Several high profile mergers and partnerships have occurred recently in the containerboard packaging industry and recyclers, brokers and paper producers are waiting to see what kind of impact such activity will have on the recovered fiber market.
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James Porter of Southern Container Corp., Solvay Paperboard, which was acquired by Rock-Tenn Co. in January 2008, offered his insights on the effect of consolidation as the guest speaker at the Paper Stock Industries Chapter (PSI) of ISRI open meeting at the recently concluded Paper Recycling Conference.
A weak U.S. dollar and strong global demand have been pushing up commodity prices, Porter said, commenting on general economic conditions driving the containerboard industry. High oil prices are also having an impact. “Oil is permeating everything we do,” Porter said.
However, while the general economy is “tenuous” at best, according to Porter, the containerboard industry has remained relatively healthy. Porter attributed the strength to constant box demand as well as the weak dollar, which has lead to rising export demand and declining imports into
Furthermore, domestic capacity for containerboard is shrinking in
And while several high profile mergers in the containerboard industry have occurred, including International Paper’s acquisition of the containerboard packaging and recycling businesses of Weyerhaeuser Co., which was announced earlier this year, Porter said the news is more good than bad. “Consolidation will be part of the landscape going forward,” he said. However, the voracious demand from overseas combined with little additional virgin pulp capacity will keep the industry strong. “There will be fewer players, but all demand will fall on recovered paper mills,” Porter said.
At the meeting, PSI also announced the dates and location of its 47th Annual Convention, which will be Nov. 11-14, 2008, at the JW Marriott at
The Paper Recycling Conference and Trade Show was held June 22-24 at the Hyatt Regency O-Hare in