No Secrets to Mill Buying

Session moderator Ed Tucciarone, vice president of eastern sales for Smurfit-Stone Container Corp., Clayton, Mo., began the session by outlining the importance of inventory management, consumption volatility, export markets and quality.  Tucciarone said that mixed paper is playing a larger role in furnishing mills presently. The role of export markets is also expanding, adding that host-city Chicago is also experiencing the shift to export markets for various grades. However, Asian OCC, is causing problems for U.S. mills, as are single-stream collections, moisture and UV printing.

John Lucini, VP of fiber supply for the Pacific Region of SP Newsprint & Recycling, echoed the problem of obtaining a quality supply of recycled fiber. He suggested steps mills should take to ensure a stable supply of quality fiber, including consistent buying and developing a secure supply base that focuses on relationships.

“If you are easy to do business with, you’ll be a preferred customer for your supplier,” he said.

In terms of inventory strategy, Lucini suggests consistent purchasing, protecting from seasonal and market-related fluctuations in supply and allowing for efficient warehousing operations.

In light of the declining quality of incoming recovered paper, Lucini suggested delving deeper into the waste stream to obtain the quantity of fiber required. He also stressed understanding a supplier’s capabilities and quality issues and educating them on the impact poor quality material has on the finished product.

Lucini addressed the use of financial derivatives. This tool helps to stabilize raw material costs, but does not assure raw material supply. However, he stressed that financial derivatives are only as secure as the financial institution providing the service.   

Jeff Kibler, executive vice president of Visy Recycling, also stressed quality issues. He assured attendees that having a consistent quality specification is important to suppliers.

Mills can also set themselves apart from their competitors through customer service and transportation, as movement and the price of fiber are key, Kibler says.

Jan Marrs, vice president of supply for Weyerhaeuser, also stressed providing suppliers with a good experience. She stressed Weyerhaeuser’s commitment to safety, fair-market pricing, consistent takeaway and payment terms and a high level of ethics and integrity. The company also sees itself as a company that is easy to deal with. 

E-tools facilitate dealing with Weyerhaeuser, enabling domestic customers and suppliers to check on the status of their orders.

Marrs added that Weyerhaeuser mills are increasing their inventories, selling to third parties and taking advantage of their regional locations in response to current market conditions.

The Paper Recycling Conference and Trade Show took place in late June at the Hyatt Regency Chicago in downtown Chicago. The 2004 Paper Recycling Conference & Trade Show will take place in Atlanta at the Renaissance Waverly June 27-29.