Email Jim at jthompson@taii.com

It is Capital Projects Month at Paperitalo Publications. How timely this is this year.

For you youngsters, back in the 1980's, we would receive our new bound and printed copy of Post's or Lockwood's Mill Directory early in the new year. In the front would be a printed list of known capital projects announced and upcoming in the new year. It would usually be 15 to 30 items, just for North America.

Printed directories went away years ago and so did long annual lists of capital projects. Except the last two months of 2017 brought forth many North American announcements--more than we have seen in any time frame since the early 1990's. There has always been a steady diet of tissue machine projects--these are as regular as clockwork because the consumption of tissue is tightly tied to population growth. This spate of announcements is different--it is all about packaging grades--linerboard and medium. Some are new, some are wholesale replacements, some are rebuilds and some are conversions.

This is all being driven by the ever-increasing demand for rapid personal delivery, first pioneered by Amazon, now being adopted by anyone who wants to be relevant in the retail consumer goods market. The ubiquitous "cardboard box" is what makes this service possible.

Ironically, if we had not moved to performance based box specifications from basis weight specifications, the demand for new paperboard machines would be even higher. Driving down the weight of the box has stretched the paper supply over many more boxes.

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Save the date! The Pulp and Paper Industry Reliability and Maintenance conference, sponsored by IDCON and Andritz, will be held March 19-22, 2018 in Raleigh, North Carolina.

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Let's cut to the chase. Old Jim first commented on this in last month's "Strategic and Financial Arguments" newsletter (if you would like to receive this monthly newsletter, just drop me an email at jim.thompson@ipulpmedia.com with S&FA in the subject line). What is starting to happen is this: the supply of goods and services to complete these projects are moving towards a position where there is a shortage. We are already seeing this in engineering firm capacity. For the first time in decades, engineering firms are declining to bid. This, of course, is the front end of project development and thus makes sense that this would be the first place to feel the pressure.

It will build further down the line, stretching deliveries and pushing up prices. Those who buy quickly and lock in prices and suppliers' shop capacity will be winners, those who move slowly will pay more and see the delivery times stretch out. Some will get burned, for they will be thinking they can use the pricing and scheduling of recently completed projects as the benchmark for their new project.

We have not seen this problem for years and those managing projects today have never seen it. They will be in for a shock as budgets are blown and schedules shredded. If you are involved in a new machine project, pay attention to what suppliers are saying about their capacity to perform based on your needs.

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EMPLOYMENT OPPORTUNITY: We are a large automation company that has a line of consistency transmitters, sample valves and sheet break detectors that are marketed through a rep. network. We are seeking someone with a strong background in consistency control to facilitate start-ups, provide troubleshooting and technical advice. The individual should have experience in all major types of consistency measurement technologies (blade, rotary, microwave and optical). Knowledge of sheet break detection technology is desirable as well. Willingness to travel to paper production facilities across the US is a must.

Travel & Living Expenses to be reimbursed along with an agreed upon daily per diem rate.

For more information, please contact Jim Thompson at: jthompson@taii.com Ph. 678-206-6010 Cell: 404-822-3412

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A bit of a story to close us out for the week. About 35 years ago I was involved in the rebuild of papermachine. We were sourcing equipment all over Europe. My trips to the workshops were to check on quality, schedule and so forth. Cleaners were being sourced in Sweden and were behind schedule. I made a long trek to the north woods to the workshop. They were working five days a week. I asked them if they could work Saturdays to get back on schedule. Nope--could not get anyone to work beyond the standard workweek. Why? The incremental income tax rate was so high that no one would give up their free time for more money.

If you start sourcing equipment from outside your home country, be aware that local culture, customs, and, yes, tax rates, may affect your ability to get what you want, when you want it.

For safety this week, when you buy equipment, buy it with all the possible safety devices already built in. Some suppliers may have safety equipment options with which you are not familiar. Make sure in your specification exercise, you allow them to show these to you--then buy them.

Be safe and we will talk next week.
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It is advertising sales season, and we have produced the best media kit we have ever put together. Ask me for a copy today and put my feet to the fire--make me explain it to you. You can get one by calling me on my cell phone--404-822-3412--or emailing me at jthompson@taii.com. As we have been saying, if you like our innovative ways of presenting the news about the pulp and paper industry, I'll suggest you do the following. If you are in a mill and like what you see here, please tell your suppliers what you like to read and who you would like to see them support with their advertising budgets. If you are a supplier, please be aware (we know) we are first in news, (we think) we have the largest audience in the pulp and paper industry worldwide and (we know) we have the lowest advertising costs.

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Jim Thompson is back again...with a new book on a taboo subject: the personalities in the pulp & paper industry. Jim has written in the past on many subjects based on his four plus decades in the worldwide pulp and paper industry. This new book is packed full of information valuable to the senior member of the industry as well as the recent entrant. A must for every pulp and paper library.

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Nip Impressions has been honored for Editorial Excellence by winning a Tabbie Award!

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