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Pulp and paper’s nicotine


Week of 15 Oct 07


The culture in the pulp and paper industry has gone from one of an air of superiority: “If we make it they will buy it” to one of paranoia: “No one wants paper!” This transformation took only fifteen years.

A number of years ago, the cigarette industry lost a huge lawsuit involving payouts of billions of dollars over many years. The winners of this largess were the states. Yet, we did not hear any noise indicating that the cigarette industry was going to be bankrupted by this judgment, although I am sure this award far exceeded the net worth of all the tobacco companies combined. So, how did they and how are they paying? They simply raised the price of their product, resulting, in effect, in the most regressive tax ever seen in the United States and perhaps anywhere. Quite telling, the political party that wants to be known as the party of the downtrodden has not, to my knowledge, made so much as a whimper about this “tax.” The tobacco companies were able to pull off this transference of liability through price increases to their customers because of an interesting little chemical, nicotine, to which their customers are nearly hopelessly addicted. The addicted will pay almost anything for their drug.

I was sitting in a meeting the other day where the subject of bleaching came up. The comment was that the industry’s conversion to chlorine dioxide from elemental chlorine cost the US industry around $2.6 billion. This is considered a victory, assuming the other alternative was oxygen bleaching, estimated to require a capital investment of $16 billion. A famous person in our industry was attributed with saying, “We can’t afford many more victories like this one.”

I beg to differ. Anytime a mandate is equally distributed across an industry, it becomes absorbed by that industry, after perhaps some period of financial turmoil, and becomes the new mode of operation. The risk is when such a mandate causes the customer to look outside traditional sources for a competitive product to replace the original (the risk exists, of course, only if you are the one stuck making the original product—for alternatives, it is an opportunity). We have experienced this loss in many grades of communications papers, not so much because mandates raised our prices, but rather because much cheaper alternatives (mostly electronic in one form or another) came along and knocked our legs out from under us.

But, take heart. There is at least one grade of paper that is our equivalent of nicotine. A grade so vital, so necessary, so demanded by the consumer that at least for the time being one can not see its replacement ever possible. That grade is toilet paper.

Imagine, for instance, if we awakened tomorrow with a complete absence of toilet paper in our society. I suspect such a disaster would knock everything else off the front pages of the few remaining newspapers. Modern plumbing systems, enjoyed by most advanced countries, are inextricably linked to toilet paper. Health is inextricably linked to modern plumbing systems. It would be a catastrophe of enormous proportions. Toilet paper is truly our nicotine.

It was not always so, of course. Here in the United States, plumbing systems first came to the big cities, and not only for convenience—health was a huge issue. During the depression of the 1930’s, the government subsidized plumbing system installations in small towns. After World War II, indoor plumbing made major inroads into the rural areas. I am old enough to remember (and use) outhouses, often equipped with an old Sears and Roebuck catalog or a burlap sack full of corncobs. Heck, Sears doesn’t even have a catalog any longer, but if they did, their catalog or a couple of corncobs would quickly render modern plumbing useless—and I suspect a Brookstone or Sharper Image catalog would not be much better.

Yes, we have our nicotine. The challenge is to find ways to make other grades of paper take on nicotine like qualities. Packaging is close—from the corrugated container to the consumer blister-pack, packaging is another essential of modern life. What can we do in communications grades to make them so valuable? I was at a silent auction at a paper industry event last week where a mill that makes copier paper donated about a half a ton, all nicely packaged, just like you would find in an office supply store. They ended up giving it away—not exactly a nicotinesque experience.

Back to sanitary issues, diapers may be fluff pulp’s nicotine, but there is always the danger here that cloth ones would return if prices rose too high. The saving grace for diapers may be convenience, however.

This time of year, I often mention that seasonal changes, in both the Northern and Southern Hemispheres, result in changes in habits. Be careful and be safe as you either get out the snow blowers in Wisconsin or the lawnmowers in Australia.

Be safe and we will talk next week.

None

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