The Forest Through the Trees
When larger companies merge it can provide an incentive for smaller companies to focus on servicing its customers more efficiently. "[Consolidation] affects all manufacturers," says Renée Yardley, director of marketing of Tembec Paperboard Group, another manufacturer of board and cover stock. "From our standpoint it provides us with an opportunity because bigger doesn't mean more responsive. We [as a result of other companies consolidating] are focusing on being more responsive to our customers."
Dependent upon consumer
Another challenge facing paper producers next year is working within the boundaries of the economy and what consumers do with their discretionary spending. Optimism abounds that the economy will finally recover from the recession.
"The biggest issue moving forward is dealing with the economic realities that our publishers are dealing with," says Dominic Maiorino, vice president of sales for publication papers with Domtar. "We're trying to strengthen our relationship with the customer-and the consumer's ability to buy one or two novels a month impacts that." The purchasing power of the average consumer will also affect the manufacturer's ability to increase prices, and Maiorino expects that price increases will go into effect in 2003. Rogers, for one, does not anticipate a jump in paper prices at MeadWestvaco. The company, she says, recently increased prices as did some of its competitors in anticipation of an economic rebound.
Still it is hard to say whether publishers will have to pay more for paper rolls in the coming year. David Grayson, president of American Fine Paper of Appleton, WI, says any increase will be small as the international community plays a part in keeping the lid on a large increase.
"There might be small increases in price as the economy improves, but I don't expect any huge increase because that would impact the profitability of the publishers," Grayson explains.