AF&PA releases capacity Survey.

AF&PA RELEASES CAPACITY SURVEY. The American Forest & Paper Association, Washington, D.C., USA released its 46th Annual Survey of Paper, Paperboard and Pulp Capacity on March 10 in New York, New York. The Survey indicates that U.S. paper and paperboard capacity continued to edge lower in 2005, declining 0.8% to 99.3 million short tons. U.S. paper and paper-board capacity contracted 4.4% between 2000 and 2005 or at an average annual rate of 0.9%. The Survey indicates that paper and paperboard capacity will decline another 2.0% in 2006 and then expand slightly during the subsequent two years--rising 0.2% in 2007 and 0.4% in 2008.

The 2005 capacity reduction of some 760,000 tons reflected the removal from the Survey base of 45 machines, which was partially offset by capacity growth from improvements in efficiency and the ramping up of new tissue paper machines. In actuality, more than one- third of the machines removed in 2005 had already been idled in previous years, but they were retained in the base due to the prospect of re-start. However, subsequent information indicated that they would not be restarted.

The 2006 decline reflects the residual impacts of machines removed from the Survey base for part of 2005 and the scheduled closure of five additional machines in 2006. The capacity reductions associated with the shutdowns will be partly offset by the start-up of four new tissue paper machines in 2006 and an additional three in 2007.

U.S. paper-grade market pulp capacity rose 2.3% in 2005, but is projected to decline at an average annual rate of 0.7% during the 2006-2008 projection period.

The Survey covers U.S. industry capacity for the years 2005 through 2008 for all pulp, paper and paperboard grades. Industry total capacity by grade for all U.S. mills is included in the report. The complete Survey with detailed tables may be purchased through AF&PA's website www.afandpa.org for $750, or by contacting Jared Davis at AF&PA (phone [phone], email: [e-mail]).