News SCAN

Canadian profits better in fourth quarter

Canadian paper and forest products companies reported sharply improved earnings in the fourth quarter of 1997 before restructuring and other one-time charges. Corporate profits for 16 companies surveyed by Pulp & Paper Week were C$116 million in the fourth quarter, reversing combined losses of C$9.9 million in the fourth quarter of 1996. The results were also an improvement over combined earnings of C$46.9 million in the third quarter of 1997 (Table 1).

Increased industry production and record shipments during the year, plus the weakness of the Canadian dollar against U.S. currency, helped offset some price weakness in Canada’ major exports of bleached kraft pulp and lumber. Pulp and paper shipments from Canadian mills totaled a record 29.4 million metric tons last year, up 5.1% from 1996. An 8% increase in shipments to the U.S. accounted for much of the volume growth.

Linn Macdonald, president and CEO of Noranda Forest Inc. and outgoing chairman of the Canadian Pulp and Paper Assn. (CPPA), said the industry as a whole just about broke even last year after accounting for major asset write-downs and restructuring charges by several leading companies. Before these charges, combined 1997 earnings for 16 paper and forest products companies were C$69 million, a sharp drop from combined profits of C$699 million in 1996.

• Saying that its results were affected by increased costs related to investments made last year, Uniforet Inc. said it will cut costs by C$10 million in 1998. The company said that this will include eliminating 41 employees; further details were not available.

1997 production a record 95 million tons

U.S. paper and paperboard production increased 5.2% last year, more than double the 2.5% average annual growth rate of the prior 10 years. Total production from U.S. mills was a record 95.1 million tons, up from 90.4 million tons in 1996, according to the year-end report of the American Forest & Paper Assn. (AF&ampPA). Shipments of market pulp also increased in 1997, rising 3.8% to 8.7 million tons.

International trade provided most of the growth, as exports expanded briskly. U.S. exports of paper, paperboard, and converted products rose an estimated 8.1% in 1997 and imports increased 10.5%. Since 1990, exports have expanded at a 9.8% annual rate, while imports grew 2.7% a year. In contrast, domestic paper and paperboard consumption rose at a 2% annual rate. Total international trade (imports plus exports) is now equivalent to nearly 30% of the industry’ domestic activity, up from 21% in 1980.

Industry productivity also registered strong gains in 1997. Mill operating rates averaged 94% for primary paper mills and 95.3% for paperboard mills. Worker productivity also improved. Production output per hour of work increased 6%, following a 2.2% jump in 1996. These productivity gains helped offset lower overall prices for the industry’ products. Paper prices fell an estimated 3.7% in 1997, according to the U.S. Bureau of Labor Statistics, while paperboard prices fell 6.7%.

The printing/writing paper sector increased domestic shipments by 7.9% in 1997, led by coated groundwood (up 18.5%) and coated free-sheet (up 10.1%). The gains reflected improved inventory trends and increased advertising activity. Magazine advertising pages increased 4.8% in 1997, reversing a decline of 2% in 1996. Third-class mail volume, an indirect measure of direct mail advertising and promotion, also increased last year. Also related to advertising volumes, newsprint shipments climbed 4.7% in 1997, reversing shipment declines in each of the prior three years.

The packaging paper sector also showed solid gains, as containerboard (linerboard and corrugating medium) production rose 5.5% in 1997. Corrugated box shipments, the principal factor driving domestic containerboard output, rose 3.3% last year, following a decline of 1.4% and 0.6% in 1996 and 1995, respectively. Containerboard exports increased 18% in 1997, after growing 35% in 1996. Boxboard production increased 3.8% in 1997, with exports providing nearly 90% of the growth. Exports grew 23% last year, while domestic folding carton remained unchanged and milk carton and food service board edged up by 1.2%. The other converting grades of boxboard, which includes paper tube, can and drum stock, and gypsum wallboard facing paper, increased 3.8%.

Canadian mills to add 1.3 million tons

Partial data from the 1998 pulp and paper industry capacity survey for Canada shows that capacity growth is expected to slow during the period from 1997 to 2000, adding approximately 1.3 million metric tons of paper and paperboard capacity, according to the Canadian Pulp and Paper Association (CPPA). The annual growth rate over the four-year survey period averages 1.4%, approximately half that of the 2.7% annual growth rate recorded from 1987 to 1997.

Capacity to manufacture paper and board will grow at an annual rate of 2.1% through 2000. The biggest growth segment is printing and writing papers, which is forecast to grow at an annual rate of 5.2%, adding 875,000 metric tons of capacity. A significant portion of this growth is due to Stora Port Hawkesbury’ new 350,000 mtpy SC-A machine scheduled to begin production in April.

Newsprint is forecast to lose 117,000 metric tons of capacity through 2000, for a negative annual growth rate of 0.4%. However, this follows a 0.8% capacity growth recorded in 1997 and 2% growth in 1996. Capacity of other papers, which includes kraft papers and tissue and sanitary papers, is forecast to grow at an annual rate of 1.8%, adding 68,000 metric tons of capacity through 2000.

Total board capacity, which includes containerboard and boxboard, is slated to grow by 472,000 metric tons to total over 4.42 million metric tons. Containerboard capacity growth will account for 274,000 metric tons of total board growth, growing at an annual rate of 3.1%, below the 10-year average growth rate of 3.8%. Boxboard capacity is forecast to grow at an annual rate of 5.7% through 2000, adding 198,000 metric tons of capacity. The biggest growth is expected in 1998, with 87,000 metric tons of additional boxboard capacity forecast to be added.

Market pulp growth is expected to grow at a minimal 0.1% annual rate during the 1997-2000 survey period, well below the 10-year average of 3.8% recorded from 1987 to 1997. While the capacity growth of 173,000 metric tons of bleached softwood kraft pulp results in a 0.8% annual growth rate, it will be offset by the significant drop in other chemical grades capacity— bleached sulfite pulp— 206,000 metric tons. The bulk of this decrease is due to the shutdown of the sulfite market pulp mill at the Stora Port Hawkesbury, N.S., mill, in conjunction with the startup of the new SC-A paper machine in 1998.

Significant changes in actual 1997 capacity figures, compared to last year’ forecast, were recorded in newsprint and containerboard. Actual 1997 newsprint capacity of more than 9.85 million metric tons was 179,000 metric tons higher than last year’ forecast and is the highest reported capacity since 1991, when Canadian newsprint capacity topped 10.1 million metric tons. The added newsprint capacity resulted in a growth rate of 0.8% for 1997 instead of a 1.0% capacity loss that had been forecast last year.

Actual 1997 containerboard capacity of over 2.86 million metric tons was 120,000 metric tons lower than last year’ forecast of over 2.98 million metric tons. However, the 1997 capacity growth rate was still a healthy 3.1% but well below last year’ forecast of 7.4%.

Bowater plans mill sale, major upgrade

Bowater Inc. plans to sell its 265,000 tpy coated and specialties paper mill in Millinocket, Maine, while investing $220 million on upgrading the nearby newsprint-directory mill in East Millinocket, the company said. Several parties have already shown interest in the four-machine Millinocket mill, which has been shifting its product mix from lightweight coated (LWC) to directory and groundwood specialty papers. The mills are part of subsidiary Great Northern Paper.

At East Millinocket, Bowater plans to build a thermomechanical pulp line that will replace a stone groundwood system and reduce mill operating costs. The mill’ paper machines, Nos. 5 and 6, will be modernized, and improvements made to the mill’ energy and electrical system. The work is expected to begin in early 1999 and take up to two years to complete. The mill has capacity to produce about 153,000 mtpy of newsprint, along with about 138,000 tpy of directory paper and groundwood specialties.

• Tembec Inc. said it paid C$35 million for 35% of the outstanding common shares of Pine Falls Paper Co. Ltd. Under the terms of the purchase of Pine Falls and its 171,000-mtpy newsprint mill in Manitoba, Tembec also pays C$65 million for the remaining shares in cash or Tembec stock. The purchase of the remaining shares continues through February 2001.

Nippon increases stake in Norpac

Nippon Paper Industries Co. Ltd. of Tokyo increased its stake from 20% to 50% in West Coast newsprint producer North Pacific Paper Corp. (Norpac). The deal was finalized in March. Based on capacity, the three-machine Norpac mill in Longview, Wash., is the largest producer on the West Coast with 700,000 mtpy. The mill ships about half of its output with the highest recycled content to Japan.

Weyerhaeuser Co. had owned an 80% share of Norpac, with Nippon having 20%. Under the new arrangement, Weyerhaeuser’ stake drops to 50%, and Nippon’ stake increases to 50%.

Abitibi eyes Avenor; bid said ‘’

Abitibi-Consolidated Inc., the world’ largest newsprint producer after a megamerger last year, in late February made a C$2 billion takeover bid for rival Avenor Inc. Abitibi-Consolidated offered to buy all the outstanding common shares of Avenor for C$28/share or exchange one Avenor share for 1.425 Abitibi shares.

“ take advantage of opportunities when they arise,” said Abitibi- Consolidated president and CEO James Doughan. He added that proximity and location of the two companies, both based in Montreal and with half their mills in Ontario and Quebec, was important and said Abitibi-Consolidated could realize C$430 million in synergies with Avenor. Avenor’ president and CEO Arthur Sawchuck called the offer “, underwhelming, and grossly inadequate.”

Avenor is the third-largest newsprint producer in North America and is the world’ eighth-largest, with 1.4 million metric tons of newsprint capacity. Avenor also has about 704,000 metric tons of market pulp, about 315,000 metric tons of uncoated free-sheet, and 448 million bd ft of lumber capacity.

With Avenor, Abitibi-Consolidated would be Canada’ largest paper company, well in front of MacMillan Bloedel Ltd. The combined Avenor-Abitibi-Consolidated sales for 1997 were C$5.7 billion (with C$2 billion from Avenor). As one, it would carve a wide swath in newsprint with capacity equal to about 32% of the North American market and 13% of the world market.

Stone settles FTC price fix charges

Stone Container Corp. and the U.S. Federal Trade Commission (FTC) in late February signed a consent order settling the agency’ alleged 1993 charges that Stone “ to orchestrate an industrywide price increase in violation of federal antitrust laws.”

Stone has admitted no guilt— it entered into the consent order to avoid costly and time-consuming litigation— the FTC noted that a consent agreement is for settlement purposes only and does not constitute admission of a violation of law. The agreement to settle the charges, however, bars Stone from any future activity that urges a competitor to raise or fix the price charged for linerboard.

The FTC alleged that following a failed attempt to increase the price it charged for linerboard in 1993, the company temporarily shut down production at its own mills and then bought up competitors’ excess inventory as part of an intentional effort to build industry support for a price increase. In a written statement on Feb. 25, Stone denied the FTC’ allegations of any wrongdoing and maintained that the FTC’ case is “ merit.” The FTC— admitting that the decree was a warning and not a punishment—, “ was a serious attempt to manipulate the market so that the industry could reach agreement on future price increases.”

Inland to shut Calif. mill, box plant

Citing outdated equipment and poor financial returns, Temple-Inland Inc. will permanently close and dismantle its 70,000-tpy recycled corrugating medium mill and box plant in Newark, Calif., effective May 15.

The mill closure is part of an ongoing realignment strategy for the company’ corrugated packaging system, which in this case includes teardown of a 40-year-old paper mill and some turn-of-the-century mill equipment, transfer of Newark’ box production to other California box plants, and a shift that prompts the company to purchase corrugating medium from outside suppliers.

Weston to become part of IP in merger

International Paper Co. (IP) and Weston Paper and Manufacturing Co. have announced plans to merge with an exchange of shares valued at $232 million. Weston, based in Terre Haute, Ind., operates a 200,000-tpy corrugating medium mill and 11 corrugated box plants, with annual sales estimated in 1997 at $220 million.

Weston will initially operate as a subsidiary of IP, but will eventually become part of IP in both name and product line. No box or mill facilities are expected to close, but roughly 5% of Weston’ 1,650 employees will be laid off, with plans to cut managerial and administrative positions at Weston’ Indiana headquarters.

Weston’ corrugating medium mill uses a combination of woodpulp and OCC to produce roughly 570 tpd of corrugating medium. Its box plants are located in Terre Haute and Ft. Wayne, Ind.; Cedarburg, Wis.; Chicago, Ill.; Lexington, Ky.; Kansas City, Mo.; Jonesboro, Ark.; Columbia, Tenn.; Jackson, and Tupelo, Miss.; and Montgomery, Ala. The Weston box plants will add to IP’ existing 23 box plants while bolstering its containerboard capacity, which includes five containerboard mills that focus on linerboard. (IP has one medium machine at Mansfield, La.)

• Visy Industries Inc. announced that it will buy Delta Container Corp., a New Orleans, La.-based sheet plant and box making facility that can produce about 12 million ft²/month. No purchase price was given. Delta, established in 1966 and employing 62 workers, represents the third acquisition in four months for Visy, making it the 14th sheet plant that Visy now has in the U.S.

Mail-Well buys label-making unit

Mail-Well Inc. has acquired the paper label division of Lawson Mardon Packaging Inc. The label division is the second-largest supplier of glue-applied labels in North America with a strategic focus on the beverage and food markets. Annual sales are approximately $80 million and the acquisition includes four manufacturing facilities, two in the U.S. and two in Canada.

Mail-Well has become a leading consolidator in the highly fragmented envelope printing industry, as well as high-end commercial printing and custom labels. The Englewood, Colo.-based company has been successful in quickly integrating acquired operations and improving operating efficiency through centralized purchasing and facilities consolidation. In December, Mail-Well announced plans to acquire Poser Business Forms Inc., a $90-million nationwide printer of custom labels, envelopes, and business forms for the distribution market. This followed the acquisition of Color Graphics Inc., the leading high-end commercial printer in Atlanta, Ga. Mail-Well now operates more than 70 printing plants and sales offices throughout the U.S. and Canada.

• Port Townsend Paper Corp. will buy bagmaking equipment from the Longview Fibre Co. converting facility in Spanish Fork, Utah. Port Townsend plans to expand its shopping bag production and the purchase gives it entrance into the handle sack business.

• Perkins Papers Ltd. agreed to sell its folding carton division, located in Lachute, Que., to Dopaco Inc. and Paperboard Industries Corp. for approximately $8 million. Perkins will continue to operate its tissue converting operations in Lachute. The folding carton operation will be moved into a new facility to be constructed in Lachute later this year.

• Field Container Co. has set up a new folding carton production facility in Mexico to supply cereal cartons to Kellogg Co. and other local customers. The company purchased a MAN Cartoman web offset carton printing line formerly used by Tetra-Pak in Canada.

K-C sale to Harmac Pacific terminated

Kimberly-Clark Corp. said the agreement to sell two Canadian pulp mills to Harmac Pacific Inc. for $470 million, plus $70 million in working capital, has been terminated. The transaction was contingent upon Harmac securing financing by Feb. 28. In the meantime, Harmac was taken over by Pope & Talbot Inc. in late January.

The mills are located in Terrace Bay, Ont., and Pictou County, N.S. The deal included related woodlands. The K-C chief executive said the company will reevaluate its options for the facilities.

• Skeena Cellulose Inc.’ restructuring has been completed. The Province of British Columbia, the Toronto Dominion Bank, and Skeena signed agreements Feb. 16 that completed the restructuring and removed Skeena from protection under the Companies’ Creditors Arrangement Act (CCAA).

• Great Lakes Pulp & Fibre has completed its reorganization to emerge from Chapter 11 bankruptcy proceedings “ substantial new equity capital and new debt facilities” and plans for existing senior management to stay on, the company said. The market deinked pulp mill company has been operating under Chapter 11 protection since November.

Potlatch pursues REIT for timberlands

Part of a renewed trend in the forest industry, Potlatch Corp. announced the formation of an estimated $1 billion real estate investment trust (REIT), the first U.S. publicly traded REIT based on timberland ownership. The Spokane, Wash.-based company is one of an expanding list of companies trying different methods to monetize perceived undervalued timberland holdings yet retain control of woodfiber resources.

The REIT will be known as Timberland Growth Corp. and will hold all 514,000 acres of Potlatch’ Arkansas timber acreage, as well as 324,000 acres of forests in Arkansas and Mississippi owned by hardwood lumber producer Anderson-Tully Co. (ATCO). The REIT will fund the purchase through a public offering. Based on timberland price estimates and stakes in the new company, Timberland Growth is likely valued at about $1 billion.

Abitibi finds buyer for supply businesses

Newsprint maker Abitibi-Consolidated sold the U.S. and Mexican assets of its office products division for about $110 million to United Stationers Supply Co. of Des Plaines, Ill. According to a definitive purchase agreement, United Stationers will purchase the Azerty U.S. and Azerty Mexico, AP Support Services, and Positive ID operations. The transaction was expected to be completed by the end of March. The net cash proceeds to Abitibi-Consolidated, after taxes and expenses, are estimated to be $100 million.

Abitibi-Consolidated announced plans to sell the office products assets in 1997 because they were not considered core assets of newsprint or uncoated groundwood papers. Abitibi-Consolidated still has two office products units (Axidata in Canada and Eurozerty in Europe) on the sale block.

1998 labor talks: no surprises ahead

Contract negotiations between U.S. pulp and paper mills and labor unions will involve a smaller pool of workers in 1998 when an estimated 13,313 union workers tackle the traditional bargaining issues: wages, health benefits, pension plans, and overtime policy. Both unions and companies expect quiet, reasoned talks that will center around worker efforts to hold onto existing wage and health terms, while companies push for employee concessions to improve competitiveness.

The American Forest & Paper Assn.’ annual bargaining calendar identifies 39 mills slated to renegotiate contracts (compared with 48 mills in 1997, which was considered one of the smallest pools in years), with the largest number of talks occurring in the southern region. Negotiations should be calm but labor observers say some mills could experience contentious bargaining. They suggest keeping close watch on negotiations at International Paper’ Moss Point, Mo., 235,000-tpy bleached paper mill where the contract for 824 workers expires Mar. 31; S.D. Warren Co.’ Muskegon, Mich., 255,000-tpy coated free-sheet mill, where the contract for 782 workers expires June 1; and Champion International Corp.’ Canton, N.C., 254,000-tpy uncoated free-sheet and 286,000-tpy bleached board mill, where the contract for 1,035 employees expires Aug. 31.

Wages remain the hot-button issue for most workers and although specific agenda terms have yet to be put in writing, pulp and paper workers will likely push for a wage increase of 3% to 3.5% in 1998, depending on the region. Companies argue that the ever-increasing competitiveness and the high cost of doing business in the U.S. make wage increases difficult.

The United Paperworkers International Union (UPIU) estimates that the average wage increase in 1997 was “ under 2.9%.” According to AF&ampPA’ summary of 1997 data, the national average for mill worker wage increases during the first year of a contract equaled 2.8%, with regional average pay increases in the first year as follows: New England, 2.5%; East, 3.3%; South, 2.8%; Midwest, 2.7%; and Pacific Coast, 2.6%. The hourly wage for pulp and paper workers is roughly $18.50, with the range beginning at $10 to $11/hr to more than $19/hr.

The trends toward early bargaining initiated by companies and the move toward longer contracts seems to be easing. Union officials said no company this year has yet initiated early bargaining. Contract duration has stabilized in recent years. Traditionally, contracts spanned a three-year period, but the average is now five to six years. In 1997, 15 mills negotiated five-year contracts and 15 other mills negotiated six-year contracts, while only two mills negotiated a one-year contract and seven mills agreed to three-year contracts, according to the AF&ampPA.

Unions and companies agree that longer contracts afford a certain degree of stability, although union workers tend to oppose contracts longer than six years. Last year, two mills agreed to seven-year pacts, a term virtually unheard of several years ago.

Regarding health plans and pension benefits, paperworkers seem to be on the defensive, trying to hold on to medical options other than HMOs or ensuring that their HMOs provide quality care. An increasing number of corporations are adding HMOs with an employee contribution to their benefit package proposals. With pensions, there have been company requests for paybacks or attempts to reduce contributions.

Job security is increasingly a negotiating issue as workers struggle to fight downsizing and the advent of the temporary workforce. UPIU maintains that part-time workers should be given benefits and it remains troubled by the degree of attrition in the pulp and paper industry. “” language in the face of increasing mergers and acquisitions is being written into new contracts.

Asian crisis delays some expansions

Paper manufacturers in Southeast Asia continued to wrestle with the impact of the credit crunch that has hit Korea, Indonesia, Thailand, and Malaysia. While confirmations remain scanty, various sources say some startups have been postponed while producers regroup.

Asia Pacific Resources International Holdings Ltd. (APRIL), the large Singapore-based company that is building huge machines in Indonesia, admitted in a recent news release that there have been some delays to projects in Indonesia and China. The new paper machine No. 1 at the Riaupaper subsidiary in Sumatra (300,000 mtpy of uncoated free-sheet) has experienced delays in startup due to “ in the acceptance of the letter of credit issued by Indonesian banks,” according to the release. Construction on APRIL’ 350,000 mtpy uncoated free-sheet mill in Changshu, China has also been delayed and management expects that financing required to complete the project—$250 million— be raised “ a capital markets transaction later this year.” APRIL has a second machine planned for the Riaupaper uncoated free-sheet mill for 1999. A company spokeswoman could only estimate delays of 6 to 12 months for the projects.

A Morgan Stanley report speculated that all of APRIL’ expansion projects will be postponed for “ least 12 months” and that the company is “ seeking a partner” to help to complete them, “ it may be forced to sell out entirely.”

In conversations with analysts following disclosure of its third-quarter (3Q) earnings, Asia Pulp & Paper Inc. (APP) said some of its major projects have been pushed back by one to two quarters. One of the coated-uncoated free-sheet machines slated for startup in 3Q-1998 at the Indah Kiat mill in Perawang, Indonesia, has been delayed until fourth quarter. A third machine, scheduled for 4Q-1999, is expected to start up in 1Q-2000. A coated-uncoated free-sheet machine due 3Q-1998 at the Tjiwi Kimia mill in Mojokerto, Indonesia, has been pushed back a quarter. The two coated-uncoated free-sheet machines for the Dagang Paper Mill in China will now start up in 4Q-1999 and 1Q-2000.

APP has 2.6 million mtpy of printing/ writing capacity slated to come online between now and 2000; in addition, a 865,000 mtpy bleached hardwood kraft mill is scheduled to start up in third-quarter 1999 in Borneo, Malaysia.

Taiwan to cut tariffs on paper products

Taiwan has agreed to eliminate all paper tariffs and most wood tariffs by 2002, as part of an agreement reached with the U.S. Trade Representative. The agreement was reached as part of Taiwan’ effort to join the World Trade Organization. Taiwan also formally agreed to support the Forest Products Initiative in the Asia Pacific Economic Cooperation forum (APEC).

“ believe the best way for our industry to compete internationally is to ensure that we have a level playing field in all markets,” said W. Henson Moore, president and CEO of the American Forest & Paper Assn. “’ commitment to work in support of the APEC Forest Products Initiative marks a substantial contribution to the region’ economic recovery.”

In remarks before the House Ways and Means Subcommittee on Trade, Moore urged other countries such as Japan and Korea to open their economies. He said “ tariffs, nontariff barriers, collusive business practices, and state trading” all contributed to the Asian financial crisis. “ can be no meaningful, sustainable recovery in the region unless and until these are rooted out.”

International tariffs on paper products have been a long-standing and contentious issue for AF&ampPA, one that was heightened last year when U.S. trade representatives traveled overseas to address two separate tariff issues involving the General Agreement on Tariffs and Trade (GATT) and the five-year bilateral paper trade pact between the U.S. and Japan. Regarding GATT, the U.S. and Canadian paper industries have pushed the European Union for an accelerated timetable to eliminate international tariffs in 1998, rather than 2004. Regarding tariffs in Japan, AF&ampPA wants to extend a pact designed to enhance U.S. access to Asian markets by capping product tariffs; Japan wants to abolish the pact completely because the nation says the market is sufficiently open to U.S. companies.

Mexico to levy import tax on U.S. producers

The Mexican government will begin charging tariffs on U.S. companies exporting cut-size bond paper following an investigation requested by a group of domestic paper producers, including Kimberly-Clark de Mexico. Mexico’ ministry of trade and industry said it would impose a tariff of 24.12% on imports from Georgia-Pacific Corp., Champion International Corp., and an unnamed group of other U.S. exporters. The ministry said it would levy a 16.47% tariff on Fort James Corp. and a 10.55% tariff on International Paper Co.

“ authority concluded that during the investigated period (January to June 1996) there was an increase in cut-size bond paper imports from the U.S. in absolute terms, derived from a drop in prices of the imports,” the ministry said. The provisional dumping tariffs, which the ministry described as preliminary, will be applied on top of existing tariffs established under the North American Free Trade Agreement. Cut-size bond paper is currently subject to an import tariff of 7%. According to Reuters, the ministry said it would continue studying U.S. paper import prices to determine if the named companies are continuing to dump paper in Mexico. Based on the results of the probe, the ministry said it could revise the tariffs at a later date.