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NORTH AMERICAN DEMAND FOR MINERALS AND CHEMICALS IN COATED PAPERS EXPECTED TO INCREASE TO 10.4 BILLION POUNDS BY 2002

 FAIRFIELD, N.J., Jan. 5 /PRNewswire/ -- Coated paper is a significant market for minerals and specialty chemicals, consuming 6.2 billion pounds in North America in 1992. While demand for coated papers will increase at an average annual rate of 3.9% from 1992 to 2002, the demand for minerals and specialty chemicals used to produce these papers will increase dramatically faster, at 5.3% per year reaching 10.4 billion pounds. Selected products, including calcium carbonate, ASA sizing agents, neutral rosin, and drainage and retention aids will experience even more dramatic growth (depicted in Table 1), according to a recently completed study by Kline & Company, Fairfield, N.J., entitled MINERALS AND SPECIALTY CHEMICALS IN PRINTING AND WRITING PAPERS 1992-2002.
 Table 1
 FORECAST ANNUAL GROWTH IN U.S. DEMAND FOR SELECTED MINERALS &
 SPECIALTY CHEMICALS IN COATED PAPERS 1992-2002
 Product Average annual
 growth, lbs %/yr
 Calcium carbonate 13.4%
 Drainage and retention aids 10.9
 Average all minerals and chemicals 5.3
 Sizing agents 4.7
 Binders 4.0
 TIO2 2.8
 Kaolin 1.4
 For Kline's study, interviews and focus groups were conducted with technical managers at paper mills all across North America, as well as with executives at printing and publishing companies, to identify the major marketing and technological trends affecting coated paper demand. These trends were then analyzed in a trend-impact model to test the sensitivity of demand for each mineral and chemical under various assumptions.
 Numerous trends were analyzed for their impact on the demand for minerals and chemicals in coated papers in North America. Those which were found to have the most dramatic impact include:
 -- Alkaline paper making conversions of coated groundwood papers
 -- Growth of multiple layered coatings
 -- Mandated increases in the use of post-consumer fiber/de-inked
 pulp (PCF/DIP)
 -- Growth of dull- and matte-coated papers
 -- Higher coating machine speeds
 -- Shifts in the percentage of gravure versus offset printed papers
 The major technical trend is the shift to alkaline papermaking. This is creating a growing demand for carbonate pigments, in the range of 12% to 15% a year. Both ground and precipitated calcium carbonates are benefitting, although the question remains as to the relative market penetration of each. Free-sheet papers are already 85% alkaline, and groundwood is beginning to move up from the 5% to 10% range.
 Double and triple coatings are currently used on some super premium number one papers as well as number one and number two coated paper. These types of papers are used for annual reports, product brochures, and art papers. Dobule coatings present the paper maker with the opportunity to enhance critical parts of the coating layer so that costs can be reduced. In the future, double and triple coatings will be utilized more routinely. This will precipitate a need for more cationic additives for use in coatings and also in the base sheets. Cationic coating formulations will give extremely quick immobilization of the coating color.
 In the next ten years, the recycle content of all papers, including coated papers, will increase. Mandated levels of PCF for all papers in California will reach 40% in the next few years, and we can expect these requirements to spread to other states. This will present several drawbacks to paper makers, one of which is the lower strength of high recycle content, also brightness and opacity are poorer. Opacity is a general problem with recycled content papers because of the fiber degradation that takes place in the recycling process. As a result, calcined clay will continue to grow significantly in this application, because it is a cost effective opacifier.
 In addition, as recycled content and alkaline papermaking increases, the use of microparticle retention and drainage aids will increase. Such products as Composil produced by Procomp, Hydrocol from Allied Colloids, and Hydrosil from T. Lindstrom will increase in use. Currently, only a small number of mills use the microparticle system. This will increase dramatically by the year 2002.
 In the next 10 years, there will also be an increase in the production of matte- and dull-coated papers. This trend is being driven by the aging of our population, which finds that high-gloss papers cause eye strain and are difficult to read. New technologies such as Soft-Nip calendering, plastic pigments, and new lattices will allow the paper maker to produce a coated paper having good printing properties without high sheet gloss. Here again, calcium carbonate will benefit as a low gloss coating pigment.
 In the next 10 years, paper coating speeds will also increase. In Europe, speeds now reach 1,500 meters per minute with designs planned for 2,000 meters per minute. There is every reason to believe that more and more coaters running at these rates will be built in North America. At these speeds, coating color rheology is critical. European paper makers have solved these problems by various means, including changing the clay coating blends, changing binders, adding cobinders, and changing blade configurations. Higher machine speeds require better and more efficient techniques for water removal from the wet sheet. In addition, breaks at these speeds can be truly disastrous. As a result, better and more efficient drainage and retention aids will be required. Such companies as Nalco Chemical, Betz, Paper Chem, Hercules, Quaker Chemical, and Ashland Chemical are all active in developing new and more efficient drainage and retention aids.
 These trends and many more are extensively analyzed in Kline's new report, MINERALS AND SPECIALTY CHEMICALS IN PRINTING AND WRITING PAPERS 1992-2002." The report is available on a subscription basis only and is based on over 150 interviews and focus group feedback with key paper manufacturers, printers, advertisers, publishers, and materials suppliers. As part of the project, a model has been developed to accurately forecast 10-year demand for 18 separate mineral and chemical products used in coated paper production.
 This study is one of a three-part series that Kline is researching, which will also include an analysis of uncoated papers and newsprint. Information on how to subscribe to any of these studies can be obtained from Kline & Company, 165 Passaic Ave., Fairfield, N.J.
 -0- 1/5/94
 /CONTACT: Todd Harris of Kline & Company, 201-808-3408/


CO: Kline & Company Inc. ST: New Jersey IN: CHM PAP SU:

CM -- CH004 -- 9436 01/05/94 15:28 EST
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