Research -- Where is it?
James R. Thompson, Executive Editor
The continual consolidation in the North American pulp and paper industry over the past decade or so has left us used to seeing headlines of mill closings, mergers, and acquisitions. We have watched the newsprint market demand go into free-fall, while other printing grades have not been far behind. Packaging and tissue grades have been nearly the only source of optimism.
Industry leaders have sought salvation through combinations that cut overhead and reduced businesses to direct manufacturing costs. This was and is possibly the only path forward in dire straights, but it is not a route leading to long-term success. In fact, pursued long enough, the current philosophy will shut down the North American pulp, newsprint, and fine papers industries completely -— it is just a matter of when.
Due to poor track records in the past, senior executives have been quick to shut down research centers. Research centers are indeed difficult to manage -— I covered this in an article the in the magazine "Paper 360" back in January of this year. However, I would challenge any CEO to tell me that sales and marketing is easier to manage than research. We have seen little cutting in this area, yet when I have been brought in as a consultant to help a company out, I find there is often little justification put on the largess heaped on the sales and marketing departments.
On a recent wintry weekend, a colleague and friend stopped by to chat about the industry. He remarked as to having recently been to China -— his first trip. At just one university he visited they were turning out 1200 pulp and paper scientists each year. If the whole of the North American schools are graduating 250 a year, I would be surprised.
Now, let me stop for a moment and reaffirm my internationalist credentials. I think pulp and paper are core components to any rising society, so I commend the Chinese for what they are doing.
My local, or North American, point is this. We are rapidly becoming a has-been in the international pulp and paper industry. Our path out of these doldrums just may be innovation. This will require company research centers, university research centers, and the scientists to staff them. Time is running short.