***Online Exclusive -- The Mill Side of the Story***

Dr. James Burke, CEO of SP Newsprint, Atlanta, did not mince words concerning the state of the publishing, printing and paper industries. “The print-on-paper publishing business is in a long-term decline in the U.S.,” Burke stated to attendees of the Paper Conference Recycling & Trade Show, which took place in New Orleans in late June.

Burke presented statistics to support his claim, including a leap in the number of U.S. paper mill closings each year since 1997. While in the early 1990s just two to five paper mills closed each year, since then the closings have come at a staggering pace: 12 in 1997, 16 in 1998, seven in 1999, 16 in 2000 and 21 mills in 2001.

In many industry segments, the mill capacity is not being replaced. “There’s been only once newsprint machine built in the U.S. in the last 10 years,” Burke stated. He also noted that since 1980, the number of newsprint mills in the U.S. has declined from 79 to 55.

Despite the paper industry’s ailments, recovered fiber continues to be a sought after commodity, both by remaining mills in the U.S. and by the expanding number of mills overseas. In a 20-year span, U.S. newsprint mills have more than tripled their annual consumption of scrap paper—from 1.5 million tons in 1980 to 6.5 million tons in 2000. “This required hundreds of millions of dollars of capital investments,” Burke remarked of the changeover in production from virgin to secondary commodities.

But Burke warned recyclers not to take their end market for granted. He said that of the three main drivers of the shift from virgin pulp to recycled paper, two of them might have been based on “bogus reasons.” Burke said the landfill shortage as a motivator turned out to be an unwarranted scare, and that a feared shortage of wood chips has also never developed.

Burke also said the recycling industry’s shift to a single-stream collection and processing presents a threat to the future. “Glass is not only not recyclable, it is a terrible contaminant,” he stated. “It is also the most serious safety hazard we have.” He also said that environmental regulators are concerned about the presence of polymer “floaters” in the effluent streams of paper mills that are pulping scrap paper contaminated with plastic. “If we can’t get a clean product, we’ll have to adjust our mills to use more wood.”

On the collections end, Burke said there is also a feeling that the paper industry (along with the aluminum industry) is carrying the weight of the recycling industry. “Beverage containers—except for aluminum cans—are not recyclable,” Burke said in regard to the less established plastic market and the struggling glass market. “Plastic bottles and tin cans don’t really carry their own weight. I’m tired of carrying recycling programs.”

(To view the charts from Burke's presentation at the Paper Recycling Conference click here)

And perhaps anticipating what his audience of paper recyclers was thinking, Burke said they would be unwise to turn their backs completely on domestic mills. “I know what you’re thinking: Don’t worry, the export market will save the recovered paper industry, and they take trash,” he quipped. But Burke remarked that the export markets can be volatile, and that “they need a counter-balancing domestic market to maintain adequate pricing.”