It will be interesting to see how these events sort out, but we see some trends coming that will strongly affect the next decade or so of the pulp and paper industry.
Last month in this space, I mentioned the coming problems with coal and other solid fuels. I had first mentioned that in the Thompson Private Letter (the place where we put advanced notice on all significant topics we see facing the industry). This month, in the same light, we mentioned in TPL first, what we see as a coming problem with fiber sources for recycled tissue.
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Recycled tissue is unique in that the feedstock for it is not tissue, but other grades. Office waste, hard whites and similar grades of wastepaper are fed into the composition of recycled tissue. These grades are diminishing in availability as less printed material is used per capita. "Per capita" is important because tissue consumption grows on a per capita basis. If the feedstock is shrinking on a per capita basis and the demand for the product is growing on a per capita basis, there is going to be a supply/demand intersection point that will cause angst.
Then, going back to energy for a minute, there is plenty of turmoil here. We see the viability of corn based ethanol coming into question as farmers are expected to keep up with demand for food. The latest issue of "Progressive Farmer" states that in the next forty years farmers will have to produce as much food as they have in the last 10,000 years. Serious matters, indeed.
All of this says, our scarcest resource, capital, must be deployed very carefully if we are to successfully negotiate the coming decades. We know we build facilities that last 30, 40 or 50 years. It will take a great deal of skill to navigate the strategic thought process and successfully deploy capital in the future. We face more uncertainty, more decisions than probably any time in the history of the pulp and paper industry.