Coated paper was invented in the United States, but after a major industry shakeup today most of the country's ability to make coated paper is owned by foreign companies.
This morning, two momentous events occurred nearly simultaneously in the industry that makes coated paper for catalogs, magazines, inserts, and brochures:
1) NewPage, the largest North American maker of coated paper, sold its Biron, Wisconsin and Rumford, Maine mills to Catalyst Paper, which shifted about 12% of the nation's coated-paper capacity into Canadian hands.
2) The purchase of NewPage by Verso, the continent's #2 maker of coated paper, was completed a year and a day after it was first proposed. The U.S Justice Department, fearing a combined Verso-NewPage would have too large a market share, required the sale of the two NewPage mills for the takeover to be approved.
This past summer, four U.S.-owned companies -- NewPage, Verso, Appleton, and FutureMark -- operated U.S. mills able to make about 4.8 million tons per year of the glossy paper. That was 65% of the country's coated capacity. The rest was in the hands of companies based in South Africa (SAPPI), Canada (Resolute and West Linn), Finland (UPM), and New Zealand (Evergreen).
Since then, FutureMark went out of business, Verso closed its Bucksport, Maine mill, and NewPage sold the two mills to Catalyst. That leaves two U.S. companies -- Verso and Appleton -- with coated capacity of 3.4 million tons, just under half of the country's total. The new Verso, though, is by far the largest manufacturer of coated paper in the U.S., with more than double the U.S. capacity of #2 SAPPI.
On Jan. 3, 2014, the stock price of Verso, which was seemingly on the verge of bankruptcy, was only 65 cents per share. It closed today at $3.37, an increase of 418% in barely a year.
Wisconsin-based Consolidated Paper invented coated paper in 1935, revolutionizing both the paper and magazine industries. But in recent decades, the innovations have come mostly from Western Europe and the investments have been concentrated in Asia. Even the tiny Canadian industry has out-innovated the U.S. companies, with the forerunner of Catalyst pioneering an efficient process of coating and calendering paper and Kruger building the newest machine.
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Not surprising. Having worked for a period for one of the largest US coated paper companies, the atmosphere in the company was always about surviving not thriving. Innovative thinking just wasn't in the leaderships vocabulary.
ReplyDeleteA lot of things have been invented but actually not glossy coated paper. This was invented in Germany in 1892 by Scheufelen. SORRY!
ReplyDeleteFIPS: I suppose saying Consolidated invented coated paper is like saying Gutenberg invented printing. The Milwaukee Journal-Sentinel article to which my article links puts it this way: Consolidated "patented a process to mass produce coated paper, which immediately revolutionized publishing." So Consolidated may not have invented coated paper but it did invent a viable way of mass producing it, just as Gutenberg didn't invent printing but did figure out how to turn it into a revolutionary technology.
ReplyDeleteNow . . . the big question is how well will Verso Corporation manage this enterprise that's under their control?
ReplyDeleteMany states, towns, employees, and families are hoping for the very best!
Good luck Verso Corporation!! Let's work together to find the future for coated papers.
Verso is terribly leveraged in debt....my guess bankruptcy in 2 years.....good luck to the employees, but the NewPage merge just bought you time.
ReplyDeleteIn listing the remaining American-owned producers of coated papers, you neglected to include West Linn Paper Co., West Linn, OR - produces >290,000 tons/year coated free sheet.
ReplyDeleteAppleton Coated Paper Co. started producing glossy coated paper in Appleton, WI - this is the company today known as Appvion.
Brush and Mayer rod coaters were used until the invention of the transfer roll coater by Peter Massey at Consolidated Water Power & Paper Co. in the 1930s; see US Patent 1,921,369.
Appleton Coated Paper LLC, Combined Locks, WI was sold on 12/19/14 by Arjo Wiggins to a management group - continuing to make coated free sheet.
FutureMark was sold at bankruptcy auction last week to a group the plans to make recycled corrugating medium.
To Charles Klass: West Linn may technically be a U.S.-based company, but all indications are that it is Canadian owned. Of course, for all I know, the majority of Resolute or Catalyst stock may be in American hands.
ReplyDelete