| The purpose of our
website is to introduce you, the commercial purchaser, to our company. We seek to aid in
educating you on our industry, our company, and to help you purchase your corrugated
products and displays from us. As our century comes
to an end, we are faced with the issue of consolidation. The large are becoming larger --
and the smaller, are becoming more precious. This has been fueled by the merger of Stone
Container and Jefferson Smurfit Corp., the number one and number three linerboard and
carton producers in the world. The new company is an even larger number one. Not to feel
left out of this frenzy is the merger of International Paper and the linerboard mills and
corrugated carton plants of Union Camp Corp. More mergers are likely to occur.
As the field of competitors is narrowed, and unprofitable
linerboard mills and carton plants are closed, paper prices are sure to escalate. This
will surely be followed by escalating prices for the cartons and display their producing
plants.
On a more regional basis, say the New York Metropolitan
market place, we have seen numerous shutdowns of carton plants over the years. Lately, the
more notable include the shutdowns of Republic Container and Express Container Corp. These
two old and respected independents have had their sales and equipment acquired by National
Packaging Corp. National Packaging has also acquired the Trenton, NJ facility of Union
camp. Rumors are flying of even more independents closing down, as well as a local |
integrated
producer in Jersey City, NJ. It has not been all that long since International Paper
closed their Tallman, NY plant. Maybe four years. Well, sounds gloomy, But it is not
really. This activity is not indigenous to the paper
products industry, but is also happening in the oil, telecommunications, and automotive
industries. As a stock holder, this is great. As a customer, well, let's wait and see.
Official board markets, an industry publication report in
their 5/1/99 issue that box buyers are paying more for their cartons now an average of 8%
more. The reasons listed for this are:
Rising containerboard prices
Mill and box plant inventories are down
Planned downtime at mills
Linerboard exports to Asia are up
Mills are loosing money because their prices
are to low
Seems interesting, that these companies are loosing money,
yet their stock prices continue to rise.
As the paper box industry tries to return to more
profitable times, we should also note that the Americans and Canadians produce the best
box board paper and the best cartons in the world. Nowhere else on earth can our paper,
cartons, graphics, and services be surpassed. Maybe the best is worth a little more. |
