mton in Europe, and $650/mton in China. Reports outline the spot transaction price in USA for NBSK will go to $585-615/mton. Producers such as : Catalyst Paper, Domtar, and Fraser Paper, have all announced pulp mill restarts.

Kraft Market Showing Improvement

The Kraft Paper producers in North America have announced a $40-50/ton price increase. The manufacturers report recent strength in order backlogs, a pop in raw materials costs,
capacity curtailments, and the recent weakening of the dollar have all strengthen the market. .

Curtis Mill Purchased

Georgia Pacific and International Paper jointly purchased the old Curtis Mill in Milford, NJ and will clean up the site. The mill produced 175TPD of waxed cereal bag liners.

Brazil's Pulp Market Shows Strength

Brazilian pulp industry is starting to recover from the weak global demand for pulp and paper products, according to Wood Resources International (WRI).
In April, pulp exports equalled 766,000 tons, up 43 percent from the previous month and 140 percent higher than shipments a year earlier, WRI said in its Wood Resource Quarterly report.
The Brazilian pulp companies have benefited from closures of pulp mills resulting in reduced production capacity in the Northern Hemisphere and an increase in demand for pulp in China
Production reached 12.8 million tons, which was up from 11.8 million tons in 2007.

Wednesday, September 09, 2009

More on Coated Market Pricing

Most of the major producers of both coated free sheet and coated groundwood publication papers state the rate of decline in demand has slowed over the past few months. As reported earlier, Verso and NewPage have taken this opportunity to introduce price increases of $40/ton on Coated Free grades and an attempt to reduce discounts and increase transaction prices of $20/ton is solidly in the market for the publication grades.
The mills have experienced increases in input costs such as pulp and energy, also inventories levels have declined. Our read is the industry has a good chance of increasing transaction prices for coated papers - but may require market related curtailment of capacity to control supply.

All Major Mills Increase Newsprint Price

As a follow up to our earlier report, all of the major North American producers of Newsprint have now joined in announcing a price increase of $70/metric ton. The industry has really been licking its wounds, with a low market price in August of $470/metric ton - now mills such as Kruger, White Birch, Catalyst, Norpac, and Tembec have joined AbitibiBowater with the increase.
These mills make up 9.6 million metric tons of capacity.
All are introducing the price in two increments (September / October in East; October/November in West)

Georgia Pacific and International Paper jointly purchased the old Curtis Mill

Georgia Pacific and International Paper jointly purchased the old Curtis Mill in Milford, NJ and will clean up the site. The mill produced 175TPD of waxed cereal bag liners.

Box Company to Pack Up and Leave

Smurfit-Stone Container Corp., a Missouri-based company, is planning to close its box manufacturing plant in Portland, leaving 93 people unemployed.

Tuesday, September 08, 2009

Coated Paper Price Hikes Attempted.

Verso announced $40/ton Coated Free Sheet price increase for shipments after September 15. NewPage followed this announcement and added a $20/ton hike on their coated publication grades. Many buyers were surprised. The market is still experiencing overcapacity. Perhaps, the shuttered equipment has created a shortage of supply to yield a tightening availability?

New Magazines to make debut

Although we generally report on the poor health of the magazine industry, a few recent magazine launches include: Afar, 944 Media Atlanta and Detroit, Port City Life as Maine, Bi-monthly UFC, Energy Efficiency & Technology, Healing Lifestyles & Spas , Vitamin Shoppe’s publications Amazing Health and Muscle & Performance. We wish them good luck in this challenging climate.

NewPage will Produce Uncoated Grades

NewPage Corporation, once 100% coated papers, will expand it's uncoated offering with two new products, Octane and High Octane.
Octane is an 80 bright, uncoated mechanical paper produced in Whiting, Wisconsin and is engineered for both heatset and coldset printing applications and has a standard offering in 35 lb., 38 lb., 40 lb. and 45 lb.
High Octane, an 84 bright, uncoated freesheet paper produced in Rumford, Maine is manufactured for heatset presses in a range of basis weights from 35 lb. to 45 lb.

UPM and Xpedx Ink Deal

UPM signed a multi-year agreement with Xpedx on distributing selected coated paper to commercial printers in the US and Canada. The paper will be available through all Xpedx distribution outlets and is ensured with PEFC or FSC standards.

Friday, September 04, 2009

Freedom Communications Becomes Statistic

Freedom Communications, who owns The Orange County Register of California and 30 other dailies, filed for bankruptcy. Under reorganization, 26 secured lenders will take over. Owners: the Hoiles family, Blackstone and Providence Equity will have equity stakes reduced to 2%.

Update on the Kraft Paper Market

The Kraft industry is witnessing increased demand in Kraft Paper and therefore the $40-50/ton price advance announced by major USA producers is gaining traction. Back logs have expanded from a few days to weeks.

Update on Market Pulp

We continue to report on the strength of the pulp markets, and this week is no different. All the major NBSK and hardwood producers announced $40/ton price increase for September. This will be the fourth consecutive price hike in North America and the fifth in Europe, and sixth in
Asia. Reports in the USA for spot transactions reveal NBSK price rose to $585-615/mton. The increases are a result of reduced inventories, continued strong demand in China, and increase in USA demand.
We also note, manufacturers such as Catalyst Paper, Domtar, and Fraser Paper have announced mill
restarts.

Update on Uncoated Woodfree Paper

It appears the recent announcement by the major North American producers for uncoated woodfree papers ( offset and commercial printing grades) for $40/ton is taking hold. This increase, effective with September shipments, excludes cutsize paper and converting grades. The primary factors supporting the higher paper prices include higher pulp prices, increased demand, and lower mill inventories from extensive curtailments and reduced imports.

Newsprint Advertising Down

According to the Newspaper Association of America, print ad sales plunged by more than 30% in the second quarter from a year ago, the worst decline on record. It's also steeper than the 29.7% drop registered in the first quarter -- which had been the worst decline on record.

A recent survey by MORI Research indicated "newspaper advertising remains the leading advertising medium cited by consumers in planning, shopping and making purchasing decisions." The research concludes that when the economy eventually begins its recovery, advertisers will return to spending, and newspapers will find themselves extremely well positioned to harness the strength of their print and digital platforms to build a brighter future. Let's hope this survey is right, for the sake the paper industry and the future of newspapers.

Coupons Arrive to Cell Phone

The newest marketing initiative is mobile coupons. Several new companies have emerged that are forwarding relevant coupons to folks that opt in to programs to electronically (via Smart Phone) receive coupons. This is becoming a growing feature and advertisers such as Kmart, Thyrsus, and Zales confirm the redemption rate is 15-20% (versus 1% for printed/ paper coupons). Another nail in the coffin for Free Standing Inserts and Paper.......

Thursday, September 03, 2009

USPS Predicts Mail Volume will return

The United States Postal Service is forecasting that once the recession ends marketers will be back mailing promotions and corporations’ will be mailing invoices. The service has been in trouble, current 2009 estimate is for deficit for USPS of $7Billion and mail has been trending down – 2006 – 213billion pieces, 2008-202billion pieces and 2009 estimate is 175billion pieces. The Postal Service believes the biggest culprits include 70% of households with computers now pay bills on line; electronic mailing of tax returns; and a big campaign for ‘less paper is greener for America’. Also, recently, marketing for direct mail including credit card offers and bulk advertising is way down. Another challenge is the increase of communication through smart phones and not mail.
With knowledge of all these challenges, USPS feels printed advertising is more powerful than electronic communication and marketers will return once the economy improves. Less mail means a lot less paper!

AbitibiBowater Raises Newsprint Prices

AbitibiBowater is beginning to inform end users that they will implement a $70/ton newspaper price increase in two stages. The first is a $35/ton hike on Sept. 1; followed by another on Oct. 1.

The pulp market Continue to Increase thanks to China

2009 has yielded many challenges for the Paper producers; summarized by limited success in holding, much less increasing prices. Newsprint producers have seen their prices drop to cash costs -mainly due to pressure from poor demand. While demand has not been stellar, the uncoated freesheet and packaging producers have maintained significantly better margins and are now looking at price increases for the Fall.
Pulp pricing, the basic raw material for all paper, has recently witnessed price increases and extended backlogs. The Chinese market has really assisted improved pulp demand.

Packaging Companies Downsizing

In a recent survey by PFFC, distributors for unprinted rolls and sheets reduced their workforce as well as converters of Tags, labels, and tapes as well as paperboard packaging and will not rehire until several months on increased orders are actually on the books.

AbitibiBowater Plans to Restart Paper Machine

AbitibiBowater Plans to restart the #6 paper machine in Fort Frances, Ontario for 3 weeks. If more orders are received, they may run it longer.

Monday, August 31, 2009

International Paper and Glatfelter Announce Paper Price Increases

IP and Glatfelter announced a $40/ton ($2/cwt) price increase on uncoated freesheet offset and commercial printing papers, effective with September shipments.

Printer's Sales Remain Down

Printing Industries of America states 1Q2009 printer sales down average of 9.4%. BUT, digital segment up 8.8%; Inkjet up 7.1%.

Update on Kruger's Coated Production

Kruger will permanently shut down coated production at its Trios River Mill in October. 3 paper machines and 2 coaters are included in the shut down.

Wausau Announces Price Increases

Wausau will increase the transaction price by $2.00/cwt. on the following products:
Exact® Index
Vellum® Bristol
Exact® Tag
Exact® Opaque Colors
This is effective with late September shipments.

Neenah and Cranes Announce a Partnership

Neenah Paper Company and Crane & Co. Inc. announced they have signed an exclusive partnership agreement for Neenah to manufacture, market and distribute Crane's fine business paper brands: CRANE'S CREST®, CRANE'S BOND®, CRANE'S LETTRA®, CRANE'S PALETTE(TM) and CRANE'S® Choice Papers.

Doubledown Unable to Sell Magazine Assets

We reported on Doubledown (a publisher of magazines aimed at the Wall Street elite) going out of business in February and filing for Chapter 7 bankruptcy. Updating that release,
an auction was recently held for Doubledown Media assets and most minimum bids were not met.
Examples include; the minimum bid for Doubledown’s Dealmaker was $100,000. For Corporate Leader and Trader magazines the lowest acceptable bid was $50,000. The minimum bid for Cigar Report was $25,000.
The minimum bid for all five titles was $300,000.
None of the auctions were successful – all bids too low!

Please, also, visit PAPER NEWS for all the news on paper

Friday, August 28, 2009

A Few Optimistic Positions on Paper ....

It appears the Pulp, Containerboard, and Uncoated Wood Free papers may see some relief and gradual improvement. In the past few weeks all three markets have stabilized, and in fact, Pulp and uncoated papers has actually witnessed price increases.
Although Containerboard has not enjoyed increased demand, the price levels appears to have stabilized. This has been largest assisted by massive curtailment of supply (see my past reports on Smirfit and International Paper downtime).
Pricing for uncoated papers are enjoying modest increases in transaction prices. In fact, the major producers have formally announced a September price increase of $40/ton for Offset, Opaque and Bristol grades. Many in the industry are forecasting the deep discounts will go away and the true effect of the September increase will really be $60/ton.

SAPPI Closes Paper Mill ' forever'

One of the largest producers of paper for magazines, books and high-end advertising, Sappi, North America, will permanently close the Muskegon, Mich., paper mill. I reported in March that this mill will be idled for an undetermined amount of time. This coated fine paper mill had an annual production capacity of 170,000 TPA.
The global economic downturn and reduction in demand of 32% this year has resulted in very weak demand for coated fine paper worldwide.
Products previously made at Muskegon have been and will continue to be produced at the other Sappi mills in Skowhegan, Maine, and Cloquet, Minn.

Wednesday, August 26, 2009

Portugal Paper Mill Studying New Machine

Portugal’s largest pulp and paper company, Portucelis, is considering expanding in the paper market at a time when larger rivals are cutting production.
The machine will have a capacity of 500,000 tons a year, making it the world’s biggest for the production of office and graphic paper. It will increase the company’s total paper production capacity to 1.5 million tons a year.

Big 3 Paper Producers in Europe Speak about Consolidation

From Reuters Wire Service
At Reuters Paper & Packaging Summit, Chief Executives from UPM, M-Real and Norske Skog spoke about the need for consolidation in the paper industry. UPM stated that they would be an active player, focusing on costs and balancing demand-supply.

Vibe Magazine to Return

As we reported in May/June, Vibe Media Group closed their doors, blaming the poor economy and a decline in ad spending. Vibe and Vibe.com recently announced that InterMedia Partners, a private equity firm founded by Leo Hindery, Jr., purchased the publication.
InterMedia is combining Vibe with the operations of another urban lifestyle magazine it owns, Uptown.

Catalyst Paper to Restart Pulp Mill

Catalyst will restart pulp production at its Crofton NBSK kraft mill on Vancouver Island, BC in October if market conditions continue to improve. The line will add 210,000 TPA.

Tuesday, August 25, 2009

Palm Paper's Newsprint Machine Starts up

The industry’s newest paper machine started up three weeks ahead of schedule. Palm Paper’s facility, on the River Great Ouse in the UK, will produce up to 400,000 tons of newsprint paper each year.

Reader's Digest Officially Files

As we reported late last week, Reader's Digest was evaluating a move to file for bankruptcy. This just became official. The filing will assist in reducing the $2.2billion in debt to $550million.

Another Reason for Fewer Newspapers

Just reading a piece from Jeff Jarvis (past editor of NY Daily News) and he outlines the fact that coupons are now available on line for free and listings for movies are now easily attainable online - this has hurt newspaper demand. He believes there was a large population that purchased newspapers for only the coupons. Many would also purchase a newspaper for the local movie listings – all now available online – for free. Certainly, two more factors leading to fewer newspapers is less disposable income for purchases such as a newspaper and electronic news seems to be picking up readers.

Please Visit PAPER NEWS for all the news on paper

Monday, August 24, 2009

Pulp Shipments continue to Increase

Perhaps the only shinning star in the industry is market pulp; whereby, reports for July shipments confirm an increase of nearly 4% from July of 2008. China continues to buy pulp and is certainly assisting the demand.
Worldwide inventories have decreased and we hear pulp is now under 30 days (versus 36 days at this time in 2008). Pulp prices are witnessing increases as a result from companies such as Canfor Pulp, Domtar, Aracruz, Suzano, Arauco, Botnia, Donghae Pulp, Mercer Intl, Tembec, VCP, Sodra, West Fraser and Winstone (price inceases ranging from $30-50/ton).

Is Digital Better?

I just saw an interesting report on the International Paper website comparing the ‘green’ factor of digital / electronic media and traditional paper. The document confirms paper being more environmentally friendly.
A few highlights
-Sustainability – Paper industry plants 3 trees for every one forested – trees are renewable. Computers are made from environmentally unfriendly materials that cannot be recycled.
Energy – Most paper producers today have power supplied from carbon neutral resources. Powering up a PC comes from electricity, which is produced from nonrenewal fossil fuel.
Recyclability – Paper is completely biodegradable and the paper industry recycles and reuses nearly 60% of paper that has been returned from the market. Computers, servers, cables, and monitors continue to end up in landfill......and are not recyclable.

Thursday, August 20, 2009

Update on Newsprint Market

Difficult for me to report an optimistic future for the Newsprint Market. I suppose one glimmer of bright light is that the balance of the world has not experienced as deep nor as fast a decline in Newsprint demand. Newspaper advertising in the USA continues to fall, and the trend does not appear to be stopping (FYI, advertising down 30% in the first quarter alone!).
USA newsprint demand for 2009 is forecast to be 5.3million tons. Production for North American producers was 10.4million tons in 2008 - the forecast 2009 is 7.6million tons.
Individual companies are particularly hurt; AbitibiBowater (world's largest producer of newsprint) lost $100/ton on its current shipments. Mr. Mark Wilde reported average selling price was $581/mton, while AbitibiBowater's average cost of manufacture was $688/mton. Note, larger buyers are reported to actually be purchasing paper at less than $400/mton. Again, not a rosy picture!

Market Pulp Prices Continue to Increase

Pulp prices in North America continue to increase with the latest announcements for NBSK list price in August heading north for the third month in a row, up $30/ton to $730/ton.
Currently, this market is witnessing reduced inventories - given strong demand from China and shuttered equipment reducing over all capacity.
Note, SBSK list price also increased $30/ton to $680/ton

More College Students Using Digital Texts

Notes from a report by Jim Milliot of Publishers Weekly

Many anticipate that 40,000 college students at over 400 colleges will use open source digital textbooks from Flat World Knowledge this fall. Flat World went live in spring 2009 with 1,000 students from 30 colleges using its offering.
The Flat World’s pricing/business model students allows access entire textbooks for free online; pay $19.95 for a PDF download; pay $29.95 for a black and white printed version or $59.95 for a color version, or pay $39.95 for an audio version. Books are available by the book or by the chapter. Study aids or also available for purchase.
Eric Frank, a cofounder of Flat World believes a quantum leap will occur for fall 2010 when he thinks the number of students could be between 120,000 to 200,000.
If more books are read digitally, this means less text paper sold ..... another challenge for the paper industry.

Hewlett Packard Concerned less People Printing

Hewlett Packard just reported a significant decline in ink cartridge sales. The challenging economy has resulted in massive layoffs and therefore fewer office workers producing printed copies. HP is evaluating a new environment upon which corporations are reducing costs and asking workers not to print unnecessary documents. This could be long lasting as the world is becoming increasingly more comfortable with digital documents.
Note, HP printing group accounts for nearly 25% of the total corporate revenue.

Several Shuttered Reed Publications back to the Presses!

Recall that Reed Business Information closed 13 publications in April and this week, John White announced his company will acquire these titles White will re-launch all by September, published under Associated Construction Publications Group (ACP), expecting collective revenue of $5 million in 2010.

Recycled PaperBoard Pricing 'on the move'

The industry just announced price increases for September shipments of $40/ton for all grades of coated and uncoated recycled paperboard by nearly all major North American producers to offset raw material cost increases. These producers include Strathcona Paper, Graphic Packaging, RockTenn, Sonoco, PaperWorks Industries, Caraustar, Newark Group and Ox Paperboard. Challenge is two fold - demand remains poor and most end users can not pass an increase through to their respective end users. Lots of resistence here .......

Wednesday, August 19, 2009

New Paper Mill in South Korea

Moorim announced a new Voith Paper paper machine to their DongHae site to manufacture woodfree coated, woodfree uncoated and machine finished coated paper with an annual capacity of 450,000 tons. This will be the 1st integrated pulp & paper mill in South Korea and is scheduled for start-up in spring 2011. It will be environmentally friendly, using the steam incurred during pulp production instead of fossil fuels.

Stora Enso to Shrink Workforce

In past releases, we had reported that Nordic paper companies experienced losses at the end of last year given slow demand from customers for newspapers and magazines. This year has not proven to yield any improvement and total production in the forest sector has slumped by some 30 percent.
On Finnish company, Stora Enso, will now lay off off up to 1,100 workers, cut production and close mills in Finland as the paper maker continues to struggle with dwindling revenue.
Stora Enso is one of the world's largest forest product companies making magazine paper, newsprint, fine paper, pulp and packaging boards.

Tuesday, August 18, 2009

Many Pulp, Paper and Board Companies Show Improvement

The Pulp & Paper Week publication just reported most US pulp and paper companies had higher earnings in the second quarter vs. first 3 months of this year. Lower input costs certainly assisted, but a major factor was from alternative energy black liquor credits (+$1.6 billion), which offset losses.

It's Chapter 11 for Reader's Digest

Household publication, Reader’s Digest, will restructure to reduce it's debt under a voluntary Chapter 11 filing. This will only affect their US businesses. The senior lenders will exchange much of their debt for equity.

Monday, August 17, 2009

Financial Times will charge per online Article

Financial Times, which has charged a fee for online news since 2002, announces model to accept 'micropayments' for individual articles. Many of the major newspapers are now reviewing models to generate revenue beyond online advertising as reported in past releases. Currently, most newspapers do not charge for online news.

July Paper Shipments look Promising

The American Forest & Paper Assn.just published the preliminary report for printing and writing paper shipments in July. The report outlined 1.464 million tons, down 15% vs. July of 2008, but up 5% vs. June 2009.
Results as follows-
Coated mechanical: 258,939 tons, down 19.1% vs. 7/08 and down 3.7% vs. last month.
Coated freesheet: 281.964 tons, down 16.2% vs. 7/08 and up 13.6% vs. last month.
Uncoated mechanical: 142.418 tons, down 25.1% vs. 7/08 and up 15.5% vs. last month.
Uncoated freesheet: 780.238 tons, down 11.2% vs. 7/08 and up 3.2% vs. last month.

Friday, August 14, 2009

Online Spending declined

Like printed advertising spending, online retail spending is starting to decrease. On line spending totaled $30.2 billion in the second quarter, a 1% decrease from $30.5 billion in the prior year. All advertising dollars are effected by the nearly 10% unemployment rate, rising gas prices, and consumers attempt to increase savings, - all contribute to reducing consumers’ discretionary spending.

Newspapers to soon charge for News on their websites

The Boston Globe and Herald as well as News Corporations’ New York Post and Times of London has announced it will start to charge end users to access their websites for news. All newspapers are aggressively seeking additional revenue.

Is the Economy bottoming out?

It is said the paper industry still follows the economic indicators, so it was good news to hear the Federal Reserve stated that the US recession was ending, due to consumer spending, financial markets and corporate inventory building stabilizing. The Fed cautioned that it would be a slow recovery and that they will keep short-term interest rates at virtually zero. Many economists believe we will not see any continuous signs until beginning of 2010.

Thursday, August 13, 2009

Fraser Papers Will re-Open Pulp Mill

Reversing a news release we published earlier, Fraser and their union forged an agreement, which will allow Fraser to reopen the pulp mill in Edmundston, New Brunswick, Canada by the end of August.

In-Plant Printers Report on Recession

The MindFireInc just reported on results from a survey which included many of the In-Plant printers. During these difficult economic times, survey results reported-
-Two biggest challenges for the printers included reduced budgets and difficultly attracting new business.
-Most believe that ‘things will get worse before they improve’
-All agreed that to grow revenue requires new services, self promotional marketing, adding new equipment and visiting end users.
-When asked about reducing costs, all reported they would renegociate prices with suppliers, cut internal staff, and change suppliers

Paper Companies are beginning to Report Results

The USA paper producers are beginning to report results for the second half of 2009, and most are announcing losses.
-Cenveo reported quarterly net sales of $397.6 million, down from $524.5 million for the same period last year. Cenveo recorded a net loss of $18.3 million
-NewPage, USA largest producer of coated papers, net loss of $6 million in 2Q was an improvement over the $21 million loss in 2008,
-AbitibiBowater reported a net loss of $510 million in 2Q, double 2008. Sales only $1.04billion.
-Domtar Inc. turned a net profit in its second quarter
-UPM-Kymmene Corp. , the world's largest magazine paper maker, reported a second-quarter net loss of euro8 million

Friday, August 07, 2009

Time Magazine closes Southern Accents Magazine

The Southern Accents magazine issue will print the final issue with the September/October edition. Time Inc., publisher of the magazine, announced advertising pages had declined by 37.4% in the first half of 2009. This magazine was a bimonthly with a circulation of 400,000.

AbibtiBowater Shutters 2 more machines

AbitibiBowater will shut down 2 more machines, both at the Thunder Bay, Ontario mill. Paper machine #4, which produces 146,000TPA of uncoated mechanical paper (publication), and #5Paper Machine , a 250,000TPA newsprint machine. Both will remain down until the markets improve.

Thursday, August 06, 2009

Update on Market Pulp

Notes from report by Deutsche Bank
North American NBSK list price rose for the second month in a row by $40/ton to $700/ton. This increase resulting from worldwide inventories for market pulp having declined, producer downtime and closures, as well as strong demand in China .
Local producers that have announced increases so far include
Canfor, Domtar, Northern Pulp, Tembec, and West Fraser slated domestic NBSK prices at $730/ton.
Other North American producers that have announced a $20-25/mton price hike on key hardwood grades include Alberta-Pacific, CENIBRA, Sappi NA, and VCP.
Meanwhile, in Europe, Botnia, Mercer Intl., Stora Enso, and Sodra have announced a $30/mton price hike on NBSK and hardwood grades.
Note, even spot price levels are expected to increase from the $560-590/ton net delivered from the July prices.

Market update on Containerboard

Containerboard prices, assisted with good demand, remain steady after falling $70/ton since its peak, last fall.
Note, it has been reported that spot prices for 42-lb linerboard range from $450-470/ton in Central US, and $410-440/ton in the Northeast region. Recycled spot prices are below $400/ton. US kraftliner export prices are still around the $320/ton FAS level.
I think these spot prices have remained constant for last 60 days, as well. (I welcome comments here)
Additional comments
-June box shipments down 6.5% from 2008
-Producers continue to streamline inventories and operating rates
-International Paper took 580,000 tons (21% of capacity) containerboard out during second quarter.
-Renew will restart 500TPD linerboard in St Francisville, LA

AbibitiBowater cuts Staff and Sells Timberlands

AbibitiBowater, North America's largest newsprint supplier and operating under chapter 11, reported it will eliminate 25% of its employees in its headquarters as well as sell $25.7million worth of timberland These are part of the $100million cost reduction plan we announced in previous release on this blog.
Meanwhile, Smurfit - Stone Container - another bankrupt company, will sell 1million acres of timberland.

Tuesday, August 04, 2009

More Downtime for Kruger

Kruger will reduce production at both its Trois-Rivières and Wayagamack mills for balance of this summer. Trois-Rivières will reduce coated paper production by approximately 7,500 tons and Supercalender Paper will be reduced 4,500 tons. Directory paper will be cut 2,000 tons at Wayagamack; note, coated manufacture at Wayagamack will not be affected.

Magazines Report less Sales at the Newsstand

Single copy sales for magazines sold at newsstands are predicted to be down for first half of 2009 (ABC audit not confirmed until late August). While some of this decline is a result of our poor economy, the majority resulted from publishers’ refusal to pay the increase for ‘per copy’ fees the distributors’ demanded. Statistics on specific magazines will be announced in coming weeks.

Coated Paper Prices Still in the Basement

Buyers and mills alike wonder when the decrease in coated paper prices will stop. For the mills, the black liquor credit, reallocating production to uncoated grades, and taking equipment out of production are all assisting; BUT, demand continues to shrink and buyers continue to deplete inventory already on floor. Unless magazine advertising increases, postal fees stabilize, and retailers boost catalogs – not much short term hope remains. One would assume the manufacturers are close to cash cost and, therefore, for survival ‘ have found the floor’.

StoraEnso Makes Loan to NewPage

NewPage is negotiating for a loan of $575million from StoraEnso. Note, StoraEnso already owns nearly 20% of NewPage (Cerberus Capital Management owns the balance). Recall, in 2007, NewPage purchased StoraEnso’s facilities in Wisconsin Rapids, Biron, Whiting and Stevens Point.

Friday, July 31, 2009

Black Liquor Credit Helps End User

The black liquor tax credit (a result of the Obama administration energy package) is driving down paper prices, according to NewPage, North America’s largest maker of coated paper. They claim the average selling price for coated paper probably declined by $40 to $50 per ton.

Fraser Paper Announces Changes

Jeff Dutton, Fraser Papers's president and COO has appointed Jim Gehrman to the position of vice president, Sales with responsibility for all of the company's paper product sales.

More Paper Mills May Close

from RISI report
Beyond announced shuttered machines, John Maine of RISI forecasts additional 3.6M tons of closures are likely around the world. John Maine, VP - Pulp and Paper at RISI, Inc and Project Team Leader, noted, "The market for uncoated freesheet in North America has been in decline since 1999, falling 5% and 8% for the past two years, and the drop is certain to accelerate in 2009.

Thursday, July 30, 2009

Coy Paper now on Twitter

If you enjoy reading these current releases, Coy Paper Company LLC in now updating the company's Twitter account daily with all the current trends on the Pulp and Paper Industry. You may wish to follow the very latest at http://twitter.com/CoyPaper.

USA Post Office Continues to Loose Money

As we reported in past, the USPS forecasts mailing approximately 175 billion less pieces and will loose as much as $7billion for 2009. USPS continues to review cost cutting measures such as only delivering mail 5 days/week; closing offices; and future payments for retirees.

Bigger trucks requested by International Paper

In order to cut costs and become more efficient delivering more goods in fewer trips, International Paper Company is pushing to allow bigger trucks on U.S. highways over the objections of road-safety groups. This would keep shipping costs down for all companies that ship full truck loads, such as Coy Paper Company.

Paper Distributor Xpedex to buy Gould Paper

Gould Paper (Canada), Ltd., a subsidiary of privately held Gould Paper Corporation, headquartered in New York City was sold to xpedx, a business of International Paper. Gould Paper (Canada) is distributor serving western Canada .

Wednesday, July 29, 2009

After 174-Year Run Michigan Newspaper Closes

The last edition of The Ann Arbor News will be printed this week, ending its 174-year history of delivering the news to Michigan's fifth-largest city.
The Ann Arbor News will be replaced with a website, AnnArbor.com, which will also produce a print edition twice a week.

Gannett Shuts Down Plant

Gannett Media is closing a printing and production plant by September in Wisconsin. The plant currently prints the Fond du Lac Reporter. Production of that paper will be shifted to Gannett's Appleton, WI, facility.

Friday, July 24, 2009

NY Times Reports Profit

After all the depressed news we report on the newspaper market, the New York Times reported a profit of $39.1million for the quarter (up from $21.1 million last year - and up from a loss of nearly $75million 1Q09). Although advertising revenue continues to trend down, the company has been successful in aggressive cost cutting. The company reported a 31.9% decline in ad dollars last quarter, while circulation rose 1.5% (due to increase in price). One important note, even the NYT internet ad dollars fell last quarter (down 4.3%).

Stora Enso Announcing it will Close Mills

Stora Enso, largest papermaker in Europe, will stop production at unprofitable mills as demand and pricing for paper remains weak. In a related announcement, UPM-Kymmene Europe’s second- largest papermaker, is also reducing capacity in Finland for the same reasons.

Thursday, July 23, 2009

Advertising Forecast to Fall for September Publications

September issue magazine ad pages totals are beginning to be revealed. Most numbers are down versus September of 2008.
Conde Nast ad pages in W declined 53% Allure fell by 52%, Self by 51%, Glamour by 42%, Vogue by 37%, Details by 35%, GQ by 32% and Teen Vogue by 32%.
Hachette Filipacchi announced Elle’s ad pages down 21%.
Hearst reported Harper’s Bazaar advertising pages fell 23-26% and Cosmopolitan 18%.
Time Inc.’s Essence ad pages decreased by 16%.

Another Large Coated Woodfree Paper Machine for Asia

Moorim Paper in Ulsan, South Korea ordered a 430,000-450,000 ton per year coated woodfree paper machine. The unit will be supplied by Voith Paper and is scheduled to start in June of 2011. Half of the production will be sold domestically and half exported to the U.S., Europe and to other countries in Asia.
Just last week, Shandong Huatai ordered a 500,000TPA coated and uncoated woodfree machine, which the company plans to install in Shandong, China and start in the first quarter of 2011.
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Wednesday, July 22, 2009

Pulp Prices Increase

Tembec announced to all its customers that they will be paying an additional $30/ton ($730/ton) for its Northern Bleached Softwood pulp. This is effective immediately. The increase includes exports. Many of Tembec's competitors are forecast to follow this increase.

Canadian Printer Exists Bankruptcy

After one year operating under Chapter 11, Quebecor World announced it will exit bankruptcy protection. The company secured $800million in financing. The new name of the printer will be World Color Press.

2009 Mid-Year Economic Report for Tag & Label Industry

notes from a report by Jack Kenny
Label & Narrow Width Association staff conducted a survey, converters reported a mixed bag of results. While most commented on sales declines as deep as 30 percent a few boosted increases as high as 50 percent. Profits were down for most, but up for others. Printers vented strongly against price increases by material's suppliers. The majority of them said they were unable to pass along those increases to customers, instead focusing on internal changes to reduce operating costs.
Yet the companies that buy labels still must buy labels, and they have been keeping the industry pumping along. Competition, by all accounts, is more fierce than ever. Clearly, converters directly tied to industries such as the automobile market continue to be hurt the most.

Tuesday, July 21, 2009

Containerboard Market sees Some Hopeful signs

Deutsche Bank reported stabilized pricing and recovering volume trends
prices have dropped $70-80/ton off last autumn's cyclical peak. However, prices were reported stable in June and appear stable again in July. Moreover, most industry players remain reasonably profitable at current price levels, despite a sharp drop in volumes. Industry consolidation, a proactive approach in managing supply & avoiding inventory overhang, and a weak US Dollar have all played a role in this performance. Additionally, domestic and export volume trends are recovering. June box numbers represented a first real sign of domestic volumes starting to improve.

Magazine Mergers Slow Down

There were only 129 media transactions reported for the first quarter of 2009, down 36 percent from the first quarter of 2008; values, meanwhile, plummeted 91 percent to a combined $1.3 billion.
The second quarter did not fare much better and most transactions were a result of distressed situations. Market valuations have been under pressure due to the lack of debt capital and a general perception of the M&A market as being a ‘buyer’s market’. The largest issue facing magazine M&A is the lack of senior bank financing.

Monday, July 20, 2009

Cox Enterprise Sells Three Newspapers

Cox Enterprises has sold three of its papers in Texas and Colorado. The Waco Tribune-Herald went to the Robinson Media Co. The Daily Sentinel and The Nickel went to Grand Junction Media (owned by Seaton Publishing). Cox is still seeking buyers for its newspapers in North Carolina and Texas including the Austin American-Statesman. Review other releases by Coy Paper for additional market information on the News Paper industry.

Fraser Closing Pulp Mill

Fraser will close its pulp mill in Edmundston, New Brunswick. The company must now buy pulp for its 475,0000 ton per year uncoated freesheet and mechanical specialty paper mill in Madawaska, Maine. Fraser filed for bankruptcy on June 18 as reported by Coy Paper earlier..

Forecast for Printing Industry

The forecast is for print advertising to fall 22.8 percent to $9.8 billion between 2008 and 2010 but will rise 14.3 percent to $11.2 billion by 2013, according to PricewaterhouseCoopers. However, circulation spending will continue to fall to $8.4 billion in 2013, down from $9.7 billion in 2008.
But a number of individual segments, including b-to-b publishing (-3.3 percent) and consumer magazine publishing (-1.7 percent) are expected to decline.
The current economic slowdown has acceleration digital migration. The report went on to comment on digital spending continuing to be the industry’s main source of growth, with revenues accounting for 25 percent of total sales in 2013—up from 17 percent in 2008.

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Friday, July 17, 2009

Obama administration Reviewing Tax Credits

The Obama administration continues to review the enormous tax credits the pulp and paper industry is enjoying. The new found money (which is badly needed) was discovered when executives in the industry learned that by adding diesel fuel to the black liquor already recovered and reused in the paper making process – the industry is entitled to the alternative fuel tax credit.

RISI names top 50 Paper Executives

The annual RISI ‘power’ list of paper executives was recently published. Many from Asia make the list.
Top 10 include
1 Jose Luciano Penido / Votorantim Celulose e Papel (VCP)
2 Chen Hongguo / Shandong Chenming Paper
3 John Faraci / International Paper
4 A J Devanesan / ARIL
5 Jose Honorio / Portucel Soporcel
6 Dr Wolfgang Palm / Palm
7 RR Verderah / BILT
8 Teguh Ganda Wijaya / APP
9 Duncan Pollard / WWF
10 Cheung Yan / Nine Dragons Paper
Notable mention at #50 was the Christian Church – the bible is the best selling book of all time. An estimated 100 million copies are sold every year.

Thursday, July 16, 2009

June Figures Out for Paper Industry

The American Forest & Paper Association reported early estimates for June paper shipments in the U.S. as follows: coated mechanical shipments fell 17.7% in June, as compared to June 2008, and declined 33.5% year-to-date, as compared to the same period last year. Coated freesheet (woodfree) shipments were down 23.9% in June and 29.3% year-to-date. Uncoated mechanical shipments decreased 30.3% for the month, 29.7% year-to-date. Uncoated freesheet (woodfree) shipments dropped 16.7% in June and 15.6% year-to-date.

CEPIFINE Reports Decline in May Woodfree Paper Shipments

report from CEPIFINE
The Association of European Fine Paper Manufacturers announced a 24.3% decrease in European coated woodfree paper shipments in May, as compared to the same month in 2008. Year-to-date shipments fell 26.6%. Exports declined 43.1% in May, 46.8% year-to-date. CEPIFINE reported uncoated woodfree paper shipments were down 16.1% in May, 17.4% year-to-date. Exports, however, were up 3.5% for the month, but fell 15.8% year-to-date.

Wednesday, July 15, 2009

Magna Forecasts 2009 Ad Revenue Decline

Another reference on the advertising revenue for 2009-
Interpublic Group’s Magna Global, the second largest owner of advertising agencies in the U.S., has predicted that ad expenditures will fall 14% in 2009 and not recover until late 2010. (Competitor ZenithOptimedia Group, a division of Publicis Group, forecast a decrease of 10.6% for the U.S. in 2009.) Magazine advertising revenue was projected to decline 18% this year, continuing to fall at a compounded annual basis of 3.3% per year from 2009 through 2014. Magna forecast growth in direct mail, however. Though the sector is predicted to loose 11.2% in 2009, it is seen as increasing 2% annually between 2009 and 2010.

More Bad News for Coated Papers

Shipments and pricing remain depressed for publication coated papers. Most buyers report prices fell $15/cwt in June (note, May also saw $15 decline - April down too). Printers report reduction in orders BUT, also they trimmed of inventory - this should help - but year to date demand is down approximately 35%. The catalog season should help.

Tuesday, July 14, 2009

Magazine Ad Revenue Falls 21% in First Half

As reported by MediaWeek July 10,2009
Magazine ad revenue tumbled in the first half of 2009 as the recession continued to take its toll on marketing spending, according to new figures from Publishers Information Bureau, a service of Magazine Publishers of America.

Rate-card reported ad revenue declined 21.2 percent to $9 billion on a 27.9 percent decline in pages in the first half, reflecting declines across the 12 categories that make up more than 85 percent of total magazine ad spending.

Categories seeing the sharpest declines were finance (down 48.8 percent), auto (off 47.8 percent) and retail (down 34.2 percent).

The scant good news: within the broader ad categories, there were upticks in ad spending for certain food products; soaps and hair products, which benefited titles with a focus on lifestyle, fitness and celebrities.

McGraw Hill may sell BusinessWeek

The struggling BusinessWeek Magazine is looking for a new owner. This is the last of McGaw Hill’s portfolio of magazines. Recent circulation is slightly under 1million and advertising pages has fallen 37% so far this year. Given the fact the publishing industry is doing poorly – school is out as to who might have the cash to purchase BusinessWeek.

Canadian Government asking Catalyst Paper for Taxes

Catalyst Paper has fallen behind on paying its taxes to four of Canada’s municipalities. The government is demands it must pay its full taxes.

Maine Stronger Paper Producers

Bangor Daily News recently released an interview with Keith Van Scotter, the CEO of Lincoln Paper and Tissue. He commented on the paper industry and specifically which facilities in Maine will survive. His picks included Verso of Jay and Bucksport – producer of supercalender and coated publications papers; SAPPI in Skowhegan and Westbrook – producer of coated free and technical papers; New Page of Rumford – producer of coated papers; and of course his mill Lincoln (in Lincoln)– producer of tissue paper.

Kruger Shuts Down Coated Machines

Kruger will shut down three machines and two coaters at its Trois-Rivieres mill in Quebec. The machines had a capacity of approximately 230,000 TPA of coated publication papers. Newsprint and supercalendered paper production will continue at the mill and Kruger will also keep making approximately 258,000 short tons per year of coated mechanical paper at its Wayagamack mill.

Monday, July 13, 2009

Buyers say no to Newsprint Price Increase

Beyond the struggle for revenue that most newspapers currently battle, purchasing departments site resistance to a price increase for the paper - one of their biggest costs. Most confirm that even though the trend continues for decreased readers and all agree supply from newsprint producers is down - but they have been unsuccessful reducing inventory. That is, demand for newsprint is falling faster than manufactures can curtail production.

International Paper sees Pulp Demand Growth

International Paper Co. Chief Executive Officer John Faraci , stated he expects a “modest” increase in pulp demand this year as Chinese orders make up for declines in most other markets, “Most of the growth is being driven by demand in China,” Faraci said. The growth will be in the “single digit” percentage range, he said.

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Friday, July 10, 2009

Will the Newsprint Increase Happen?

AbitibiBowater still not joining others in advancing newsprint price increase - I would assume without AbitibBowater - the August increase is a goner!

Advertising Dollars Remain Depressed

Nielsen’s Global AdView Plus reported that ad expenditures decreased by 7.2% for the first quarter of 2009, as compared to the same period last year. Spain, with a 28.2% drop in ad spending, led the way in making Europe the hardest hit region. Sales in the U.S. fell 12.7%. The Asia Pacific area announced a decrease of only 2.3%. Magazine advertising was down 17.4%, 22.2% in North America, and newspaper ad spending fell 9.1%.

St Mary's Paper Continues Shut Down

We reported earlier this year, St. Mary’s Paper was closing two of three paper machines in their Sault Ste. Marie, Ontario mill in May. These machines remain curtained. The company produces supercalender paper.

Top Print and Online Catalogers

Most catalogers report flat sales for 2008 versus 2007, top print and online catalogers include (account/catalog sales)-
Dell $51,936,000
Thermo Fisher Scientific $10,500,000
IBM $9,076,000
Staples $8,900,000
CDW $8,100,000
Henry Schein $6,400,000
Wesco $6,110,000
United Stationers $4,986,900
OfficeMax $4,310,000
Office Depot $4,145,700

Tuesday, July 07, 2009

Will Paper Industry Level Off?

After six straight quarters of paper price increases in 2007 and early 2008, we than witnessed aggressive discounts through the first half of 2009. Many now are beginning to think that inventories are low, manufacturers have curtailed production, and the catalog season is about to begin. If the paper companies maintain a policy of balancing supply with demand, ship dates and prices could advance. Perhaps by Spring of 2010?

Report on Paper Industry

Paper Industry Magazine just published a survey on the paper industry and highlights included
Paper and Paperboard capacity has contracted 7.3% since its 2000 peak.
-18 USA mills were permanently closed in 2008; shuttering 27 paper machines – 14 more machines were shut down at other mills
-In 2007, 17 mills and 38 machines were permanently closed.
-Paper and Paperboard are forecasted to decline another 1.8% in 2009

Magazine Closings Outpaced New Launches

Magazine closings outpaced launches in the first half of the year as publishers were squeezed by the advertising recession. A total of 279 folded while only 187 made their debut.

Monday, July 06, 2009

Top Book Publishers

I was doing some research of the Book Publishing Industry, a few notes of interest -
Of the 2600 book publishers in USA, the five biggest command 45% of the market share
15.5% Pearson
9% Houghton Mifflin
9% McGaw-Hill
6% Scholastic
5% Bertelsmann

Major American Book Segments

Major American Book Segments
The major Book Segments by revenue include
71% Trade Book
10% Professional Books
9.5% Religious Books
6% Elementary / High School Books
2.5% College Books
1% University Books

Friday, July 03, 2009

Paper Industry Continues to Recycle

The AF&PA confirmed that in 2008, the paper industry recovered 57.4%, up from 56% in 2007. The trend has been up for years; however, the current recession is allowing for less paper demanded and therefore, less paper will be available. The value of recycled paper has also declined. Note: paper and paperboard capacity in USA has decreased nearly 1% to 96.3million tons. AF&PA forecasts capacity will drop another 1.8% in 2009.

Domtar's Pulp Mill to Restart

Following a seven-week shutdown, Domtar is restarting its 398,000TPAnorthern bleached hardwood market pulp mill in Woodland, ME. All of the Woodland NBHK output for at least the next three months has been sold to China.

China’s Largest Newsprint Producer will Produce Coated

Shandong Huatai Paper, China’s biggest producer of newsprint, has ordered an 800,000 TPA coated woodfree paper machine from Metso Paper. The machine, will be 9.9 meters in width with a design speed of 2,000 meters per minute. A late 2010 start up is planned.

Thursday, July 02, 2009

Newsprint Market in Confusion

As reported in our past releases, newsprint prices have fallen around $195/ton or 28% so far this year. Demand has also steadily declined, but, Kruger, Catalyst, Tembec, and White Birch announced a $50/ton increase for August shipments, despite the weak market.
Newsprint demand in North America fell nearly 29% in May – vs. 2008 and 31.7% so far this year vs at this time in 2008. Furthermore, consumption at US dailies fell 26% and paper mills only are operated at 67% of capacity (vs. 94% in May 08).
Note: we continue to report producers continue to take downtime (693, 000tons or 27% of North America quarterly capacity during 2Q2009), the reality is that more permanent closures are
inevitable.

USPS Reports Loss for May

The U.S. Postal Service reported a $677 million net loss for May which yields a year-to-date loss total of $3.4 billion. Also, reported was a 20% drop in overall volume for May and a 13% decline year-to-date. Periodicals volume dropped 13% for the period and 7% year-to-date.

Wednesday, July 01, 2009

Gannett Reports more Challenges

The Gannett Co. confirmed it will reduce its workforce. The company is preparing to lay off more than 1,000 employees as the largest newspaper publisher's workforce continues to shrink along with its advertising sales. Note, we reported in past that Gannett reduced its workforce 3,600 from 2007 to the end of 2008.

Vibe Magazine Folds

Vibe, a staple of music journalism since 1993 and one of the most influential publications has folded. The company was unable to secure financial backing, or to restructure its debt. Declines in the music industry and in advertising worked against the business. It had been a tough year for Vibe, which faced a steep drop in ad pages and circulation. The magazines circulation base was 600,000 from 800,000. Vibe also had reduced its frequency from monthly to 10 times a year.

Kimberly-Clark Slims Down

The maker of Kleenex tissues, Huggies diapers and many other household items plans to cut 1,600 jobs, of its global work force, as it slims down in the tough economy.
Kimberly Clark does not plan on closing any plants.
Shoppers have cut back on spending because of the recession, high unemployment and the housing downturn. Meanwhile revenue, which had been steadily rising, began to fall late in 2008.

Thursday, June 25, 2009

Top Tag and Label Converters

Although the USA tag and label segments fared better than most in the Pulp and Paper industry, with 2008 growth at 2.1% - this was down from forecasted 5%. Many believe this segment will begin to witness consolidation. Top ten converters include-
RR Donnelly
Avery Denison
CCL
WS Packaging
Fort Dearborn
Multi Color
Nashua
York
Spear
MPI Labl

Erving Paper Operates under Chapter 11

The Erving Paper Company, which has a 40,000TPA operation in Massachusetts, continues to produce recycled tissue under Chapter 11. Management sited increased competition, and an underfunded pension plan as reasons for this protection.

Wednesday, June 24, 2009

More Downtime for Catalyst

Catalyst Paper will extend downtime at its recycled newsprint mill in Arizona by an additional 10 days. Catalyst’s Snowflake mill consumes more than 480,000 tons/yr of recycled paper that would otherwise end up in landfills

Chicago Tribune Makes Changes

The Chicago Tribune Magazine will cease as a weekly publication after July 28, as part of a series of changes to the Sunday paper to cut costs.
In a note to readers, Tribune editor Gerould W. Kern said the magazine will "appear as a series of themed magazines throughout the year—roughly once a month beginning in September."
Kern said declining advertising and high cost made weekly publication "unsustainable."

International Paper certifies most Plants with FSC

International Paper announced the expansion of its Forest Stewardship Council (FSC) Chain-of-Custody certification to include a majority of its U.S. pulp and paper mills. The company will be the largest FSC manufacturing platform across the globe..
With its expansion, International Paper's FSC Chain-of-Custody certification worldwide includes: three Coated Paperboard mills and its six converting facilities; four Pulp operations; six Industrial Packaging mills; seven Printing Papers mills and its sheeting operations; and a number of Foodservice and Shorewood manufacturing facilities.

Tuesday, June 23, 2009

Less Discounting for Uncoated Free Sheet

Although Coy Paper Company continues to witness price corrosion for Uncosted Free, the price declines appear to be leveling off. So far, for June, we only hear $5-10/ton discount from May. This results in 50lbs roll price $810-855, with spot pricing slightly below $800/ton,. Cutsize office paper transacts $120-1080/ton (spot below $1000). The two major producers of this grade, International Paper and Domtar, continue to take down time. May demand was down nearly 15% from May of 2008.

Containerboard Prices Remain Stable

Recent reports on market pricing for Containerboard point to staple pricing of approximately $540/ton fo