Paper360 - January/February 2010 - (Page 6)

SETPOINT TRENDSPOT TING Looking BACK, PLANNING ahead EDITORIAL STAFF CHRIS HODGES | PUBLISHER chodges@naylor.com GLENN OSTLE | EDITORIAL DIRECTOR/ASSOCIATE PUBLISHER gostle@tappi.org MICHAEL SENECAL | MANAGING EDITOR msenecal@naylor.com KEN PATRICK | SENIOR EDITOR kpatrick@tappi.org RAMESH GUPTA | INTERNATIONAL EDITOR bsc_rcg@hotmail.com MARIA LUISA VALENCIA | INTERNATIONAL EDITOR mlvalencia@une.net.co ERIC FLETTY | VP OPERATIONS, TAPPI efletty@tappi.org SALES PROJECT MANAGER | RAY GOODWIN rgoodwin@naylor.com MARKETING | HOLLY STRAUT hstraut@naylor.com INTEGRATED MEDIA DIRECTOR | SHANE HOLT sholt@naylor.com SALES ASSOCIATES Shaun Greyling, Mike Hisey, Niki O’Brien, John O’Neil, Albert Quintero, Jason Ruppert, Vicki Sherman PREPRESS DESIGN | Cal Harding, Gord Klassen ADVERTISING ART | Elaine Connell REPRINTS www.naylor.com/clientSupport-articleReprint.asp I don’t like wishing away years, but frankly I’m relieved to see the back of 2009. The question now is whether 2010 will be better. If you listen to the naysayers, the news is still all bad for North America: a continued weak economy, increased global competition and declining demand, volatile energy prices, a narrowing talent pool, pending cap-and-trade regulations, uneven playing fields, and government stimulus programs clouding true market demand and making capital spending planning difficult. But there are some positive signs. According to Dr. Carl Steidtmann, Chief Economist at Deloitte Research, “While far from the picture of health, the U.S. economy has shown impressive signs of healing over the past three months. As the billions in monetary and fiscal stimulus slowly work their way into the economy, continued improvement can be expected.” Taking a page from The Late Show, my top ten reasons for why we might be optimistic about the North American paper industry in 2010 and beyond are: 10. The recession forced companies to make money the old fashioned way—through real productivity gains, according to William Hauserman of Applications Solutions Group. The Bureau of Labor Statistics’ preliminary report for 3Q09 reported a near 10% increase in productivity in the U.S. for the non-farm business sector, while labor costs fell 5%. Real manufacturing productivity grew 13% as output increased 8%, despite a 5% decrease in hours worked. 9. No matter how you feel about them, the Alternative Fuel Tax credit in the U.S., and Canada’s countering Green Transformation Program, pumped billions of dollars into a few corporations and helped them pay down some debt and end the year on an improved financial note. 8. There have been some impressive start ups in North America this year including tissue machines at SCA and Cellynne, and Pratt’s new light weight containerboard mill in Shreveport, LA, and some major suppliers saw an uptick in orders in the second half. 7. The biorefinery concept continues to move forward—despite disagreement about how best to accomplish and supply it—which has the potential to open up significant opportunities for pulp mills. 6. North America is beginning to seriously look at global pelletized biomass markets as a major new source of revenues, which could materialize later this year. 5. By shedding older, smaller, outdated production capacity during the past decade, the remaining capacity in North America overall is newer, larger, and considerably more efficient and profitable. 4. With 500-plus machines idled/shut down in the past decade and some 34 million tons of capacity lost or on hold, operating rates could accelerate in 2010 and beyond if demand/pricing steadily improves over the next few years. 3. After two decades of devastating decline, capital spending is likely to increase as operating rates improve and companies begin restoring an aging infrastructure, and investing in new technology. 2. Overall, companies are on much firmer ground coming out of the recession than going in, including those that successfully restructured through bankruptcy. 1. Based on an admittedly unscientific study conducted during interviews and at conferences in 2009, people just seem to be feeling more positive about their future prospects. GLENN OSTLE gostle @tappi.org Paper360º January/February 2010 http://www.naylor.com/clientSupport-articleReprint.asp

Table of Contents for the Digital Edition of Paper360 - January/February 2010

Paper360 - January/February 2010
Contents
Setpoint
Over the Wire
Outlook: North America 2010
Confronting the Carbon Challenge
Improve Your Energy Efficiency
Feature: Paper Machine Clothing
Around the Industry
TAPPI JOURNAL Summaries
Association News
Improving Print Performance
Tracking Tension
Dateline: London
Index of Advertisers

Paper360 - January/February 2010

http://www.nxtbook.com/naylor/PPIS/PPIS0413
http://www.nxtbook.com/naylor/PPIS/PPID0012
http://www.nxtbook.com/naylor/PPIS/PPIS0313
http://www.nxtbook.com/naylor/PPIS/PPIS0213
http://www.nxtbook.com/nxtbooks/naylor/PPIS0712
http://www.nxtbook.com/nxtbooks/naylor/PPIS0612
http://www.nxtbook.com/nxtbooks/naylor/PPIS0512
http://www.nxtbook.com/nxtbooks/naylor/PPIS0412
http://www.nxtbook.com/nxtbooks/naylor/PPIS0312
http://www.nxtbook.com/nxtbooks/naylor/PPIS0212
http://www.nxtbook.com/nxtbooks/naylor/PPIS0711
http://www.nxtbook.com/nxtbooks/naylor/PPIS0611
http://www.nxtbook.com/nxtbooks/naylor/PPIS0511
http://www.nxtbook.com/nxtbooks/naylor/PPIS0411
http://www.nxtbook.com/nxtbooks/naylor/PPIS0311
http://www.nxtbook.com/nxtbooks/naylor/PPIS0211
http://www.nxtbook.com/nxtbooks/naylor/PPIS0710
http://www.nxtbook.com/nxtbooks/naylor/PPIS0610
http://www.nxtbook.com/nxtbooks/naylor/PPIS0510
http://www.nxtbook.com/nxtbooks/naylor/PPIS0410
http://www.nxtbook.com/nxtbooks/naylor/PPIS0310
http://www.nxtbook.com/nxtbooks/naylor/PPIS0210
http://www.nxtbook.com/nxtbooks/naylor/PPIS0110
http://www.nxtbook.com/nxtbooks/naylor/PPIS0609
http://www.nxtbookMEDIA.com