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Reality in Finland: the new epicenter of pulp and paper
Jim Thompson (jthompson@taii.com)
Week of 29 Sept 08
Click here, then click "Trans lator" in top navigation bar for other languages.
Now comes news from Karelia that mills are going out of business. Karelia is a pleasant, bifurcated area in eastern Finland. I say bifurcated because Stalin made sure that after World War II a portion of it remained within the borders of Russia. This now dimly in the past decision, dim for at least those of us not living there, is a source of a portion of the problem: Russia's new duty on the export of raw, unprocessed wood means these mills in modern-day eastern Finland have a new, burdensome tax on much of their raw material supply coming from Finland's own former lands.
Another source of the problem is this: despite extraordinarily keen attention to the stewardship of their industrial forests, the economics of tropical eucalyptus pulp have also caught up with these far-off mills. When one could carefully husband nearby resources, even if they were slow growing, one could make paper on modern machines and ship it to distant markets at an acceptable profit. But when economical fiber can be cheaply transported directly to state-of-the-art mills near finished goods markets, it makes little sense to haul it from one place to a neo-antipode and then on to a third market thousands of miles away.
For decades we have watched the march of the wrecking ball south from the forests of Canada to those of the northern tier of the United States. Poor forestry practices in some places, poor grade (market) choices in others, and a lack of reinvestment were and are often blamed for the plight of the old mills in the path of the cutting torch. Due to the remote location of these North American mill towns, we have seen governments at all levels, and some private investors that did not know any better, foolishly try scheme after scheme to save mill towns that have no choice but to die. The scene has become boringly predictable: within six months to a year of a new investment scheme reopening one of these dinosaurs, government officials and the local press say something like, "See, we told you we could save it (the mill)." Then, within a couple more years, the facility is closed once more, with blame being placed on some far-off fault, when the real fault was the repeated attempts to save a patient that needed more organ transplants than a skeleton at Halloween.
What is now interesting to a gadfly like me is to watch events develop in Finland. How will the Finnish people, a rugged lot if ever there was one, react to these adverse conditions visiting their shores? One matter that is different from North America: the forest products industry is a very significant portion of the Finnish economy; the shutdowns discussed in Karelia were cited by some sources as representing 1 to 1 1/2% of the Finnish GDP. Another: at least in pre-European Union days, Finland did not fear government ownership and participation in industrial businesses.
Finland has been an economic leader in the past. The last couple of decades have seen Finland turn to technology (it is so obvious I almost need not say it: Nokia) as a way for the country to earn an acceptable return on its most important resource, its people. At the same time, Finland has remained a powerhouse of modern forest products' practices, both in the industry it has maintained at home and in the technology, exported in various ways, it has shipped abroad. Yet, if what we are seeing now is the beginning of the end of the home-grown pulp and paper industry in Finland, what next? What next for Finland? And who or where dons the mantle of leadership in the forest products industry? For the problem, on a worldwide basis, is not lack of demand for pulp and paper products, but a changing economic paradigm and market shift that dictates the center of the pulp and paper industry move.
My unfolding fifteen year old prediction that the pulp and paper industry of 2045 consists of tissue, packaging and energy businesses indicates the center will not be in far northern climes. However, it is becoming increasingly clear to me where it will be, and, surprise, surprise it will not be China. I think it will be Africa. The only thing Africa lacks at the moment is pan-African political stability, yet in my lifetime, this continent has been moving ever so slowly towards such a condition. Democracy and civility have been nibbling at the edges of this vast land mass for decades. If, as a whole, the continent can achieve a modicum of stability, it can become the feeder for pulp and paper markets world wide. Much of the continent has the climate. Much of the indigenous rainforests have been depleted due to the subsistence lifestyle of the people and hence begs for rejuvenation, even with industrial eucalyptus. It is blessed with a location in the world's oceans which makes every other place close. When taken as a whole, the continent of Africa faces no major choke points (such as the Panama or Suez Canals) to reach any major pulp and paper consuming nation in the world. It is accessible in all seasons around its entire periphery. The soils are in poor condition in many places, but they can be improved. Africa is the least seismically active continent on earth (its only seismic history is along its northern coast). There are more reasons than not to bet on Africa as the future center of the pulp and paper industry. This is an opportunity for politicians, environmentalists and an industry, ours, to come together to fix a sad corner of the world.
Once direct service is warranted, it is only a nine hour flight from Helsinki to central Africa, with merely a one hour change in time zones. Time for some more Finnish exports?
Of course, with a "clean slate" start as I describe above, one can start with a fresh, higher standard towards safety. What can you do to improve your safety standards where you are today?
Be safe and we will talk next week.
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| Second Page... |
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[Adv.] OpTest's OpTiSurf
OpTest's "OpTiSurf" is indeed a new way to measure surface roughness. According to OpTest, "The OpTiSurf revolutionizes the measurement of surface roughness of paper. Using advanced optics and algorithms, it quickly quantifies the optical roughness of entire sheets. OpTiSurf correlates with traditional air leak tests but has greater precision and speed, with less maintenance." And I would emphasize that no air is required. I suggest you look at it today--just click on "More" below.
And when you talk to OpTest, please say hello for us here at Nip Impressions.
Regards,
Jim
Answer to last week's riddle: "Facetious" contains every vowel, exactly once, in alphabetical order.
The riddle last week asked: "I am not being 'facetious' when I tell you that the word has an interesting property totally independent of its meaning. What is this nearly unique feature?"
This week's riddle: List 2 ways to make change for a dollar with exactly 50 (common) U.S. coins.
More...
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Click on the logos above to see these features.
Interested in placing your White Paper or Video here?
Please contact Jim Craven, our sales representative (see below).
Remember, To assure you always receive Nip Impressions, "whitelist" this address:
nipimpressions@emarket.bondware.com
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| Letters from our Readers... |
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What is on our readers minds? Dear Readers:
Solving last week's riddle seemed to be most of the "heavy lifting" of which you were capable. And who can blame you with all the lousy financial news assaulting us daily? Below are a sampling of your responses.
Jim
---
"Facetious" is the only English word that contains all the vowels in alphabetical order.
Steven J. Moore
Wausau Paper Corp.
Rhinelander, Wisconsin, USA
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Jim,
Enjoy reading Nip Impressions each week, usually a very frank and honest look at our business and business in general. The word facetious is special because it contains all the vowels and in order. It was unusual for me to see this as I am a notoriously poor speller.
Mike Riddle
Smurfit
---
Jim
The vowels in the word appear in sequence - a, e, i, o, u. The "fcts" (read as facts) have it...
Best regards,
J. A. (Jay) Janson
Vice President - Global Services
Setenevici Enterprises
---
Riddle - facetious has all five vowels in order.
I hope you're doing well. We got our power (and sewer pump) back yesterday after three days, so we're much better here in the Land of Love.
Best regards,
Jeff Reese
International Paper
Loveland, Ohio, USA
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Old MacDonald said something other than a-e-i-o-u but I'm being facetious.
Bill Hohns
Altanta, Georgia, USA
***
Jim,
Yet another great column but wishful thinking that anyone could easily get the information to publish executive salaries and performance on the same page. In Ontario, all public employees earning more than $100,000 per year are a matter of public record whether they are a bus driver or policeman working lots of overtime, a bureaucrat or politician, but nowhere is there any performance review. But I guess that the public sector is a different beast than private industry as we keep voting in folks who often have little regard for hard earned taxpayer dollars.
For the riddle this week, I believe that the interesting property of "facetious" is that it contains every vowel in alphabetical order.
Bob Hurter
Ottawa, Canada
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Hey, Bob, we don't let grass grow under our feet here at Paperitalo Publications. Please go to PaperMoney (www.globalpapermoney.com). Look in "Departments" on the left hand side. Then click on "PM40 Executives' Compensation." You will find there the 10 companies of the PM40 for which the US Securities and Exchange Commission has already "rolled up" the compensation packages. We will add more as soon as they are available.
Jim
P.S.: And, with our 18 language translations, you can read them in the one of your choice!
***
Jim,
An observation of a crow in action. In our backyard there is a bird bath. There was some pieces of dry bread on the ground nearby. A crow flew in and took a piece of the bread, flew up on the bird bath, and proceeded to dip the bread in the water and then ate it.
In proceeding similarly with a second piece the crow was spooked and flew away, leaving the bread on the bird bath. Later we saw the crow return directly to the bread on the bird batch, eating it first before continuing with other pieces.
Chuck Green
Webster, New York, USA
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Chuck, I think you have become our resident crow expert. But don't crow about it.
Jim
###
Have a comment? Send your email to jthompson@taii.com. Unless you tell us otherwise, we will assume we can use your name if we publish your letter.
Remember, To assure you always receive Nip Impressions, "whitelist" this address:
nipimpressions@emarket.bondware.com
A convenient shortcut:
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| Advertising opportunities are available... |
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Don't miss today's audience
As you look to the allocation of your advertising budget for 2009, it is very important that you not miss an important audience: those that have shifted from reading print trade journals to reading on line. Here at Paperitalo Publications, we have taken to calling them the PaperActive(TM).
The PaperActive(TM) fit into two camps:
First, the 30 and under crowd. These on line readers:
- have been using email since they were at least 15 years old.
- are extremely comfortable making quick choices on line, even in complex buying situations (such as their own purchase of an automobile).
- do not have a network of older colleagues from which they seek face-to-face advice.
- have little interest in sorting through print magazines to find important buying-decision data.
- want new data wherever they have their computer--and they have it with them all the time.
- want short, pithy articles that get to the point quickly.
Secondly, there is a rapidly growing group of older online readers, the "Senior PaperActive(TM)" if you will. Jim Thompson relates this actual story he experienced with one of these readers just a couple of months ago:
"Let me tell you a story related to me by a 60's+ mill manager this summer. I was in his office and he said this without prompting (I am paraphrasing a bit since I didn't have a tape recorder on me!): 'Jim, the other day I came back from a trip and all the usual industry print magazines were in my mail. Know what I did? I scooped them up and, on my walk through the mill, I dropped them in the pulper. I never open them any more, because you give me everything I need, via the Internet, while I am on the road. You can quote me.'"
It doesn't take much thinking to realize this person never saw your print advertisement.
So, where to go? Nip Impressions (R), PaperMoney (R) and Capital Arguments (TM) are the publications of choice for online readers. Nip Impressions has been around since the 30 year olds graduated from college. In other words, they have read it for their entire professional career.
Call me today to talk about your advertising program for 2009. Don't miss the most important readership group of all--the PaperActive(TM).
Regards,
Jim Craven
Associate Publisher,
Nip Impressions, PaperMoney
and Capital Arguments
Pasadena, California, USA
Tel: 626-799-0036
Email: jcraven1@charter.net
Call Jim today!
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| Jim's upcoming travels... |
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As I travel, I am always looking for someone to go to dinner with, share a barbeque sandwich lunch and so forth. If you are in the area of any of these events (or along the way, since I often drive), give me a call on my cell phone (404.822.3412). I would be delighted to visit with you.
Also, I accept a limited number of trips per year to mills for reimbursement of travel expenses only (I am a cheap date). I like to visit mills and talk, and I'll be happy to hang around a day or two and talk to your professionals, shift teams and so forth, in a formal setting or just out in operations. Contact me for arranging such a visit.
One caveat: clients may require my presence at a time or place that conflicts with these. Clients get priority for every date but my wife's birthday or our anniversary.
1 - 3 Oct 08: Gulf Coast TAPPI Local Section Meeting, Guntersville, Alabama
8 Oct 08: Shreveport, Louisiana
15 - 20 Oct 08: Driving from Atlanta, Georgia to Syracuse, New York with stops along the way.
20 Oct 08: Syracuse, New York (Speaker at "Sustainability & Forest Biorefinery II" - SUNY- ESF)
21 Oct 08: Macon, Georgia (Panelist & Keynote Speaker at Georgia Tech Pulp and Paper Foundation)
22 - 23 Oct 08: Raliegh, NC (NCSU Pulp & Paper Foundation)
27 - 30 Oct 08: Central Wisconsin
31 Oct 08: Oxford, Ohio
Road Notes...
You will not find a layperson more interested in the arcane subject of watersheds than me. In fact, I often bring up this topic as a dinner table conversation. I can get so wound up in this subject that as the evening progresses, you will find bored-to-tears individuals slipping beneath the table to slash their wrists with a dull steak knife. I think this makes me an authority on this subject, able to comment as follows. Over the past few years, and now spreading with even more rapidity, one traveling the highways of the United States will notice new signs declaring that one is now entering such and such a watershed. These are useless. For as much watershed information as I have in my head, it is very difficult on the ground to make any sense of such signs--one needs an aerial view to comprehend a watershed. Somebody is foolishly wasting taxpayers dollars on this endeavor and to what purpose? Do any of you readers have any idea who? Please send me an email if you know the source of this waste.
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| Closing with Creativity... |
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by Travis Hale
A feature highlighting websites intended to expand our thinking. By the way, these may or may not be aligned with our personal opinions here at Nip Impressions.
Can't decide where to retire?
http://www.residentialcruiseline.com/
You can also reach it by clicking on "More" below.
Remember, To assure you always receive Nip Impressions, "whitelist" this address:
nipimpressions@emarket.bondware.com
More...
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Permission granted for reprinting, as long as this entire column is reprinted without modification or truncation.
"Nip Impressions" is a registered trademark (USPTO Reg. No. 2985097) of Talo Analytic International, Inc.
The characters from the novel "The Osage Mill" are fictional and copyright, 2006, 2007, 2008, Talo Analytic International, Inc., all rights reserved.
Be safe, and we will talk next week,
Jim Thompson
Paperitalo Publications
Publications people read (TM)
Paperitalo Publications is a subsidiary of Talo Analytic International, Inc.
   
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