G-P Won't Reopen or Sell Copy Paper Operations in Camas, Washington
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The Portland Tribune (Portland, Ore., USA) reported this past week (Aug. 16, 2018) that Georgia-Pacific (G-P) headquartered in Atlanta, Ga., will not re-open pulp and copy paper-making operations in Camas, Wash. which shut down in May of this year, according to Kristi Ward, spokeswoman for the mill across the Columbia River from Portland, Ore.
There have been calls to reopen regional mills because of China's decision to refuse imports of U.S. recycled paper, boosting demand for P&W / copy paper in the Western U.S. Several Asian buyers have expressed interest but have been turned down both by G-P and by WestRock (in the case of its Newberg mill). G-P's move didn't shock those following the U.S. paper industry, which has engaged in a string of mill closures that improved companies' bottom lines.
"This is what's happening in the industry," said Greg Pallesen, president of the Portland-based Association of Western Pulp and Paper Workers union. "You can make more money by closing machines. You restrict supply, you drive the price up."
G-P does not agree with this assessment. Industry leaders see the current market as being influenced primarily by what are likely short-term situations that would only temporarily favor re-opening production of P&W paper in the U.S.
"There have been changes in the marketplace recently," Ward said. "But that hasn't changed the fact that demand for printing paper has been declining over a long period of time. We made the decision to close it because producing printing paper at Camas wasn't profitable for the long-term."
It's likely that once the market stabilizes from the situation with China, the power of this specific issue driving demand will go down at which point the American owners of regional mills would probably become more comfortable and open to selling shuttered sites to businesses that intend to re-purpose former P&W paper mills, or possibly even re-opening themselves or to buyers for production of the same type of papers. But this will likely only happen at some future date when their demand would not hinge on a temporary uptick driven by a Chinese decision that itself could still possibly be reversed relatively soon.
The current interested buyers from Asia for both G-P and WestRock operations in the region have expressed interest in near immediate re-opening of the mills, but only to serve what could be a short-term situation not only with China, but with what could be a temporary over-surplus of recycled raw materials from around the region that would be depleted to some degree by ongoing reopened operations re-tooled to use recycled paper as a feedstock.
In doing so, re-opened copy paper operations would also indeed drive down the value of paper and hurt U.S. companies still invested in the industry seeking to use profits to invest in the future making more profitable grades of paper, such as for packaging, which is predicted to be a long-term surging sector within the industry.
The current interested buyers from Asia for both G-P and WestRock operations in the region have expressed interest in near immediate re-opening of the mills, but only to serve what could be a short-term situation not only with China, but with what could be a temporary over-surplus of recycled raw materials from around the region that would be depleted to some degree by ongoing reopened operations re-tooled to use recycled paper as a feedstock.
In doing so, re-opened copy paper operations would also indeed drive down the value of paper and hurt U.S. companies still invested in the industry seeking to use profits to invest in the future making more profitable grades of paper, such as for packaging, which is predicted to be a long-term surging sector within the industry.
It's by no means certain that the sites will remain closed / unused permanently because of their owners refusing to sell the operations in the here and now, but likely that they will no longer produce the same grades of paper they have in the past, if not converting or expanding alternative operations at sites entirely so as to produce paperboard, linerboard, and containerboard for use in packaging; or in the case of G-P Camas, a possible full use of the site which is still remaining partially opened in its current state to produce paper towels.
One international paper industry source quoted by the Tribune expressed his belief that while the companies who own the plants may be currently pursing short-term profits, a long-term strategy of shutting down plants and still modern, working machinery permanently, and univerally scrapping them as opposed to selling them, is an obvious "road to death" indicating that there will be plans to re-purpose at least some of the region's paper mill sites, or sell them at a future date, though not in the current market climate just to serve P&W paper to China.
The G-P Camas plant building at the site that produced pulp for the No. 20 paper machine will be demolished and the machinery will be disassembled, according to Ward.
