For some time now the US paper industry has faced the perplexing problem of doing business in what has been termed a “mature” market. To cope with this condition, companies have merged, let workers go, closed mills and idled machines. Although these measures have allowed US pulp and paper manufacturers to operate with improved efficiency and cost effectiveness, they are temporary fixes void of any real prospect of strong financial growth.
However, there are technologies being developed that lend promise to what could be an evolution of sort for the paper industry. On page 18 of this issue, you will find the first of a two-part article about Agenda 2020. The article is authored by Ben Thorp and Del Raymond. As many of our readers may know, Ben recently retired a few months ago as Agenda 2020 Deployment Director for Georgia-Pacific. Dr. Del Raymond is Director of Strategic Energy Alternatives at Weyerhaeuser and Chairman of AF&PA's Chief Technology Officers Agenda 2020 Committee.
Agenda 2020 began in 1994 when AF&PA signed a compact with the Department of Energy. The purpose of the partnership is to “significantly improve industry competitiveness and environmental performance by using the tools of technology.” Over the past ten years, the compact has grown in size, scope, and results. As the DOE says, “Agenda 2020 has taken on a life of its own.”
Agenda 2020 identifies six technology platforms: Advancing the Forest Bio-refinery, Technologically Advanced Workforce, Breakthrough Manufacturing Technologies, Positively Impacting the Environment, Wood Products Revolution, and Fiber Recovery and Utilization. Each of these platforms offer differing degrees of potential growth in terms of net cash flow for the industry and are identified on page 19.
According to the Thorp and Raymond, “Agenda 2020 has completed enough projects to believe that 25% can be developed and implemented. This will increase net cash flow by more than $8 billion annually. That is nearly double the average industry net cash flow for the past five years. Some estimates are much higher.”
Currently, the DOE Industrial Technologies Program is cost-sharing 48 R&D projects through its Forest Products Industry of the Future (IOF) program. But that's not all. In 2003, there were 147 Agenda 2020 projects in DOE/Biomass, DOE/ITP, USDA Forest Service/CRESSES, and the Forest Products Laboratory.
Funding for Agenda 2020 is essential. Funding comes from government agencies and participating companies. According to AF&PA, the level of financial commitment from participating companies has risen from about $6 million in 2000 to roughly $30 million in 2003. Government agencies have also earmarked substantially more money towards Agenda 2020, allocating about $12 million in 2000 versus over $31 million in 2003.
The technologies being explored-and deployed-in Agenda 2020 could very well lead the way to renewed growth in the US paper/forest products industry. As Frank Perkowski points out in his article in July/August PaperAge (pg. 30), “…growing businesses are more profitable, attract capital investment, fuel innovation, and provide more positive work environments for employees.”
Take a look at the Agenda 2020 article on page 18. Part 2 will come in October. To ensure Agenda 2020 remains a viable technology program, forest products companies can support the program by joining the program through AF&PA (www.afandpa.org), direct participation in project trials, helping to fund research projects, and aiding lobbying efforts to secure funding. You can also contact Ben Thorp by email at: bathorp@comcast.net
