As we all know, printed materials have decreased dramatically over the past 10 years. In our world of Internet information, e-mail and Kindle, the old standbys of snail mail, books, newspapers and magazines are becoming a thing of the past. Analysts predict the demand for print materials will fall at least another 18 percent by 2024.
In response, paper mills throughout North America have regrouped. Mill towns have lost over one hundred paper mills in the last ten years due to consolidation and the mills are rethinking their futures and the products they make.
An article published in 2000 entitled “Will Printers Get Pinched?” speculated that paper mill consolidation would have a disastrous effect on printing companies.
So where is the print industry today? Ross Gillespie, Purchasing Manager for American Financial Printing, Inc., talked about how the consolidation of paper mills has affected AFPI. Gillespie doesn’t see any major changes in pricing because of the consolidation of paper mills.
Because the majority of AFPI’s purchases are in commodity grade paper, Gillespie can still get all of the paper he needs and can get most paper on demand.
One exception is lightweight financial paper. Gillespie says, “There is a seasonal fluctuation in lightweight financial paper because it is highly in demand during proxy season. Only a couple of mills run it in the United States and I need to have orders in hand 8 weeks out for those.”
“Specialty papers in small quantities are also harder to get because suppliers aren’t keeping them in stock. For small amounts the wait is 3-4 days.”
According to Resource Information Systems (RISI), an economic forecasting firm that tracks the international forest products industry, the merger and acquisition activity among paper companies has actually had a positive impact on the printing industry.
“There is no question that there has been a significant impact,” contends John Maine, vice president of Bedford, MA-based RISI. “Consolidation has created simplification and efficiency in the industry. It has brought a focus on cost reduction and competition.”
It would seem that paper manufacturer consolidation as a response to lower print demand is working well for printing companies. The decrease in demand was slow enough and the number of companies making paper in North America was large enough that as demand fell, they could respond. Companies were able to close a sufficient number of plants so that there was neither a glut in paper nor a major shortage of supply. It was an orderly contraction of the market with supply and demand remaining in a good balance.