Paper Capacity Base Cut After Two-Year Decrease
Association pares 40 mills and 104 machines from annual paper and paperboard survey.
By Staff -- graphic arts online, 3/1/2003
Following first-ever consecutive-year declines in U.S. paper and paperboard capacity levels and exercising new reporting rules, the American Forest & Paper Association (AF&PA) trimmed total 2002 capacity of 100.5 million tons by 2.5% from the projection of the prior year's survey.
In its 43rd annual capacity survey, released in mid-February, the group complied with new rules requiring that it remove immediately from capacity shuttered mills and shut machines where the owner's intention to close them permanently has been clearly stated in a public announcement.
As a result, AF&PA cut two years of capacity closures from the 2002 survey, accounting for 40 mills and 104 machines. Previously, the association continued to count closed-machine capacity for a full year unless the equipment was immediately dismantled.
Declines of paper and paperboard capacity of 1.9% in 2001 and 1.3% in 2002 reflected, the survey says, "the industry's efforts to adjust to stiff foreign competition and a period of cyclically weak paper and paperboard demand."
Total paper and paperboard capacity, which averaged 2.2% annual growth during part of the 1990s, is projected to drop by 0.5% this year, then rise by 0.8% in 2004 and 0.4% in 2005, says AF&PA.
Printing-writing paper capacity, which is now at 27.3 million tons, fell about 2.1 million tons in 2001 and 2002, according to the survey, reaching the lowest level for this segment since 1994. Here, capacity is expected to remain unchanged this year before climbing by 1.6% next year and 0.5% in 2005.
For four major categories by type and 2002 capacity tonnage, here is the change in capacity last year and the projection for this year:
Uncoated groundwood, 2.01 million tons: 10.3% gain in 2002, 5.4% gain in 2003.
Coated groundwood, 5.04 million tons: 2% gain in 2002, 3.6% decline in 2003.
Coated freesheet, 5.0 million tons: 7% decline in 2002, 2.4% decline in 2003.
Finally, uncoated free-sheet, from a peak of 15.2 million tons in 2000, fell in capacity to 13.6 million by last year, a drop of more than 1.6 million tons in just two years; capacity, it is projected, will increase to 14.0 million tons by 2004.
