Pulp & Paper Mills

Brief Excerpt from Industry Overview Chapter:

The US pulp, paper, and paperboard mill industry consists of about 250 companies with combined annual revenue of about $75 billion. Major companies include Wausau Paper and units of integrated manufacturers International Paper, Georgia-Pacific, and Weyerhaeuser. The industry is highly concentrated: the top 20 companies account for 75 percent of revenue.

COMPETITIVE LANDSCAPE

Demand depends on both consumer and business use of paper products. The profitability of individual companies depends largely on production efficiency. Mills owned by large paper companies have advantages by being vertically integrated; the parent corporation may own timber farms, sawmills, pulp and paper mills, conversion plants, and other end-product manufacturing facilities. Small mills can compete successfully in regional markets, in close proximity to timber sources or customers. Mills are highly automated and capital-intensive: average annual revenue per employee is about $650,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major product segments are wood pulp, paper, paperboard, and newsprint. Paper accounts for 60 percent of industry revenue, paperboard for 30 percent, and pulp and newsprint for about 5 percent each. Other products include nonwood pulp, from cotton, straw, rag, flax, de-inked scrap paper and bagasse (the outer stalk of sugar cane), and byproducts such as turpentine and tall oil. Within the paper segment, major products are tissue papers, uncoated sheet papers, and coated printing papers. Paperboard is used mainly to make boxes and other containers.

Wood pulp is the major intermediate product used to make paper, paperboard, and newsprint. Most...