Rising again: like the New South, the Paper Recycling Conference & Trade Show boasted an energetic spirit from its New Orleans location - Paper Recycling Conference - Brief Article

Recycling Today, August, 2002 by Brian Taylor, DeAnne Toto

The Big Easy offers plenty of distractions for visitors, but attendees of the Paper Recycling Conference & Trade Show in New Orleans found plenty to keep their minds on business at the annual event.

The show, organized by Recycling Today publisher GIE Media Inc., Cleveland, and co-sponsored by the Paper Stock Institute (PSI) Chapter of the Institute of Scrap Recycling Industries Inc. (ISRI), Washington, was held June 23-25 at the Hyatt Regency in New Orleans.

Nearly 400 attendees traveled to New Orleans to hear from speakers at several lively sessions, as well as to shop for products and services offered by 40 exhibitors from companies serving the paper recycling industry.

In addition to sessions covering a variety of topics of interest to paper recyclers and their mill customers, the conference offered several networking and social opportunities. Among these was a golf outing at Eastover Country Club that was won by current PSI president Marty Davis of Midland Davis Group, Moline, Ill.

Exhibitors also hosted a beer festival in the Exhibit Hall on Monday evening that allowed attendees to sample from a variety of regional, domestic and international beers.

AN HONEST PROFIT

The fact that he was in the Big Easy was not lost on Steve Young of Allan Co., Baldwin Park, Calif., who was one of the keynote speakers at the 2002 conference.

Young told attendees that the title of his speech was "The Big Easy," in reference to the "free and easy money" that fueled the fraud and accounting irregularities that both overheated the economy and then caused it to grind to a halt.

The president of the large-tonnage recycling company did not hide his disdain for executives who burned through the money of investors in the accounting scandals that have rocked corporate America. "We need to send the [convicted executives] of these firms to jail, and not for six-to-12 months. We need to turn them upside down and shake their pockets clean before we send them to jail," Young stated.

Young made a prediction on Monday that turned out to be eerily accurate: "For a great many of our corporations today, the proper forms of disclosure do not exist. Watch out for more bond downgrades. These are signals that their businesses cannot support the debt load they are carrying." The next day, officers of telecommunications company WorldCom disclosed $3.8 billion in accounting inaccuracies from the previous five quarters.

Concurring with fellow keynote speaker Dr. James Burke of SP Newsprint, Atlanta, Young portrayed the difficulties experienced by the paper industry the past couple of years. "The Internet is stealing classified ads from the newspaper industry," he remarked. "The low prices of newsprint have made many mills non-cash flow positive."

Domestic producers of the corrugated and kraft grades have also suffered in the past two years, although "we believe this market will improve," says Young. "The picture going forward is bright, as domestic business will stabilize and improve."

What has kept recyclers busy even through the domestic doldrums has been the booming Chinese market, according to Young. China's per person consumption of paper products is on pace to more than triple from 1990 to 2005. In a nation of more than 1 billion people, that signifies an incredible increase in the forest products industry, he noted.

To meet the demand, new Chinese mills are being built, many of them consuming secondary fibers. China's recovered fiber imports surged from 900,000 tons in 1995 to 8 million tons.

Recyclers could still face a sluggish pricing market if U.S. mills continue to struggle, or if the collection of scrap paper in East Asia begins to increase to meet demand, Young warned. "But I think we're looking at a bright market for recovered fiber, and the demand from China helps make a marketplace that is not saturated with fiber."

Domestically, Young told attendees he does not see the trend toward single-stream processing being reversed, and in fact is hopeful that a national container recycling act can be introduced that will result in a national system to ensure that more containers are recycled.

In the meantime, "the profit streams of single-stream residential commodities cannot be ignored," says Young. Allan Co. was among the first companies to adopt single-stream processing, and the company has been able to do so while staying in the black.

WORDS OF WARNING

Dr. James Burke, CEO of SP Newsprint, Atlanta, did not mince words concerning the state of the publishing, printing and paper industries. "The print-on-paper publishing business is in a long-term decline in the U.S.," Burke stated.

Burke presented statistics to support his claim, including a leap in the number of U.S. paper mill closings each year since 1997. While in the early 1990s just two to five paper mills closed each year, since then the closings have come at a staggering pace: 12 in 1997, 16 in 1998, seven in 1999, 16 in 2000 and 21 mills in 2001.

In many industry segments, the mill capacity is not being replaced. "There's been only one newsprint machine built in the U.S. in the last 10 years," Burke stated. He also noted that since 1980, the number of newsprint mills in the U.S. has declined from 79 to 55.