By Jim Thompson

 

Recent discussions in the industry brought forward this topic once again.   The short answer is that in the long run, the viability of the existing mills in these grades is not good. They were built for an era when 42# linerboard dominated the industry and when recycled grades were not well accepted. Today, all of this has changed.

 

Lighter weights, rapid turnaround, low inventories and the acceptance of light weight liner and medium means the given that the old virgin mills can run no matter what is not necessarily true. Mills that are close to end markets, can make the lightweight grades and are not saddled with legacy infrastructure that is of little value will struggle to compete in the long term.

 

Most of the mills of which we are speaking here were built in the 1950's to 1970's. They are already forty-five to sixty years old. Even with excellent maintenance, infrastructure on the fringes frays. For you this means you may want to take a bit of a deeper dive into the condition of discrete components of the fleet in companies you follow.

Have a comment?  Email me at jthompson@taii.com.