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Management Side
Technical Side
A Renaissance in Investment
Print
It appears that we are near the beginning of a new investment cycle in the pulp and paper industry in the United States. This is my opinion, not fact... yet. However, there are a number of signs that point to this possibility.

First, it has been a long time—two decades—since such a cycle commenced here. No other major industry has gone this long without a significant widespread reinvestment cycle.

Second, in most grades of paper and paperboard, the consolidation efforts have left only two or three major players, creating a balance in supply and demand favoring higher margins for producers. Sustained margin growth in the future will require modern and efficient facilities.

Third, the weakness in the U.S. dollar will likely increase the price of imports, subsequently improving prices here in the short term, creating cash flows for reinvestment.

Fourth, new technologies, especially on the energy extraction end of the business, will require complete new facilities.

Fifth, local incentives, in terms of local tax breaks, training assistance, free or near free improved sites, and so forth are very attractive for relocating businesses.

Together, these five factors point to a breakout from established thinking and a renaissance in our manufacturing base.


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