Saturday, January 23, 2010

A 'Salmon Week' For North American Papermakers

Pity the Pacific salmon: It expends all its energy swimming upstream, then gets screwed and dies.

Several North American papermakers know the feeling, as evidenced by several events this past week:
  • Rick Willett announced his resignation as CEO of the continent’s largest maker of magazine paper, NewPage, saying, “After considerable personal reflection on my longer term career interests, I have made the difficult decision to leave NewPage to pursue opportunities in other industries." My guesses as to what he might have left unsaid:
  1. “Other industries – yeah, like ones where you can actually make a profit.”
  2. “When the (black) liquor runs out, it’s time to leave the party.”
  3.  “Angry customers, lots of half-idle machines, and a mountain of high-interest debt: My work here is done!”
  4.  “It’s time to move on to another chapter in my career, and I don’t want it to be Chapter 11.”
  • AbitibiBowater had to idle its Fort Frances pulp and paper mill because cold weather caused the effluent-treatment system to fail. You mean it gets cold in Ontario?

  • Nearly 400,000 gallons of black liquor stored at Tembec’s closed pulp mill in Marathon, Ontario keeps leaking before it can be transfered to, of all places, the Fort Frances mill. Some has apparently made it into Lake Superior. Silly Canadians! Why can’t they act like Americans and get big tax breaks for their pulp byproducts?

  • Speaking of Tembec, the owner of its former mill in St. Francisville, LA, filed for Chapter 11 only 5 months after restarting the shuttered operation to make paperboard and paper bags. Question for the investors in Renew Paper: Tembec concluded 3 years ago that the mill was a dog. Did you bother to check it for fleas before you sinking millions into buying and fixing it up?

  • Catalyst Paper had a bad-news hat trick this week – a bankruptcy-court lawsuit asking it to return millions of dollars paid to it by Quebecor World, closure of its recycled-pulp operation in British Columbia, and permanent idling of its BC newsprint and directory mill. The Quebecor World bankruptcy trustee is also seeking another $18.5 million from UPM and smaller amounts from more than a thousand other vendors.

  • And for those counting on a rebound in magazine advertising to lift the paper business, consider this: The latest issue of Newsweek, which is placing a multimillion-dollar bet on upgraded paper, is only 52 pages, including the cover story by President Obama. Chief rival Time has only 56.
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