Harold M. Cody is Editorial Director of Pulp & Paper magazine

INDUSTRY STATUS REPORT

P&P's mid-year review updates readers on the current market for key pulp and paper grades, and gazes into the future to assess market trends expected for second-half 1999 and into 2000.

PIGMENTS/ADDITIVES

New developments in coating and filler pigments and binders are reviewed, focusing on how these products are providing paper and board mills with new options for value-added paper and board grade manufacturing.

 

EXPANSION STORIES

Key mill projects covered in upcoming issues include on-line soft-nip calendering for uncoated mechanical grades, and new tissue machine start-ups in Canada and the U.S.

 

Are we having fun yet?

Are you as sick and tired as I am of hearing, thinking, and talking about how dreary it is working in the paper industry? Prices are down. Billions of dollars in shareholder equity have been destroyed. Next year will be better (I've said that for three years now at the CPPA meeting in Montreal). The list of complaints goes on and on.

The dreary state of the industry hadn't really hit me until one day recently when I realized I would have second thoughts about urging my kids to consider a career in this crazy industry. I grew up in the industry. It pays my bills and takes up most of my waking moments. I still sit around and tear up paper napkins, boxes, anything, just to look at the fiber, coating, and ply structure, or just to see how it's all put together. People in California think I'm weird.

BETTER OVER THERE? I recently had some positive conversations about the industry. It was almost strange since it was so unusual. The buzz from people who had just returned from the 11th SPCI World Pulp and Paper Week in Stockholm in early June was actually good! It was fun talking to them. This event, the world's largest pulp and paper conference and exhibit, was a big success. My boss summed it up best: "It was nice to go to a show where the general atmosphere was upbeat, and where you could actually find a mill person." Apparently mill staff still exist, and in Europe at least, still have travel budgets!

In contrast, typical conversations in North America center on such dialogue as "Is your business as bad as mine?" or "I sure hope next year is better than this one." Then there are the even more popular mumbles of something like, "well… it could be better." No kidding. In a recent example here in North America, a product manager for a major chemical company and I were discussing a conference, our business, and the general state of "being in the paper industry." Instead of the usual comments about how business was fine–i.e., we lie to each other–we both mentioned how tough things were. It was hard meeting budgets, it was difficult getting mill people out for anything, and sometimes we wondered why we continue to cling to this depressing industry. He looked at me and said, "you know, it's really good to hear we're not the only ones feeling this way."

Well, getting back to SPCI, we were talking at the office about how different it was to feel that an event was "alive." Looking down the aisles we saw lots and lots of people–18,248 attendees to be exact. The 1,122 suppliers from 27 countries were happy to see them. It sure beats contemplating the fact that bowling would be the best use of trade show isles at some U.S. shows.

HOPEFULLY, THINGS WILL GET BETTER. Now this gets me back to North America, and I don't really want to speculate on why it seems things are so much better in Europe. That's hard to pin down exactly. Things in Europe are better in some ways, e.g., investments are certainly running stronger, but hopefully, the industry-at-large is on an upswing now from the dreary climate of the last two years. Good news on improvements in some markets, such as board and pulp, has finally lent some upward momentum to paper stocks, as investors swing a bit into "cyclicals." Pricing appears to be on the upswing, notably in board and pulp, although gains will vary widely and in some cases won't be much. It's scary to think that this might be temporary.

Nevertheless, things look up for now and are hopefully going forward. Next year Pulp & Paper is sponsoring a major exhibit and technical program, Planet Pulp & Paper. It's designed to deliver practical information on mill operations and new technology to mill people. Like SPCI this year, I want to come back from it thinking that the pulp and paper industry is a fun, interesting, and challenging place to work.

Nevertheless, sometimes these days I think back and ask myself: "Self, why in the world did you switch your major from electrical engineering to paper science?" The answer usually is, "It sure wasn't for the stock options."

The industry has taken some tough steps to stop the bleeding, particularly here in North America. It has shut down old mills, limited investments in new capacity, cut staffing, and trimmed expenses to the bone. All of these should, and must help the industry post acceptable financial returns going forward. And help to reenergize the industry's thousands of talented engineers, scientists, and managers who love the business of turning fiber into products for everyday life.

For the sake of our own sanity, we really need a good year or ten. That way I can feel good about showing my five-year-old how to tell the plies apart in a cereal box.