The pulp and paper industry is moving into 2019, and there have been a lot of interesting developments to emerge from field. Here’s an overview of what’s happening in the pulp and paper industry and how it could impact businesses moving forward.
Demand for Hardwood Fiber Drops While Demand for Softwood Rises
Demand for hardwood fiber has been in steady decline over the past decade as consumer trends are shifting away from end products made from hardwood – and toward products made from softwood fiber.
A variety of sub-trends is contributing to the overall movement. Demand for newsprint, for example, has been in steady decline over the past 20 years that matches the decline of print news organizations. Demand for boxboard and liquid packaging from hardwood fiber have also decreased. In aggregate, demand has decreased by 25 percent over the past decade, something a recent Forest2Market report has determined to be nothing less than a serious structural shift.
Softwood fiber, however, has grown–particularly from pulp and biomass. Buyers are looking for more biomass pellets and fluff pulp, like the kind that goes into absorbent products. Cardboard boxes have become in more demand as well, which has helped. Indeed, over the past five years, at least three pulp mills in the South have switched from hardwood fiber to softwood fiber, and more are considering making that move.
Fortunately, lumber production in the South has recovered to where it was before the 2008 recession. New investments have poured into creating and upgrading sawmills, which will see capacity increase by as much as 0.44 million tons a year.
New Lumber Production Facility Finished in Alabama
One example of increased investment in lumber production can now be found in Talladega, Alabama in the form of a $100 million lumber plant that employees 130 workers in 300,000 square feet of production space.
The plant is just one part of the estimated $1.2 billion that the corporation has spent developing its business segments in Alabama over the past five years. Its 130 employees will become members of a workforce that numbers over 2,300 state-based workers.
Under current operational plans, the plant will ship out around 50 truckloads of lumber during every work day, from a production capacity of 230 million board feet of lumber each year (soon to grow to 300 million board feet). The University of Alabama estimates that building the plant benefited the city and Talladega County by over $26 million.