~ by Andrew Fennell, Friesens VP of Finance
We’re happy to say that 2024 has been more stable for the book paper industry in North America, compared to the last two years. Supply of book paper has been very stable and lead times have been normalized. Paper continues to be relatively easy to purchase and most shipments have been on time through to the end of Q3.
PAPER MILLS & INDUSTRY NEWS
While there has been good stability with the North American mills that supply book paper this year, one mill has suspended operations. As of early August, Willamette Falls Paper Company in West Linn, Oregon, announced they would be actively seeking capital or trying to arrange for the sale of substantially all of the company’s assets and business operations. Indications and suspicions are that the mill won’t be able to attract additional capital or sell the assets, and therefore the mill may be permanently closed. Willamette Falls produces Sonoma and Capistrano coated paper that Friesens used sparingly, so this doesn’t affect our paper supply or availability.
In other industry news, International Paper announced they would be laying off 650 people:
International Paper is undergoing a transformational journey to become a stronger, more profitable sustainable packaging solutions company. A critical step in this journey is to organize our teams and resources to create the most value for customers and shareholders. As a result, we are reorganizing our corporate overhead structure.
While this change at International Paper doesn’t affect the supply of book paper, it is an indicator that some segments of the North American paper industry are not thriving.
LEAD TIMES & PAPER PRICING
Lead times for both coated and uncoated book paper have been quite good in the last few months, with the exception of the Sustana (Rolland) mill in Quebec that has had paper machine problems and downtime. We have worked closely with the paper merchant and the mill to expedite paper shipments when necessary, but there have been a number of incidents in which late deliveries were simply unresolvable. We expect the mill to recover by late November and get back on track.
We were fortunate to virtually unaffected by the US East Coast port strike. While it was short-lived, it was disruptive and might have been a challenging issue for our cover board supplier.
Additionally, we were fortunate to be virtually unaffected by the significant damage and disruption caused by the hurricanes that affected the southeast US. Our primary glue supplier is working to return to full operation, but we don’t expect any major supply issues despite the devastation caused.
EUDR
Many of our customers have been asking about EUDR (European Union Deforestation Regulation). According to the European Commission, under EUDR:
…any operator or trader who places commodities [including books] on the EU market…must be able to prove that the products do not originate from recently deforested land or have contributed to forest degradation.
EUDR has been perceived by many North American paper mills as a significant challenge, and there have been calls to rescind or at least postpone the implementation date. As of October 16, the European Council has agreed to back the European Commission’s proposal to postpone implementation of EUDR by one year.
We will continue working with paper mills and industry groups over the next twelve months to develop processes that will enable all parties to be in compliance with EUDR by the end of 2025. To learn more, CLICK HERE.
