I was bemused last week when one of the analysts in our industry expressed surprise at the low price AbitibiBowater’s Snowflake, Arizona, newsprint mill is fetching. It is something under USD 500 per annual ton.

This points out, once again, that assets are only worth their productive potential. If one had the same investment in physical assets in tissue production or linerboard production, the result would be very different. However, in the rapidly declining world of newsprint, they are not worth much.

This seems to be a lesson that must be taught again and again. There is a reason buggy whip manufacturers are scarce -— it is called market size.