Well furnished: prices can be volatile, but demand for fiber from North America's largest scrap paper consumers remains steady.

Makers of paper, packaging and building products use a variety of materials as furnish for their production plants, with fiber coming from a combination of newly forested sources and recycled sources.

Without question, the collection of companies that makes up the forest products industry continues to rely on this dual stream of feedstock commodities: harvested timber, wood chips and other cultivated products (often from managed forests) as one stream, and recycled paper drawn from factories, offices, retailers and households as the other.

A visitor to the Web site (www.afandpa.org) of the American Forest & Paper Association (AF&PA) can recognize immediately that the emphasis is split between forestry and secondary fiber. Scrap paper provides more than one-third of the feedstock used to make paper and paperboard in the United States.

MAJOR COMMITMENT. The consumption of recycled fiber in North America has not been growing by leaps and bounds for the past several years primarily because overall paper production levels are flat.

For paper recyclers, the overall effects of this flatness have not always been dramatic because demand from China and other growing nations has, until recently, kept pricing strong.

In North America, recycled fiber continues to hold onto its overall market share as a source of pulping material, with scrap paper supplying about 37 percent of overall fiber needs at mills in the United States in 2004, according to the AF&PA. From 1997 through 2004, this percentage has remained relatively steady at between 35 percent and 38 percent.

Because U.S. mills are dependent on scrap paper for more than one-third of their feedstock needs, the AF&PA expends considerable effort promoting paper recycling efforts in the United States, offering program assistance setup and awarding leading recyclers each year.

The organization has made a visible commitment to increase the paper recycling rate in the United States from its current 50.3 percent to a 55 percent recovery rate by 2012.

Overall recovery trends have been positive in the United States, with the recovery rate having climbed from the 35 percent range in 1993 to the 50 percent range just 12 years later.

The paper industry's most commonly consumed grades enjoy recovery rates far above 50 percent. Old corrugated containers (OCC) are now recovered at a rate ranging from between 72 percent and 75 percent each year. Old newspapers (ONP) are similarly recovered at an annual rate of above 70 percent.

The experiences of several European nations show that, with concerted effort (and sometimes abetted by packaging recycling laws and landfill taxes), paper recovery rates across the spectrum of grades can easily hit 55 percent.

Germany is estimated to be recovering 73 percent of its scrap paper each year, with The Netherlands and Scandinavian nations having similarly high recovery rates.

Recyclers in nations such as Spain and the United Kingdom, seeing healthy markets for recovered fiber in Europe and Asia, have also ramped up collection and are at or above the 55 percent goal targeted here in the United States.

In Spain, an association of papermaking companies (Asociacion Espanola de Fabricantes de Pasta, Papel y Carton, or ASPAPEL) is launching an educational and bin placement program to improve secondary fiber collection.

David Barrio, director of recovered paper for the Madrid-based group, told attendees of the European Paper Recycling Conference in Brussels in October of 2005 that ASPAPEL's "Tu papel es importante" program has resulted in the placement of some 60,000 bins that help collect some 800,000 metric tons per year of scrap paper.

The Spanish paper industry wants to help collect the 2 million tons of post-consumer paper that ends up in Spanish landfills, said Barrio. "We can use that raw material in our mills."

The organization has a 65 percent recovery rate target for Spain in 2007. Barrio says the campaign targets schools in particular since students will be "recyclers of the future, and they will learn that paper is not waste."

It is unclear whether North American paper makers and recyclers, faced with little overall growth in domestic consumption, will take such measures to promote higher recovery rates on this side of the Atlantic.

STABLE OR STAGNANT? To many business analysts, "steady" can also equate to "stagnant," however. Although recyclers have been asked to supply considerable new mill capacity in China and other parts of Asia, as well as in some new mills in Europe, there has been very little new papermaking capacity brought online in North America this decade.

With the exception of a large new tissue mill in Barton, Ala., constructed by SCA Tissue NA (See "Green Thinking," Recycling Today, May 2005, p. 30), there have been very few new mills built this decade. Rather, the overall trend has been toward the shuttering of smaller mills with perhaps some capacity growth at remaining Facilities.

Among mill companies announcing recent plant closures is Canada's Cascades Inc., which is closing a coated papers plant in Thunder Bay, Ontario, and has reduced capacity at a boxboard plant in Montreal.

Also in late 2005, Weyerhaeuser, Federal Way, Wash., announced the closing of a paperboard production line in North Carolina, and Canada's Domtar Inc. announced several production cutbacks, including the closure of a printing paper mill in Ontario and the selling off of a mill in Vancouver.

The end-of-year announcements continued a trend that was evident throughout 2005, as the paper industry continued to carefully manage capacity even in an economy that otherwise seemed prosperous by many measures.

Also in 2005, Rock-Tenn Co., Norcross, Ga., closed a folding carton plant in North Carolina; Canada's Norampac shut down a paper machine in Ontario; Weyerhaeuser idled a pulp and paper mill in Saskatchewan; Georgia-Pacific announced it would shut down a tissue converting plant in Maine; and Smurfit-Stone Container Corp., Chicago, announced plans to shut three container-board mills in North America (two in Canada and one in the United States).

But while these capacity cutbacks may be signs that the industry is not in a growth mode, the news was balanced with occasional announcements of plant expansions as well, such as Kruger Co. subsidiary Scott Paper Ltd. expanding capacity at a mill in Tennessee. North American acquisitions by Pratt Industries, Cowers, Ga., may result in that company needing an additional 80,000 tons per year of recovered fiber.

To what extent North American paper companies have been operating more profitably as the decade has progressed depends on which company is being considered.

Weyerhaeuser Co. has reported profits in 2005, but the company announced what it considered disappointing third quarter results in October. Weyerhaeuser CEO Steven Rogel cited "difficult business conditions" caused by higher energy, chemical and transportation prices. Nonetheless, the company earned $285 million in profits during the three-month period.

Georgia-Pacific Corp. (GP), Atlanta, is in the process of being acquired by privately held Koch Industries. In one of its final public filings, GP reported third quarter 2005 income that was down from 2004 levels, but still enjoyed what GP CEO A.D. "Pete" Correll called "a solid quarter." The company earned $145 million in net income for the quarter.

The results of most diverse forest products companies, such as GP and Weyerhaeuser, indicate that lumber and building products markets could be more profitable compared to paper and packaging, especially industrial boxes.

Box maker Smurfit-Stone Container Corp. reported red ink for its third quarter of 2005, sustaining a net loss of $229 million. Unlike GP and Weyerhaeuser, the company does not have building and forest products operations to offset any papermaking losses.

Papermaker Cascades Inc., Kingsey Falls, Ontario, Canada, finished its third quarter slightly ahead of break-even, earning $3 million (Canadian). CEO Main Lemaire remarks, "Cascades has managed to be cash-flow positive despite very challenging business conditions, characterized by increased foreign competition and lesser demand for certain of our products."

While some of these results are far from glowing, many paper company executives can look back to earlier this decade, when the red ink was more sustained and dramatic.

THE PAPER CHASE. Even though consumption of recovered fiber may be relatively flat for North American mills, this has not made things easier for mill buyers.

As noted earlier, the booming economy of China in particular (and many other parts of Asia as well) has resulted in tremendous new mill capacity coming online overseas.

Domestically, the residential construction boom has also created a demand for the types of building products (gypsum wallboard, insulation, fiberboard, composite products, grass seeding mixtures) that can absorb scrap paper, putting an additional set of buyers onto the scene.

So even though domestic paper demand may be flat, the demand for raw materials has not similarly leveled off] Rather, buyers representing overseas mills have been particularly active securing supply directly from North American paperstock plants and through other sources.

For the consuming companies on this list, the situation presents considerable challenges. If there is a silver lining, it is that the overall global demand should keep recyclers eager to uncover additional supply, creating a healthy supply base that can keep recycled-content paper mills supplied with furnish, as long as they can meet the price.

AMONG THE MISSING

If you work for or know of a company that you suspect should be on this list but was not contacted (or did not respond), please let us know and we will make sure to let out readers know. Editor Brian Taylor can be contacted via e-mail at [e-mail].

The author is editor of Recycling Today and can be contacted at [e-mail].

                                                             No. of
Company                              Company                 Facilities
Address                              CEO                     (1)

Weyerhaeuser Co.
Federal Way, WA 98003                Steven R. Rogel         9 mills;
                                                               19 recy.
                                                               plants
Georgia-Pacific (Div. of Koch
  Industries)
133 Peachtree St. NE, Atlanta,
  GA 30303                           A.D. "Pete" Correll     200 (3)
Smurfit-Stone Container Corp.
150 N. Michigan Ave., Chicago,
  IL 60601                           Patrick J. Moore        250 (3)
Cascades Group
404 Marie-Victorin Blvd., Kingsey
  Falls, QC J0A 1B0                  Alain Lemaire           25
Bowater Inc.
55 E. Camperdown Way, Greenville,
  SC 29550                           Arnold M. Nemirow       11
Abitibi-Consolidated Inc.
1155 Metacalfe St., Montreal, QC
  H3B 5H2                            John. W. Weaver         20
Sonoco Products Co.
1 N. Second St., Hartsville,
  SC 29550                           Harris E. DeLoach Jr.   14 mills;
                                                               30 recy.
                                                               plants
Caraustar Industries
3100 Joe Jenkins Blvd., Austell,
  GA 30106                           Michael J. Keough       15
Temple Inland Inc.
1300 S. MoPac Expwy., Austin,
  TX 78746                           Kenneth M. Jastrow II   6
Newark Group
20 Jackson Dr., Cranford, NJ 07016   Robert Mullen           10 mills;
                                                               13 recy.
                                                               plants
SP Newsprint Co.
1895 Phoenix Blvd., Ste. 400,
  Atlanta, GA 30349                  Joseph R. Gorman        2
Rock-Tenn Co.
504 Thrasher St. NW, Norcross,
  GA 30071                           James Rubright          15
International Paper
400 Atlantic St., Stamford,
  CT 06921                           John Faraci             7
Kruger Inc.
3285 Chemin Bedford, Montreal, QC
  H3S 1G5                            Joseph Kruger II        9
Pratt Industries
18000 Sarasota Business Pkwy.,
  Conyers, GA 30013                  Richard Pratt           2 mills
U.S. Gypsum Corp.
125 S. Franklin St., Chicago,
  IL 60606                           William C. Foote        10
SCA Tissue North America
1451 Macmahon Dr., Neenah,
  WI 54957                           Joe Raccuia             5
Packaging Corp. of America
1900 W. Field Court, Lake Forest,
  IL 60045                           Paul T. Stecko          4
Solvay Paperboard
53 Industrial Dr., Syracuse,
  NY 13204                           James B. Porter III     1
US GreenFiber LLC
2500 Distribution St., Charlotte,
  NC 28203                           Dennis Barrineau        12

                                     No. of
Company                              Employees   2,600 Most Commonly
Address                              (2)         Consumed Grades

Weyerhaeuser Co.
Federal Way, WA 98003                53,600      OCC, DLK, mixed paper
Georgia-Pacific (Div. of Koch
  Industries)
133 Peachtree St. NE, Atlanta,
  GA 30303                           55,000      OCC, mixed paper
Smurfit-Stone Container Corp.
150 N. Michigan Ave., Chicago,
  IL 60601                           35,000      OCC, ONP, mixed paper
Cascades Group
404 Marie-Victorin Blvd., Kingsey
  Falls, QC J0A 1B0                  15,600      OCC, ONP, mixed paper
Bowater Inc.
55 E. Camperdown Way, Greenville,
  SC 29550                           8,600       ONP, OMG
Abitibi-Consolidated Inc.
1155 Metacalfe St., Montreal, QC
  H3B 5H2                            16,000      ONP, OMG
Sonoco Products Co.
1 N. Second St., Hartsville,
  SC 29550                           10,870      OCC, mixed paper, ONP
Caraustar Industries
3100 Joe Jenkins Blvd., Austell,
  GA 30106                           5,533       Mixed paper, OCC, DLK
                                                   cuttings
Temple Inland Inc.
1300 S. MoPac Expwy., Austin,
  TX 78746                           17,700      OCC
Newark Group
20 Jackson Dr., Cranford, NJ 07016   2,619       OCC, mixed paper, chip
                                                   board
SP Newsprint Co.
1895 Phoenix Blvd., Ste. 400,
  Atlanta, GA 30349                  i.n.a.      ONP
Rock-Tenn Co.
504 Thrasher St. NW, Norcross,
  GA 30071                           8,800       OCC, mixed paper, ONP
International Paper
400 Atlantic St., Stamford,
  CT 06921                           91,000      OCC, DLK, SWL, office
                                                   grades
Kruger Inc.
3285 Chemin Bedford, Montreal, QC
  H3S 1G5                            10,500      ONP, OMG
Pratt Industries
18000 Sarasota Business Pkwy.,
  Conyers, GA 30013                  i.n.a.      Mixed paper, ONP,
                                                   office grades
U.S. Gypsum Corp.
125 S. Franklin St., Chicago,
  IL 60606                           14,100      OCC, DLK, flyleaf
SCA Tissue North America
1451 Macmahon Dr., Neenah,
  WI 54957                           2,600       Office grades, OCC,
                                                   mixed paper
Packaging Corp. of America
1900 W. Field Court, Lake Forest,
  IL 60045                           7,900       OCC, rolls
Solvay Paperboard
53 Industrial Dr., Syracuse,
  NY 13204                           i.n.a.      OCC, mixed paper
US GreenFiber LLC
2500 Distribution St., Charlotte,
  NC 28203                           550         ONP, OCC, telephone
                                                   directories

(1) = Facilities that consume scrap paper, unless otherwise noted;
(2) = Figure is for overall global operations; (3) = Total includes a
variety of facilities, including mills