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North American spending down 12%. Capital spending should decrease 11.5% in fiscal 2001, compared to actual fiscal 2000 spending, based on estimates by 41 North American pulp and paper companies. Combined spending for 30 U.S. and 14 Canadian companies is estimated to decrease $1.19 billion to total $9.14 billion in fiscal 2001, dropping back to 1999 spending levels.
Spending for fiscal 2000 increased 12.9%, or $1.18 billion, compared to 1999, totaling $10.33 billion. This follows the projected spending increase of 12.6% that was tabulated in last year's spending survey. Although many companies have restrained spending in recent years, the Phase 1 Cluster Rule compliance deadline of April 2001 and regulations on nitrogen oxide (NOx) emissions accounted for much of the increased spending in fiscal 2000. Environmental projects to comply with the Cluster Rule and other federal regulations replaced the high-cost, capacity-adding projects of the past.
Seventeen companies exceeded their spending estimates for fiscal 2000, with Kimberly-Clark Corp. (K-C) at the top of the list, spending $260 million more than its $500 million projection. Other companies that underestimated their 2000 spending included Georgia-Pacific Corp. (G-P), Smurfit-Stone Container Corp., and International Paper Co. (IP), which exceeded their projections by $156 million, $126 million and $102 million, respectively.
In Canada, Abitibi-Consolidated Inc. topped the list, exceeding its spending budget by C$202 million. Spending comparisons were made between company projections and actual spending, excluding known expenditures by recently acquired subsidiaries.
North American spending peaked most recently in 1996 at $12.8 billion before declining sharply in the next two years, hitting an $8.4 billion low in 1998 for the period 1997-2000. Spending by the surveyed companies then took an upward turn in 1999 and 2000. However, it should be noted that in 1998, spending for Procter & Gamble Co.'s paper business segment was not available because it changed how it reported financial data. Considering the company spent an average $1.1 billion in its paper business segment during 1997, 1999, and 2000, the missing data is significant and may have indicated a more gradual spending decline than the 21.4% drop tabulated for 1998.
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VIEW TABLES
TABLE 1. U.S. and Canada imports/exports for selected grades of paper and paperboard (000 tons)
TABLE 2. U.S. permanent machine shutdowns
TABLE 3. U.S. market pulp pricing
TABLE 4. U.S. paper and paperboard production (000 tons)
TABLE 5. Canadian paper and paperboard production (000 tons)
MID-YEAR OUTLOOK BY INDUSTRY:
Pulp | Papers | Newsprint | Containerboard | Capital Spending
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