Competition from Canadian Imports
Imports of wood pulp and raw paper totaled $13 billion in 2003, mainly from Canada, which also exports about $2 billion of finished paper products to the US. What impact are imports having on the company's markets?

Growing Printing Demand
Retailers of consumer products are demanding more sophisticated printing capabilities from packaging suppliers. Does the company plan to invest in advanced printing capabilities?

Paper Sales, Inventories Up Sharply - Paper product sales are booming and paper producers are building inventories fast to meet orders. Wholesale paper and paper products sales were up almost 21 percent in November 2004 from 2003 numbers, to $7.16 billion. Inventories also grew quickly: wholesale inventories were up nearly 16 percent to $7.48 billion. The November inventory/sales' ratio was down slightly to 1.05 from 1.09 posted in 2003.

Newsprint Demand Continues Decline - Demand for newsprint continues to decline as newspapers shift content to online editions, find cheaper ways to print, and lose classified ad revenue to online job sites. Demand for US newsprint declined 1.5 percent during 2004 while inventories increased. Canadian producers face the same industry pressures as well as a strengthening Canadian dollar, hurting their ability to compete in the US.

Milk Carton’s Days Numbered - The trend toward plastic beverage containers challenges cardboard container manufacturers. Ever since a 2002 Dairy Council study found that children drank 18 percent more milk when the milk was packaged in plastic containers, schools have increasingly abandoned paper cartons. Plastic containers accounted for 82 percent of milk sold in the US in 2001, up from 15 percent 30 years ago. The use of plastic by schools mirrors overall beverage packaging trends.

Pulp Market Continues To Tighten - Pulp prices are up in North America and Europe. Pulp supplies are tightening due to mill closings and production cuts, while demand continues to increase. On average, prices were up $30 to approximately $680/metric ton with most increases occurring in January. Based on seasonal and other factors, the industry’s Pulp and Paper Report predicts pulp prices may continue to rise.

San Francisco Considers Grocery Bag Tax - San Francisco is considering imposing a 17 cent per bag fee, the amount the city estimates it costs to clean up and dispose of each bag that winds up as litter, on each paper or plastic bag used to hold groceries in the city. Instead of paper or plastic, the city would urge shoppers to use cloth bags like the ones commonly found in Europe. Bag taxes are already in place in several countries, including Ireland, Australia, and Taiwan. Plans are underway to try and introduce the tax statewide in California later in 2005.