New Page Closing WI Paper Mill

The top producer of coated freesheet paper in North America, New Page Corp., announced July 30 it will permanently close its Kimberly, WI-based mill at the end of August. The mill annually produces 500,000 tons of coated freesheet paper and employs about 475 workers.

Dan Walsh, vice president of catalog/publication papers at distributor Bradner Smith & Co., says New Page’s announcement to permanently close the Kimberly, WI-based mill “will take a lot of tonnage out of the market. This is further evidence that New Page is serious about not flooding the already weak paper market with tonnage and further erode pricing.”

To further illustrate the unstable paper market, consider the following recent second-quarter financial results: Cascades reported a $25 million net loss, after net income of $45 million last year; New Page reported a net loss of $21 million after breaking even in the same period of 2007; AbitibiBowater reported a net loss of $251 million after a $248 million net loss in 2007; Verso Paper reported a net loss of $44.7 million; and Tembec reported a net loss of $27 million, an improvement on last year’s net loss of $164 million.

What’s more, Sappi Fine Paper North America announced a price increase of $3 per hundredweight (cwt), effective on all new orders placed on or after Aug. 13, and all existing orders with confirmed delivery dates on or after Sept. 29.

Dave Goldschmidt, vice president of marketing, catalog division for paper brokerage Strategic Paper Group, says several other major mills have announced machine downtime to curtail production in an attempt to maintain pricing levels.

“Despite the five, now potentially six straight quarters of mill announced increases, the paper mills continue to lose money,” he says. “The high energy and raw material costs continued to eat away any potential profits they had hoped to achieve.”

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