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AF&PA Surveys U.S. Paper Capacity

Magazine article Editor & Publisher

AF&PA Surveys U.S. Paper Capacity

Article excerpt

As Richard Storat reported the U.S. papermaking industry's turn-around in 1994, he was reminded of its origins. With transaction prices rising fast for suppliers of newspapers' principal raw material, history may soon repeat itself.

And the industry that started 300 years ago by recycling rags and has rallied recently from a severe slump, may have another rags to riches story to tell.

According to Storat, vice president for economics and materials at the American Forest and Paper Association (AF&PA), planned consumption of recovered paper through 1997 will grow at a 5.8% annual rate, five times faster than the growth of wood pulp demand and more than double the expected growth rate for total fiber consumption.

Recovered paper's share of total fiber consumption will reach 35.9% by 1997, according to Storat. For most major paper and paperboard grades, recovered paper consumption will rise at a rate faster than underlying capacity - three times as fast for the industry as a whole.

Compared with 1993, he said, use of recovered paper at full capacity in 1997 will have grown by more than 25%.

The AF&PA's annual survey shows an industry that plans to add 7.6 million tons of production capacity from 1994 through 1997 - a figure almost matched by the 7.2 million tons in expected growth in its ability to use recovered paper during the same four years.

This growth will cut into wood-pulp manufacturing capacity, which "will rise by an average of only 0.3%" through 1997, largely because of "the substitution of recovered paper pulp for wood pulp as a source of fiber," said Storat.

But while the industry in general will continue to increase paper and paperboard capacity (albeit at a modest 2% rate), the only planned expansion for newsprint is in recycled product. Overall newsprint capacity, said Storat, "will remain essentially unchanged," at 7.3 million tons.

For the period 1993-97, use of recovered paper to make newsprint grow by 22%, while newsprint capacity will remain unchanged " he said.

Capacity trends charted by the AF&PA for 1994-1997 show an average annual 0.1% decrease for newsprint, the only category in decline (40,000 short tons over the four years). In contrast, annual average newsprint capacity growth matched that for total paper and paperboard capacity, 2.4%, during the preceding 10 years.

Storat pointed out that owing to Stone Container Corp.'s late announcement, the survey does not include that company's Snowflake, Ariz., recycling operation, which will not contribute to newsprint capacity figures until 1996 or 1997 (when it is to produce 505 tons per day of 100% recycled-fiber newsprint).

"Consumption of old news is really not a problem," said AF&PA paper group vice president Virgil Horton. Companies are investing in boosting the percentage of recycled product, not the total volume, he said.

What is still required, according to Horton, is good source separation and the availability of enough recovered paper for the various grades.

(New Jersey was singled out for having what was described as probably one of the largest statewide newspaper recovery rates - approximately 70% - owing to legislation.)

Including exports and nonpaper recycling applications, said Storat, the total amount of U. …

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