Memorial Day

IP carefully works its large system to cut costs,  manage deep demand drop; 1Q sales fall by an average of $10 million/day

In a stark  reality for industry players, International Paper’s (IP) sales declined $10 million/day and $878 million in the first quarter from massive machine downtime yet the firm also generated net earnings of $257 million that were saved by $330 million in black liquor alternative fuel tax credit money from the US government.

The company also reported free cash flow of $666 million in the quarter and paid off debt in the quarter by $600 million. 

Still the performance from the world’s largest paper and board producer by capacity typified the drastic global economic downturn’s impact on paper and board demand.

Domtar, North America’s largest uncoated freesheet (UFS) producer and one of the largest market pulp      producers in North America, reported today an 11.1% drop in sales in the first quarter vs the fourth quarter.     IP’s drop was 13.4%

IP said it basically ran its two largest units —containerboard and UFS papers -- at about 70% of      capacity in the quarter, eliminating 1,074 million tons of capacity, 76,000 tons more than in the fourth quarter.

Also, the 1,074 million tons of downtime excludes another 249,000 tons of production permanently or indefinitely shut at its Valliant, OK, Franklin, VA, and Bastrop, LA, mills.  Domtar in the quarter took 260,000 tons of downtime, with 185,000 tons of paper downtime.

 

Excerpt from PPI PULP&PAPER WEEK/MAY 1, 2009

News Release                       Fraser Papers

Fraser Paper Announces Temporary Shutdown of Paper Machine

Toronto, ON (May 1, 2009) - (“Fraser Papers” or the “Company”) (TSX:FPS)  Announced Today it plans to curtail production of commodity groundwood paper grades on  paper machine #6 at its paper mill in  Madawaska, Maine for an indefinite period starting the week of May 4, 2009. 

Fraser Papers will continue operating the remaining five paper machines in Madawaska.  In 2008, paper machine #6 produced 69,000 tons of groundwood papers.

Excerpt—May 1, 2009

 

All women become like their mothers.  That is their tragedy. 

No man does.  That's his. 

~Oscar Wilde, The Importance of Being Earnest, 1895 ~

Happy Birthday

 

Dominick Patafio — 7th

 

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