January/February 1990
Attendees at the recent Paper Stock Institute Conference confirmed that they are primed for the challenges ahead in the 1990s: environmental concerns, legislative and regulatory battles, and changes in the marketplace.
By Robert J. Garino
Robert J. Garino is director of commodities for the Institute of Scrap Recycling Industries, Washington, D.C.
With the book closed on the 1980s and another step taken toward a new century, the paper stock industry finds the 1990s bright and full of promise. This was the consensus at "PSI 1989--Looking Toward the Next Decade." More than 220 registered members and guests gathered in Palm Desert, California, for the Institute of Scrap Recycling Industries's (ISRI) Paper Stock Institute's 28th annual conference November 8-12. Keynote speaker Ken Phillips, purchasing manager at James River Corp., Richmond, Virginia, told conference delegates that PSI members are well-positioned for the '90s--a decade he and others envision to be the "most explosive yet" for recycled fibers.
Conference attendees were able to take a close look at specific issues during the nine committee meetings held over the five-day period. With paper stock exports running approximately 13 percent ahead of 1988 through the first three quarters of 1989, members of the Foreign Trade Committee were eager to discuss offshore opportunities as well as review problems associated with such trade. Of particular concern, noted Philip A. Alpert, National Fiber Supply Co., Chicago, were petitions recently filed with the Federal Maritime Commission that could potentially eliminate per-container rates, currently favored by virtually all paper stock exporters. Members also expressed apprehension over rapidly rising ocean rates.
The committee also discussed so-called U.S. government subsidies as regards old newspaper (ONP) currently being shipped to European ports from the United States. Nini Krever, Traders International Corp., North Palm Beach, Florida, reported that delegates at the recent Bureau International de la Recuperation meeting in Munich believe that U.S. exporters were, in fact, "dumping" ONP onto the European market. European brokers reported that certain U.S. packers were quoting municipalities scale prices at zero or negative dollars per ton of ONP, Krever recounted. These quotes were being interpreted by offshore competitors as a form of "subsidy" and, thus, unfair competition, she concluded. However, packers here noted that the ONP export prices quoted by PSI members accurately reflect current domestic market conditions, taking into account their operating costs. They rejected outright the notion that domestic brokers and/or packers were being subsidized by local or state governments.
New Guidelines Introduced
Paper stock specifications, used commercially for both domestic and export transactions, received particular attention at the conference. New guidelines were introduced and approved for ReMA Board of Directors' consideration for No. 1 bleached cup stock, No. 2 printed bleached cup stock, unprinted bleached sulfate plate stock, and printed bleached sulfate plate stock. In addition to other revisions that affected grades 38, 39, 40, and 41, Standards & Practices Committee Cochairmen John Gold, The Newark Group Recycled Fibers and North Shore Recycled Fibers, Salem, Massachusetts, and Steve Vento, Durbin Paper Stock Co., Inc., Miami, appointed a subcommittee to define a "super sorted" corrugated grade complementing the current grade 11 corrugated containers. A revised PSI Circular 1990 will be forthcoming, promised PSI Chairman Richard M. Foohey, Great Eastern Packing & Paper Stock Corp., East Weymouth, Massachusetts.
At the State and Local Liaison Committee meeting, members reviewed the proposed Newsprint Recycling Incentives Act, HR 3483, as well as its companion bill, S 1763.
Paper Stock: Quality Is Key
At the Production Committee meeting, chaired by Stanley Litman, Dal-Tex Waste Material Co., Dallas, packers and brokers discussed mutual concerns regarding paper stock quality. While most conceded that a "perfect" bale is impossible, the need for due diligence in inspecting both incoming waste paper and outgoing paper stock was emphasized by members. Delegates expressed dismay that the amount of contaminants--such as trash and plastic--in ONP and old corrugated containers (OCC) generally is underestimated, resulting in increased operating costs. Packers specifically cited municipality-run source separation programs as one area where waste paper quality has suffered. They noted that an increasing amount of waste material is now being landfilled at day's end.
Jack Rynbrand, Louis Padnos Iron & Metal Co., Holland, Michigan, advised members to work closely with paper stock consumers to minimize contamination and out-throws. "Quality must be monitored closely," warned Rynbrand. Litman stressed that packers should not be forced to work out of "fear" when bringing in waste paper. Members concurred that an ongoing education program emphasizing quality is an essential means to ensure quality. As one packer stated, "Education works both ways. Our reputation depends on the quality we ship to the mills--especially when markets move against us."
Mills also are focusing on quality, observed one mill representative. He said boxboard makers, for example, are being pressured by their customers to provide a consistent product. This attention to quality will, in turn, filter all the way back to the raw materials required to make boxboard, he concluded. Boxboard consuming companies are moving toward statistical process control as a method to ensure product consistency and quality, he noted, adding that that will ultimately affect all raw material suppliers.
Recycled Fiber Becomes Valuable Asset
Ken Phillips presented the keynote address during Friday's general session. Once, waste paper was thought of as a necessary evil. This was an almost universal perception, Phillips noted, citing even his own company, James River Corp. But now, he observed, waste paper is recognized as a valuable asset. He looked to the 1990s as an explosive decade for all users of recycled fiber. As one example, James River currently operates eight mills that consume 100-percent secondary fiber. Phillips revealed that two new plants are scheduled to be on stream in the early 1990s.
Reviewing fiber consumption, Phillips estimated that of the 221.6 million metric tons (mmt) of paper-making-fibers consumed worldwide in 1988, North America was the largest end user, accounting for 87.5 mmt, or 39.5 percent of the total. On a worldwide basis, Phillips noted, 31 percent of paper-making-fiber consumption could be traced to recycled fiber, thus "making it the largest single grade of furnish currently being consumed by the world's paper and paperboard mills”--larger than either bleached kraft pulp or mechanical pulp.
Phillips next turned to world de-inking capacity. The United States, he noted, last year accounted for 3.4 mmt of a total 11.7 mmt. Of this annual capacity, more than half--approximately 1.75 mmt--was earmarked solely for tissue production, followed by newsprint at 29 percent. This end-use breakdown differs markedly in comparison to Western Europe, Northern Europe, or Japan. For example, newsprint consumed the bulk of de-inking capacity outside the United States, accounting for 49 percent, 62 percent, and 67 percent, respectively, in Western Europe, Northern Europe, and Japan. It was Phillips's view that regulations and legislation in the United States will prove to be a catalyst in increasing the current newsprint share of de-inking capacity.
Phillips reminded listeners that management of solid waste is the most significant industry issue that will be dealt with over the next decade and, as a result, both supply and demand for recycled fiber will increase. World demand for paper and paperboard furniture also will continue to increase in the decade ahead but, he reasoned, the public sector will likely have to become accustomed to products less bright in shade than are currently available. Will the public accept such products? Phillips believes so, noting, however, that the mills will have to step up their own marketing efforts to convince consumers that products made from recycled fiber are of equivalent quality to those produced from virgin pulp. As for meeting the future demand for recycled fibers, Phillips concluded, with respect to paper stock supplies, "the United States is the Saudi Arabia of the waste paper market.
ISRI President Richard E. Abrams, B. Abrams & Sons Inc., Harrisburg, Pennsylvania, addressed the session, emphasizing the valuable contribution PSI members have made to the association. Abrams reviewed the work ReMA's Strategic Planning Committee has done and noted that it is developing strategies to fulfill the expectations of all ReMA members.
Abrams said the decade ahead promises to be "a period of great change" for the recycling industry. How ReMA responds, he concluded, "will determine how vital our trade association will be in the future."
New PSI officers elected at the meeting are: chairman, William A. Nielsen, Nielsen & Nielsen, Inc., Pomona, California; first vice chairman, Lloyd M. Shikany, U.S. Recycling Industries, Oakland, California; second vice chairman, John Gold; treasurer, Wayne DiCastri, Pioneer Fibers, Inc., Minneapolis; and secretary, Leonard Englander, Sunbright Waste Paper Co., Inc., Waco, Texas.•
Attendees at the recent Paper Stock Institute Conference confirmed that they are primed for the challenges ahead in the 1990s: environmental concerns, legislative and regulatory battles, and changes in the marketplace.