The prospect is exciting and inspirational. But forecasts and good intentions, no matter how prestigious the authority, have an irritating way of under-performing. I spent sometime reading Part 1, then thinking about some of the statements. I agreed with some, but others provoked a more critical response.
I was excited by Part 1 of Agenda 2020 in the September issue of [PaperAge]. But I also have some reservations. So, as I know who the experts are, I comment with some trepidation, especially as I have not seen Part 2. So here goes.
Advancing the Forest Biorefinery
This is a thrilling concept. I understand it as “getting more from your log.” If this leads to fast-growing forest farms how will the eco-groups respond? Almost certainly with aggressive opposition which ambitious politicians, who have no interest in the industry, will embrace. Also, who will own and manage these forests? Many companies have sold off their forestlands to contractors in the hope of getting them off the balance sheet. But what if, despite technological advance, it will still be cheaper in 16 years' time for US companies to move their operations to forest farms in Brazil or Chile?
Technologically Advanced Workforce
How much will the new “knowledge worker” cost? Before you can educate your workforce you must get it through the mill gate. The industry has shed thousands of jobs and too many CEOs have been uncaring about their alleged asset-our workforce. Ken Patrick has written fearlessly and often on this subject. The paper industry is not sexy; it still has an image problem. It had a very poor one, but no longer. It has much to be proud of. But recruitment is falling, R&D has been cut, and the technical institutes are scratching around for new students. India, China and Indonesia have thousands of new knowledge workers, but many are inexpensive. If the US industry can't find enough knowledge workers at home, will it be compelled to hire its new workers from these countries?
Positively Impacting the Environment
Again the industry has a good record, but going green is expensive and the investment in it is never recovered by selling more paper.
Breakthrough Technologies
For me this means more and better for less. But the industry could be ambushed by rising oil and gas prices. They are already on the way up. Problems in Middle East and Russian oilfields and a massive Chinese oil import surge are pushing prices through $40 a barrel. This will also affect the cost of chemicals and other oil-based additives which the industry consumes. Many mills are self-sufficient in energy and even have a surplus which they sell to the local grid. But too many still have to buy their energy supplies.
Next Generation Fiber Recovery and Utilization
Some printing & writing grades made from recycled fiber (RF) are indistinguishable from virgin fiber grades. But every mill tells us that there is not enough RF for its needs. My neighborhood mill, the 240,000 tpy Aylesford Newsprint (an SCA/Mondi joint venture) has, for five years, been planning for a second paper machine, but there is not enough guaranteed RF available in the area. There are two problems: the slow response of the public and local authorities to engage with the culture of recovery and recycling. The second is the voracious demand for wastepaper from developing countries. In my visits to forest products terminals in European ports, I am always concerned to see ship-loads of wastepaper leaving those ports for Asian markets. Why can't it be kept at home and processed for the domestic market? On the US west coast, Chinese traders have a near-monopoly in the export of wastepaper across the Pacific. So before you can catch your wastepaper you must first find it.
Advancing the Wood Products Revolution
This is one goal with which I can't argue. In fact, the US concept of timber houses is becoming popular in Europe-it's eco-friendly, energy-efficient, good to look at and live in.
But where, in these six goals, is the money to fulfill them? I have noted the “potential net cashflow increase” forecast by the authors, but the industry has been losing money for years. It can't afford any new money at present or in the near future and the industry's machinery is getting older. So, in the 16 years' remaining how will the industry pay for Agenda 2020?
