Email Jim at jim.thompson@ipulpmedia.com

For years I have said if you have an energy asset, keep it for the political world of what is in favor in energy constantly changes. The same flexibility is needed in purchasing.

Here in the United States, we have seen a long term off shoring of critical pulp and paper industry equipment. We are at the point where a complete paper machine built in the USA is no longer offered. The ones that are offered are from overseas suppliers (many of which are my friends) and even those suppliers source from many other countries than their home base.

It appears this may change quickly. The new world of tariffs may turn what was previously well developed and stable procurement relationships upside down. New sources from new locations my show up on your doorstep. By way of example, I know of some very good machine components that are made in Egypt. What is our tariff status with Egypt? Can we get components made there with the quality and service we expect from elsewhere? Who knows? What will it take to vet such sources?

Turned around, what if a supplier ends up on our shores, one whom we trust from elsewhere? What will be there ability to quickly conform to our laws and regulations?

As an example, decades ago, we were having delivery problems with a Scandinavian supplier. I thought, "No problem, I'll just go to their factory and pound on them." I did. I asked why they weren't working overtime. It was explained to me that their personal income tax rate was 75%, no one would work overtime. Showed what I knew.

As a procurement department serving you mill, the Spring of 2025 may be the season you learned all sorts of new things about purchasing and procurement.

Some sources with which you have become comfortable may no longer be practical.

Some new sources, even domestically to you, may become available but need thorough vetting.

Older suppliers, wanting to shut down facilities that are no longer economically practical, just may have a "fire sale" on some items you need. Do you buy them?

Many of our familiar ways of doing business are out the window. New ways will need to be investigated and learned in order for you to protect the assets of your employer.

Be safe and we will talk next week.

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