Mergers changing face of forest industry
A survey shows B.C. is at the forefront of a process that is creating regionalized businesses
Gordon Hamilton
Vancouver Sun
http://www.canada.com/vancouversun/news/business/story.html?id=aefd1255-7539-4247-bcce-106e3a43945b
Thursday, April 26, 2007
Mergers and acquisitions -- some of the largest of which involve Canadian companies -- are tearing down the vertically integrated global forest industry and rebuilding it as regionalized, specialty businesses, according to a new PricewaterhouseCoopers survey.
And British Columbia is at the forefront of this industry-wide transformation, where financial players -- such as New York's Third Avenue Management and B.C. billionaire Jim Pattison -- are influencing the new direction, said PwC partner Craig Campbell, who contributed to the report.
"Ownership has very much changed. It's not only visible in the name changes on the front gate, but also back in the share registers," Campbell said in an interview Wednesday.
The PwC survey, titled Branching Out, identifies Montreal-based Domtar Inc.'s $3.3-billion US consolidation with American giant Weyerhaeuser's fine paper business as the second-largest deal in the world last year, and suggests that Weyerhaeuser is not finished hiving off assets.
Weyerhaeuser operates three sawmills in the B.C. Interior. Its Kamloops pulp mill became part of the new Domtar. The report says Weyerhaeuser is North America's largest remaining vertically integrated player and is coming under mounting pressure to restructure its remaining assets.
"They will be looking at all their assets. Canada and B.C. would be front and centre in terms of what they are evaluating," Campbell said.
West Fraser Timber Co.'s $325-million US purchase of International Paper's southern U.S. sawmills, and Cascade's $476-million acquisition from Domtar of a 50-per-cent stake in Norampac, are in the top 10 North American deals of 2006.
The largest deal was International Paper's $5-billion US sale last December of 1.6 million hectares of southern U.S. forestlands to institutional timberland investors. International Paper has led the transformation away from large, vertically integrated companies, and today is a product specialist, focused on packaging and uncoated fine papers. It has a global reach, branching out into China, Brazil and Russia.
The new emerging business model has separated forestlands from manufacturing, selling them to timber investment management organizations. Pulp and paper companies are being uncoupled from sawmills and other wood products businesses.
In B.C., Weyerhaeuser's former coastal assets have been uncoupled; the private timberlands going into privately-owned Island Timberlands. The sawmills and Crown tenures were merged with Western Forest Products. The driving force behind the restructuring on the Coast was Brookfield Asset Management and its Tricap Restructuring Fund.
In the Interior, Canfor Corp. uncoupled its pulp assets from the sawmills last July, creating Canfor Pulp Income fund, which trades separately.
"The root cause of this is under-performance across the industry and when you have an under-performing industry, you get these financial players having a look, scratching their heads and asking 'why is this industry chronically under-performing?'"
The trend for the financial players is to sell off non-core assets and focus on core assets, he said. The next step after uncoupling assets, is horizontal consolidation across the different stages of the value chain, a model International Paper has already adopted.
Monday, April 30, 2007
Paper Mill - Biofuels, wind, solar eyed as viable options for Wisconsin
Interest in renewable energy on the rise
Biofuels, wind, solar eyed as viable options for Wisconsin
By Pete Bach
Post-Crescent staff writer
Wisconsin appears to be all about cultivating renewable energy sources.
A look around the region finds a Neenah paper mill among the leaders in the developing field, while an ethanol production plant is going full tilt west of Oshkosh.
Now the prospect that a northern Wisconsin paper mill might become the first fossil fuel independent facility of its type in North America is another step closer to reality.
These projects represent a mounting effort to develop alternate energy sources as Wisconsin strives for greater independence from oil and natural gas to power homes and industrial plants.
Gov. Jim Doyle has made the exploration of renewable energy one of his missions.
In early April, he announced his "25 by 25" initiative — a venture with a goal of garnering 25 percent of Wisconsin's electricity and 25 percent of the state's transportation fuels from renewable sources by 2025.
"The fact is, if an oilfield in Iran has to compete against a farm field in Wisconsin, that's a very good thing for the environment, for our economy and for the world," he said in announcing the initiative.
Going green
Lending new impetus to the conservation measures is new legislation sponsored by state Sen. Robert Cowles, R-Green Bay, that will require state utilities to produce 10 percent of their energy from renewable sources by 2015.
Spokesmen for Milwaukee-based We Energies, which supplies electricity to most of Outagamie County and parts of Calumet, Waupaca and Winnebago counties, said the utility is looking at a range of alternatives to go with existing options.
"We're just on the front end for meeting the new requirements," said Pat Keily, program manager for We Energies' renewable energy programs. "So there will be a lot of things that we'll be looking at and exploring. They'll be conducive to the diversification of our mix. We'll be looking at wind and solar and biomass."
A couple of We programs deal with customer-owned solar power arrangements.
"Solar photovoltaic is more conducive to customer owned, customer sited" systems, Keily said. "We purchase all the output at 22½ cents per kilowatt hour. And we feed that back into our Energy for Tomorrow program."
The Neenah Paper mill in Neenah has long participated in that program, and as of last September was still in the state lead having purchased 10.9 million kilowatt hours of renewable energy.
Meantime, We Energy's Solar Electric Development Program has drawn more than passing interest from area firms.
"There's at least three large customers in the Fox Valley that are pursuing this," said Randy Sabel, We Energies' principal account manager. "Two of them have done studies already and cost analysis and know what their facilities would accommodate. They have an idea of what the payback is. Now it's a matter of getting corporate approval to move forward with it."
The companies, which he did not identify, can apply for sizeable grants to partially defray the tab of new large solar electric systems.
Bio fuels
Utica Energy, an ethanol plant near Oshkosh that derives its product from corn, is expanding its range of Renew fueling stations and hopes to have a dozen open by Memorial Day.
The stations will provide the E85 mixture that can be used by specially equipped vehicles as well as the popular 10 percent ethanol/gas blends that are widely available.
"We're in our fourth year and it's going really well," said Jay Stoflet, director of marketing. "We produce 56 million gallons of ethanol a year."
The partners have invested in another ethanol plant going up in Jefferson in southern Wisconsin that'll have a capacity of 130 million gallons per year.
Valley paper makers are keeping close tabs on a state-of-the-art biorefinery planned at Flambeau River Papers, a Park Falls mill that makes book paper.
The biorefinery, carrying a $213 million pricetag, would make the mill among the first industrial plants to co-produce pulp and ethanol from wood. Up to 20 million gallons of cellulosic ethanol annually would be produced from the spent pulping liquor.
Harnessing the wind
A major project to tap the wind off Lake Winnebago's southeast shore to generate electricity is about to move forward in earnest.
We Energies' Blue Sky Green Field wind project in the towns of Calumet and Marshfield in northeast Fond du Lac County will generate 145 megawatts of electricity, enough to power about 36,000 average homes. A total of 88 wind turbines will be installed.
The turbines, similar to the two that whirl along U.S. 41 south of Fond du Lac, are each capable of generating 1.65 megawatts.
Construction will get underway this summer and is expected to take a year to complete.
Reusing old mills
At the same time, the former Smart Papers mill — which reopened Aug. 9 under the new ownership of Butch Johnson of Hayward — is going full tilt making 400 tons daily of book paper.
Ben Thorp, a forest biorefinery expert that Johnson tapped to lead the planning, speaks with great confidence about the prospects despite a sharp disappointment. The project failed in its bid to land an $80 million grant from the Department of Energy.
"We were told we finished 9th of 44 and they only funded six," said Thorp. "We didn't get funded but we got very good feedback on the strengths and weaknesses of the proposal. We're continuing to do engineering work. We're setting out to fix each and every one of the weaknesses, and that in itself is going to take several months."
In addition to selling 400 tons of paper a day, Flambeau River makes 150 tons a day of hardwood pulp. And they're buying more than 100 tons a day of pulp. What the project is going to do is add 500 tons a day of pulp to the mix, Thorp said, with the mill using about half that production. In addition, the design will produce 440 tons a day of lignin and 20 million gallons of ethanol from wood a year for which markets are readily available.
"Our outputs are all spoken for, presold," Thorp said.
Right now the mill consumes 1.2 trillion BTUs of fossil fuel.
The project would add either a second bark boiler or so called biomass gasifier.
"And that will replace the 1.2 trillion BTUs of natural gas and coal that they now use," Thorp said. "It'll make Flambeau River the first integrated pulp and paper mill in North America that's fossil fuel free."
Project planners were able to identify equity partners or individuals willing to provide the $140 million balance.
"Not winning that government grant set us back, but now we're looking at continuing on and getting additional private funding going forward," Johnson said. "As we do that, we're running more pulp trials."
Exploring alternatives
Abandoned paper mill sites would seem to provide a logical place for launching new ventures that make the most of emerging technology. That's the case some places.
But not in Neenah, where the empty hulk of the huge Glatfelter paper mill dominates the downtown in wake of the firm's shut down last June. The city is eyeing a more aesthetic future for the site.
"We feel the highest and best use of that property is retail and commercial," said Mayor George Scherck.
Biofuels, wind, solar eyed as viable options for Wisconsin
By Pete Bach
Post-Crescent staff writer
Wisconsin appears to be all about cultivating renewable energy sources.
A look around the region finds a Neenah paper mill among the leaders in the developing field, while an ethanol production plant is going full tilt west of Oshkosh.
Now the prospect that a northern Wisconsin paper mill might become the first fossil fuel independent facility of its type in North America is another step closer to reality.
These projects represent a mounting effort to develop alternate energy sources as Wisconsin strives for greater independence from oil and natural gas to power homes and industrial plants.
Gov. Jim Doyle has made the exploration of renewable energy one of his missions.
In early April, he announced his "25 by 25" initiative — a venture with a goal of garnering 25 percent of Wisconsin's electricity and 25 percent of the state's transportation fuels from renewable sources by 2025.
"The fact is, if an oilfield in Iran has to compete against a farm field in Wisconsin, that's a very good thing for the environment, for our economy and for the world," he said in announcing the initiative.
Going green
Lending new impetus to the conservation measures is new legislation sponsored by state Sen. Robert Cowles, R-Green Bay, that will require state utilities to produce 10 percent of their energy from renewable sources by 2015.
Spokesmen for Milwaukee-based We Energies, which supplies electricity to most of Outagamie County and parts of Calumet, Waupaca and Winnebago counties, said the utility is looking at a range of alternatives to go with existing options.
"We're just on the front end for meeting the new requirements," said Pat Keily, program manager for We Energies' renewable energy programs. "So there will be a lot of things that we'll be looking at and exploring. They'll be conducive to the diversification of our mix. We'll be looking at wind and solar and biomass."
A couple of We programs deal with customer-owned solar power arrangements.
"Solar photovoltaic is more conducive to customer owned, customer sited" systems, Keily said. "We purchase all the output at 22½ cents per kilowatt hour. And we feed that back into our Energy for Tomorrow program."
The Neenah Paper mill in Neenah has long participated in that program, and as of last September was still in the state lead having purchased 10.9 million kilowatt hours of renewable energy.
Meantime, We Energy's Solar Electric Development Program has drawn more than passing interest from area firms.
"There's at least three large customers in the Fox Valley that are pursuing this," said Randy Sabel, We Energies' principal account manager. "Two of them have done studies already and cost analysis and know what their facilities would accommodate. They have an idea of what the payback is. Now it's a matter of getting corporate approval to move forward with it."
The companies, which he did not identify, can apply for sizeable grants to partially defray the tab of new large solar electric systems.
Bio fuels
Utica Energy, an ethanol plant near Oshkosh that derives its product from corn, is expanding its range of Renew fueling stations and hopes to have a dozen open by Memorial Day.
The stations will provide the E85 mixture that can be used by specially equipped vehicles as well as the popular 10 percent ethanol/gas blends that are widely available.
"We're in our fourth year and it's going really well," said Jay Stoflet, director of marketing. "We produce 56 million gallons of ethanol a year."
The partners have invested in another ethanol plant going up in Jefferson in southern Wisconsin that'll have a capacity of 130 million gallons per year.
Valley paper makers are keeping close tabs on a state-of-the-art biorefinery planned at Flambeau River Papers, a Park Falls mill that makes book paper.
The biorefinery, carrying a $213 million pricetag, would make the mill among the first industrial plants to co-produce pulp and ethanol from wood. Up to 20 million gallons of cellulosic ethanol annually would be produced from the spent pulping liquor.
Harnessing the wind
A major project to tap the wind off Lake Winnebago's southeast shore to generate electricity is about to move forward in earnest.
We Energies' Blue Sky Green Field wind project in the towns of Calumet and Marshfield in northeast Fond du Lac County will generate 145 megawatts of electricity, enough to power about 36,000 average homes. A total of 88 wind turbines will be installed.
The turbines, similar to the two that whirl along U.S. 41 south of Fond du Lac, are each capable of generating 1.65 megawatts.
Construction will get underway this summer and is expected to take a year to complete.
Reusing old mills
At the same time, the former Smart Papers mill — which reopened Aug. 9 under the new ownership of Butch Johnson of Hayward — is going full tilt making 400 tons daily of book paper.
Ben Thorp, a forest biorefinery expert that Johnson tapped to lead the planning, speaks with great confidence about the prospects despite a sharp disappointment. The project failed in its bid to land an $80 million grant from the Department of Energy.
"We were told we finished 9th of 44 and they only funded six," said Thorp. "We didn't get funded but we got very good feedback on the strengths and weaknesses of the proposal. We're continuing to do engineering work. We're setting out to fix each and every one of the weaknesses, and that in itself is going to take several months."
In addition to selling 400 tons of paper a day, Flambeau River makes 150 tons a day of hardwood pulp. And they're buying more than 100 tons a day of pulp. What the project is going to do is add 500 tons a day of pulp to the mix, Thorp said, with the mill using about half that production. In addition, the design will produce 440 tons a day of lignin and 20 million gallons of ethanol from wood a year for which markets are readily available.
"Our outputs are all spoken for, presold," Thorp said.
Right now the mill consumes 1.2 trillion BTUs of fossil fuel.
The project would add either a second bark boiler or so called biomass gasifier.
"And that will replace the 1.2 trillion BTUs of natural gas and coal that they now use," Thorp said. "It'll make Flambeau River the first integrated pulp and paper mill in North America that's fossil fuel free."
Project planners were able to identify equity partners or individuals willing to provide the $140 million balance.
"Not winning that government grant set us back, but now we're looking at continuing on and getting additional private funding going forward," Johnson said. "As we do that, we're running more pulp trials."
Exploring alternatives
Abandoned paper mill sites would seem to provide a logical place for launching new ventures that make the most of emerging technology. That's the case some places.
But not in Neenah, where the empty hulk of the huge Glatfelter paper mill dominates the downtown in wake of the firm's shut down last June. The city is eyeing a more aesthetic future for the site.
"We feel the highest and best use of that property is retail and commercial," said Mayor George Scherck.
Friday, April 27, 2007
Paper company Bowater Q1 loss widens as weak demand depresses pricing
Paper company Bowater Q1 loss widens as weak demand depresses pricing
Canadian Press
GREENVILLE, S.C. (AP) - Paper company Bowater Inc. said Thursday its first-quarter loss grew, missing Wall Street estimates by a wide margin, as weakness in newsprint demand and a seasonal slowdown in the coated paper market ate into profits.
Shares of Bowater, which will combine with Canadian rival Abitibi-Consolidated Inc. (TSX:A) in the third quarter, dropped over three per cent in morning trading on the New York Stock Exchange.
The company said its quarterly loss grew to US$35.4 million, or 62 cents per share, from a loss of $18.8 million, or 33 cents per share during the same period last year. Excluding several special items, such as a $35.9 million gain on an asset sale and a $12.3 million charge related to tax adjustments, the company said it lost $48.6 million, or 85 cents per share, in the latest quarter.
Analysts polled by Thomson Financial forecast a loss of 53 cents per share. Thomson estimates usually exclude special items.
Revenue declined 14 per cent to $771.6 million from $893.2 million during the same period a year ago. Analysts expected revenue of $828.5 million.
The company said its quarterly results reflect further weakness in newsprint demand and a seasonal slowdown in the coated paper market, as well as a sluggish lumber market, which caused pricing pressure.
"The deterioration in domestic newsprint demand underscores the strategic rationale for our proposed merger," chief executive officer David J. Paterson said Thursday in a news release. Paterson said the combined companies will have lower costs.
A rapid increase in the cost of recycled fibre and costs related to production cuts from weak demand and plant maintenance also weighed on results in the period.
"We have seen some improvement in the second quarter with better demand for several of our paper grades and softening in the cost of recycled fibre," Paterson said.
Bowater shares fell 25 cents to close at $23.73 on the New York Stock Exchange. Its 52-week trading range is $19.61 to $29.96.
Canadian Press
GREENVILLE, S.C. (AP) - Paper company Bowater Inc. said Thursday its first-quarter loss grew, missing Wall Street estimates by a wide margin, as weakness in newsprint demand and a seasonal slowdown in the coated paper market ate into profits.
Shares of Bowater, which will combine with Canadian rival Abitibi-Consolidated Inc. (TSX:A) in the third quarter, dropped over three per cent in morning trading on the New York Stock Exchange.
The company said its quarterly loss grew to US$35.4 million, or 62 cents per share, from a loss of $18.8 million, or 33 cents per share during the same period last year. Excluding several special items, such as a $35.9 million gain on an asset sale and a $12.3 million charge related to tax adjustments, the company said it lost $48.6 million, or 85 cents per share, in the latest quarter.
Analysts polled by Thomson Financial forecast a loss of 53 cents per share. Thomson estimates usually exclude special items.
Revenue declined 14 per cent to $771.6 million from $893.2 million during the same period a year ago. Analysts expected revenue of $828.5 million.
The company said its quarterly results reflect further weakness in newsprint demand and a seasonal slowdown in the coated paper market, as well as a sluggish lumber market, which caused pricing pressure.
"The deterioration in domestic newsprint demand underscores the strategic rationale for our proposed merger," chief executive officer David J. Paterson said Thursday in a news release. Paterson said the combined companies will have lower costs.
A rapid increase in the cost of recycled fibre and costs related to production cuts from weak demand and plant maintenance also weighed on results in the period.
"We have seen some improvement in the second quarter with better demand for several of our paper grades and softening in the cost of recycled fibre," Paterson said.
Bowater shares fell 25 cents to close at $23.73 on the New York Stock Exchange. Its 52-week trading range is $19.61 to $29.96.
Wednesday, April 11, 2007
Mills' energy costs rising
Mills' energy costs rising
By Scott Stafford,
Berkshire Eagle StaffBerkshire Eagle
Local paper manufacturers say increasing power prices result in benefit cuts and lower wages.
Tuesday, April 10NORTH ADAMS — Executives from several local paper-manufacturing firms in the Berkshires yesterday told a member of Gov. Deval L. Patrick's cabinet that a stiff increase in energy costs in January further hampered paper mills already facing stiff competition.
Secretary-designate of Labor and Workforce Development Suzanne M. Bump met at Massachusetts College of Liberal Arts yesterday with members of the Berkshire legislative delegation, economic development officials and other business leaders to discuss challenges faced by the local paper industry. The meeting was called in the wake of — and partly as a result of — news that the former Fox River Paper Co.'s Rising Mill in Housatonic is closing next month, leaving 137 workers jobless.
"Energy is one of the most alarming and concerning cost increases we've had to deal with, and it results in diluted benefits and more difficulty in recruiting workers," said Mike Standel, mill manager for Schweitzer-Mauduit International Inc., which operates a paper mill in Lee. "It also makes it difficult to stay viable in a very competitive marketplace."
Energy costs at the Lee mill have risen 171 percent since 1994, according to Roger G. Scheurer, environmental and manufacturing projects manager at Schweitzer-Mauduit.
This year alone, Standel said, the energy bill will rise roughly $770,000.
"When you add that much to the cost of doing business, it is a significant bump to overcome," he said. "It's quite staggering."
Scheurer said the mill — even though it is trimming costs, laying off workers and using every opportunity to conserve power — would lose "a couple of million dollars" this year.
Energy costs at the Lee plant were easily the highest in the company, he said.
The harrowing experience at Schweitzer-Mauduit was echoed by paper executives around the room.
One official said it also affects their ability to hire and retain workers.
"It is harder for us to keep skilled people at diminishing wages when they also have to pay higher energy costs at home, driving a need for higher wages," said John Schulte, a vice president at Crane & Co.
Contacted later by The Eagle, Edgar Alejandro, manager of economic and community development at Western Massachusetts Electric Co., said the January increase was the first in several years.
"It was a significant increase, but one that has been deferred for a long time," he said. "And as all of these companies have struggled, so has WMECO. With deregulation (of the electric utilities) came cost-cutting and layoffs."
Alejandro also noted that much of the increase is due to the cost of upgrading the electrical grid system throughout southern New England — upgrades that will eventually result in a more efficient infrastructure, more reliability and less dramatic cost increases. So for the short term, the cost of the upgrades will continue to be a factor in determining the price of electricity.
"Energy costs more in New England than in any other region of the country," Alejandro said. "Part of it is the insurmountable amount of environmental regulations."
At the same time, said state Rep. Daniel E. Bosley, D-North Adams, initiatives to encourage more renewable and regional sources of energy are gaining ground. In the long run, these will have the effect of providing cleaner energy from more local sources that would hopefully result in fewer and smaller price increases.
But for the short-term, several at the meeting yesterday agreed, the increasing price of energy will continue to be a factor for manufacturing facilities in New England and may necessitate more aggressive power conservation efforts or investment in technology that allows plants to generate their own power.
The cost of energy is also an important consideration for companies looking at relocating or expanding in the Berkshires, said Tyler Fairbank, president of the Berkshire Economic Development Corporation.
Bump explained that labor and energy issues were not factors that contributed to the closing of the Rising Mill. Officials from Neenah, the company that bought Fox River Paper, told her that the main concern was the antiquated equipment and the significant capital investment needed to upgrade the machinery. She noted that a number of different parties have expressed an interest in the Rising Mill for a variety of different uses, but nothing is likely to happen there soon.
After the meeting, Bosley told members of the press that while there may not be much that can be done to alleviate the short-term increases in energy, other opportunities to reduce the cost of doing business here will be explored.
By Scott Stafford,
Berkshire Eagle StaffBerkshire Eagle
Local paper manufacturers say increasing power prices result in benefit cuts and lower wages.
Tuesday, April 10NORTH ADAMS — Executives from several local paper-manufacturing firms in the Berkshires yesterday told a member of Gov. Deval L. Patrick's cabinet that a stiff increase in energy costs in January further hampered paper mills already facing stiff competition.
Secretary-designate of Labor and Workforce Development Suzanne M. Bump met at Massachusetts College of Liberal Arts yesterday with members of the Berkshire legislative delegation, economic development officials and other business leaders to discuss challenges faced by the local paper industry. The meeting was called in the wake of — and partly as a result of — news that the former Fox River Paper Co.'s Rising Mill in Housatonic is closing next month, leaving 137 workers jobless.
"Energy is one of the most alarming and concerning cost increases we've had to deal with, and it results in diluted benefits and more difficulty in recruiting workers," said Mike Standel, mill manager for Schweitzer-Mauduit International Inc., which operates a paper mill in Lee. "It also makes it difficult to stay viable in a very competitive marketplace."
Energy costs at the Lee mill have risen 171 percent since 1994, according to Roger G. Scheurer, environmental and manufacturing projects manager at Schweitzer-Mauduit.
This year alone, Standel said, the energy bill will rise roughly $770,000.
"When you add that much to the cost of doing business, it is a significant bump to overcome," he said. "It's quite staggering."
Scheurer said the mill — even though it is trimming costs, laying off workers and using every opportunity to conserve power — would lose "a couple of million dollars" this year.
Energy costs at the Lee plant were easily the highest in the company, he said.
The harrowing experience at Schweitzer-Mauduit was echoed by paper executives around the room.
One official said it also affects their ability to hire and retain workers.
"It is harder for us to keep skilled people at diminishing wages when they also have to pay higher energy costs at home, driving a need for higher wages," said John Schulte, a vice president at Crane & Co.
Contacted later by The Eagle, Edgar Alejandro, manager of economic and community development at Western Massachusetts Electric Co., said the January increase was the first in several years.
"It was a significant increase, but one that has been deferred for a long time," he said. "And as all of these companies have struggled, so has WMECO. With deregulation (of the electric utilities) came cost-cutting and layoffs."
Alejandro also noted that much of the increase is due to the cost of upgrading the electrical grid system throughout southern New England — upgrades that will eventually result in a more efficient infrastructure, more reliability and less dramatic cost increases. So for the short term, the cost of the upgrades will continue to be a factor in determining the price of electricity.
"Energy costs more in New England than in any other region of the country," Alejandro said. "Part of it is the insurmountable amount of environmental regulations."
At the same time, said state Rep. Daniel E. Bosley, D-North Adams, initiatives to encourage more renewable and regional sources of energy are gaining ground. In the long run, these will have the effect of providing cleaner energy from more local sources that would hopefully result in fewer and smaller price increases.
But for the short-term, several at the meeting yesterday agreed, the increasing price of energy will continue to be a factor for manufacturing facilities in New England and may necessitate more aggressive power conservation efforts or investment in technology that allows plants to generate their own power.
The cost of energy is also an important consideration for companies looking at relocating or expanding in the Berkshires, said Tyler Fairbank, president of the Berkshire Economic Development Corporation.
Bump explained that labor and energy issues were not factors that contributed to the closing of the Rising Mill. Officials from Neenah, the company that bought Fox River Paper, told her that the main concern was the antiquated equipment and the significant capital investment needed to upgrade the machinery. She noted that a number of different parties have expressed an interest in the Rising Mill for a variety of different uses, but nothing is likely to happen there soon.
After the meeting, Bosley told members of the press that while there may not be much that can be done to alleviate the short-term increases in energy, other opportunities to reduce the cost of doing business here will be explored.
Tuesday, April 10, 2007
Trade rift could hurt U.S. imports
Trade rift could hurt U.S. imports
By Kristopher Hanson, Staff writer
http://www.presstelegram.com/business/ci_5623446
LONG BEACH - A growing U.S.-China trade rift over coated paper exports to America has direct implications for Southern California seaports, where much of the paper is shipped.
Exporters of Chinese coated paper, accused by U.S. manufacturers of receiving unfair subsidies in their homeland, are now facing significant duties on exports to the United States following a March 30 ruling by the Department of Commerce.
The decision, which affects the rapidly increasing volumes of coated free sheet paper moving through the ports of Long Beach-Los Angeles, comes in the wake of an anti-dumping investigation by the Commerce Department.
The investigation found that Chinese paper producers were receiving unfair government subsidies averaging 18.16 percent, artificially pushing down prices on the world market and undercutting American manufacturers.
Commerce officials, who are also looking into Indonesian and Korean paper producers, will issue their final ruling later this year.
"The China of today is not the China of years ago," said Commerce Secretary Carlos Gutierrez, who visited the Port of Long Beach in January to discuss U.S. efforts to level the trade imbalance with China. "Just as China
has evolved, so has the range of our tools to make sure Americans are treated fairly."
At the Port of Los Angeles, for example, volumes of coated paper imports, much of it from China and a few smaller Asian nations, have jumped 317 percent since 2002. Nationally, Chinese coated paper imports were up more than 800 percent between 2004 and 2006, according to Jennifer Scoggins at the U.S. International Trade Commission in Washington, D.C.
At the Port of Long Beach, the value of coated paper imports from China grew to $19 million in 2005, from $6 million in 2004. Numbers for 2006 were not available.
Coated paper is used to print yearbooks, annual reports, magazines, glossy newsletters, wall calendars and catalogs, among other publications.
In October, U.S. paper producer NewPage Corporation of Ohio filed an inquiry with the Commerce Department seeking to apply anti-subsidy laws to China, which had previously been exempt from such duties because of its status as a "non-market" economy, Scoggins said.
If upheld by the Commerce Department, the ruling requires U.S. Customs officials to collect an undetermined cash deposit or bond on coated free paper imports beginning as early as June.
The announcement comes amid increasing U.S. scrutiny of China's rapidly growing, export-dependent economy, which some believe is being unfairly fueled through an artificially deflated currency and generous government subsidies.
It's unclear how the potential tariffs will affect paper trade through the Long Beach-Los Angeles port complex, the nation's largest and the chief U.S. destination for Asian exports.
Authorities at both ports said that while such imports have been growing rapidly in recent years, they still represent a small fraction of total throughput.
The Port of LA imported more than 400,000 metric tons of coated paper from several countries in 2006, which equals a 317 percent increase from 2002, said Port of Los Angeles spokeswoman Theresa Adams-Lopez.
By Kristopher Hanson, Staff writer
http://www.presstelegram.com/business/ci_5623446
LONG BEACH - A growing U.S.-China trade rift over coated paper exports to America has direct implications for Southern California seaports, where much of the paper is shipped.
Exporters of Chinese coated paper, accused by U.S. manufacturers of receiving unfair subsidies in their homeland, are now facing significant duties on exports to the United States following a March 30 ruling by the Department of Commerce.
The decision, which affects the rapidly increasing volumes of coated free sheet paper moving through the ports of Long Beach-Los Angeles, comes in the wake of an anti-dumping investigation by the Commerce Department.
The investigation found that Chinese paper producers were receiving unfair government subsidies averaging 18.16 percent, artificially pushing down prices on the world market and undercutting American manufacturers.
Commerce officials, who are also looking into Indonesian and Korean paper producers, will issue their final ruling later this year.
"The China of today is not the China of years ago," said Commerce Secretary Carlos Gutierrez, who visited the Port of Long Beach in January to discuss U.S. efforts to level the trade imbalance with China. "Just as China
has evolved, so has the range of our tools to make sure Americans are treated fairly."
At the Port of Los Angeles, for example, volumes of coated paper imports, much of it from China and a few smaller Asian nations, have jumped 317 percent since 2002. Nationally, Chinese coated paper imports were up more than 800 percent between 2004 and 2006, according to Jennifer Scoggins at the U.S. International Trade Commission in Washington, D.C.
At the Port of Long Beach, the value of coated paper imports from China grew to $19 million in 2005, from $6 million in 2004. Numbers for 2006 were not available.
Coated paper is used to print yearbooks, annual reports, magazines, glossy newsletters, wall calendars and catalogs, among other publications.
In October, U.S. paper producer NewPage Corporation of Ohio filed an inquiry with the Commerce Department seeking to apply anti-subsidy laws to China, which had previously been exempt from such duties because of its status as a "non-market" economy, Scoggins said.
If upheld by the Commerce Department, the ruling requires U.S. Customs officials to collect an undetermined cash deposit or bond on coated free paper imports beginning as early as June.
The announcement comes amid increasing U.S. scrutiny of China's rapidly growing, export-dependent economy, which some believe is being unfairly fueled through an artificially deflated currency and generous government subsidies.
It's unclear how the potential tariffs will affect paper trade through the Long Beach-Los Angeles port complex, the nation's largest and the chief U.S. destination for Asian exports.
Authorities at both ports said that while such imports have been growing rapidly in recent years, they still represent a small fraction of total throughput.
The Port of LA imported more than 400,000 metric tons of coated paper from several countries in 2006, which equals a 317 percent increase from 2002, said Port of Los Angeles spokeswoman Theresa Adams-Lopez.
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