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Page No.
INTRODUCTION AND STJI4NARY
CHPkPTER
- MAR CIARACTERISTICS OF THE INDUSTRY
The Market ...... l.a ae o * e * * e l 1 Yianufac-turing Processes .a e a .. e a. a e 2'
- pulp o e * * * oa o * * o* ae a o . a4 .e 2 - Paper . a e ...... e . .o . .4 . O * P 5 Integration C O . .O . O . . . e * . . .e e e . 5 RaW aterials, Water and Power . . e * o a G 7
Techlology . . 6 aG * a e . . .s *. a o a e 11
II - ECONOMIECS OF PULP AND PAPER 1%r,,AKIHrG
Elemerxbs in Production Costs e . r a. . . . . * 17 -:Investment Costs .e ...... 18 - W1aterials, Water and Pow^Ser a . a o a o 21 - Labor . . . a o a& * 0 0 * 0e 0 4 0 9 314 E3co10noyrdes of Scal .C .o . 0o c . .o e 0 0 ela C 383
III - ORPLD WYTlS IN eov C)o RODUCTIOW A T,NMDrTFLADE
Consumptioni by Regions and Countries . 0 . * . * . . . 44
- Woodpulp 4 G a e b 9 * e I 0 0 0 .a 0 r 0 c 4 144
- Paper 0 9 0 0 .0 4 * 0 .0 0 6 e 0 a0 o 4 4 C 146 Producrtion by Re i or and Count-rirs 0 *0 . .0 * 4 49 oOCipulp 0 .0 . . * * * * S 49 - Papor 0 e a 0 * ao 9 0 e 51 Internationc)1 Trade . I0 0* * * * 0 9o 0 0 52 Per Cl):mit.a Consmption o-Pap3 * * * * G e G O 56 Intoe -tionazl Prices of Pulp and Pap= Prices * e* 9 58
APPEIT)TCI~S
A Statistical Tables 68 B Wtorld',iclo PPulp arn P>aper Consuru t;:ion by RCg:Lori, 1 9198-1J. 5 II PoodpzT1pProcudu ctionwil' C1rL1.1,Pt.ionr1 . . . .* .. . . 4 II: Papcer P:roxiuciorl L'n .J Coinri uim.it:i; ,on * e o * t * C * v f*
C The KiL't, P1l pi.p I.Y4c;cw^o *.* oe4 0 9 0eL * 86$ 836
B1BL1OC2RAPWll.' . 9 Ti- TABLES
PaeNo.
6 1. Classification and Yields of Pulping Processes
- Physical Inputs Per Air-Dried Metric Ton 2. Kraft Process 8 of Softwood Pulp 9 3. Wood Consumption per ton of Pulp in Selected Countries
Average Water Requirements for the Production of Pulp and 4. 10 Paper Products 11 5. Energy Consu;Qption - kIJh per Ton of Pulp
Developing Countries Fixed Investment Costs for Mills of 6. 20 25 to 200 Tons Daily Capacity
Sample - Investment Costs for Pulp and Paper Mills 7. World-wide 22 of 25 to 750 Tons Daily Capacity Share of Capibal Costs in Total Production Cost for Various 8. 25 TypOs of IL;L1s of 100 Tons Daily Capacity Wood Consvm1-L-pt-iton Per Ton of Pulp ton of dry wood per 9. Pulp 26 ton of 90,5 pulp
Average Age of Felling of Mvlain Softwood and HIardvood Species 10 27 Used for Pulping Prices in the United States, by Selected Species, 11. Pulpwood 28 1950-67 Pulpwood Prices, Delivered at Mill, in 1960 U.S.$ 12. Estimated 30 per ton of bone dry wood Average Prices of Major Inputs for the Production 13. Es-timated 32 of Pulp and Paper Products, 1966
14. Share of Matcrials and Power, Steam and Water in Total 33 Production Costs Labor Cost for Into,g-rtlcd and Nond-In,c-ratod Pulp 1. Direct 36 & Paper M4ills -iii
TABT2S
Page 1To1
45 16. Woodpulp Consumption by Areas, 1954i55 to 1964-65 48 17. Paper Conisumption by Areas, 1954-55 to 1964-65 50 18. Wboodpulp Production by Areas, 1954-55 and 1964-65 52 19. P,. ier Production by Areas 1954-55 and 1964-65 53 20. Comparison of WJorld Production and Ex-port Trade - 1913 to 1965 21. Regional Demand and Supply Balances of IWoodpulp and Paper,p 1954-55 and 1964-65 56 22. Per Capita Consumiption of Paper, 1964-65 from 23. Average Value Per Ton of United States Pulp Iq?pozts Canada, 1953-65
24. Domestic anld Thiport Prices of woodpiilp in the United States 60 and the UniUted KLn;>cii (US$ per iintric ton), 1;Iay-Jun-e 1968 of Q ; 25. United States - Avorage Vholesale Prices Per IMetric Ton 61 Selected Paper Products, 1964-163
CAPHS
23 I. Investment Costs for Various T-ypos of Integrated IYdlls 24. II. Investiment Costs for Various Types of Non-.Integrated hills and Paper I4illsq 50 to 200 Tons Daily Ca.-pacity III. Pulp 41 (Uniit hInestinent Required)
IV. Pulp anid Paper Mis. 50 to 200 Tons Daily Capacity (Direct Unit THanu"La-CILw'-in.g Cost s) 42
V. Pulp c'1 Paper lls, 50 to 200 Tcn-is Daily C,ripacity 43 (Total Unit Prlcductio- Costs) iv-
GRAPS
Page Ndo
Per Capita VI. ItRD - Relationship between Paper Consunaption 1965 62 1964-65 anad Gross National Product Per Capita. between VII. NORTH AFMIICA & W1ESTERN EUROPE - Relationship Capita 1964-65 and Gross National Paper Consumption Per 63 Product Per Capitba, 1965
A11HRICA - Relationship between Paper Consumption VIII. LATIN 1965 64 Per Capita 1964- 65 and G-ross lational Product Per Capita, between Paper Consumption Per Capita IX. AFRICA - Relationship 65 1964-65 and Gross National Product Per Capita, 1965 betwyeen Paper ConsumTption Per Capita Y. ASIA Relationsh.ip 66 1964-65 and Gross National Product Per Capita, 1965
XI. 1ORID (Regional Comparison) Relationship between Paper Per Capita 1964-65 and Gross National Product Consumption 67 Per Capita, 1965 -v
IDTRODUCTIOIN AhlKD SUM'2'4AR Y
1. The object of this stuady is bo provide background information on the pulp and paper industry to facilitate an understanding of the ecollomic sspects which are relevant to establishment or expansion of the industry in developing counitries.
2. Chapter I review.s the major characteristics of the industry starting wzith a brief discussion of the nature of the demand for paper products followed by a review of the: main manufacturing processes and the importance of integrated mills producing concurrently both pulp and paper products. Chapter I also reviews the physical requiremerits o rcaw materials, water and power as well as techLnological changes in the industry.
3. Production of pulp and pap2rr requires large quantities of wood, chemicals, water and electricituy. Wood requirements represent the Iliaii item in terms -f both quantity and cost. Wood consumption per toni of pulp mlay vary i.-rn 25.ito 6 cubic meters of solid wood wnithout bark, depending on. the type of pulp produced.
4. TeclbnoloCical chair,o in t-he past t,wo decades has progresseda rapidly. Production is bcco-uitn incrc;easingly autonat-ed.-r- ::Ž2trj inl mmutl:lc:ing processes have been concc-ntrated in the use of soA:oo,v wiieb. are the species prodoiriThating in the C.evolopsd countriur- ic.uo:i c; on the ot'hor hand,, wfhichi prelodir nato in the cdr;,.;alopifg countries, are little used in pulpinf-, mainly because of theiLr in-feri.or physical :\L. uh in the prescntD state of the ar-ts., which m.-akes for greater costs co,_pite lower uniti pricCs.
5. Chapter II analyzcs imnv lrti;-e,nt costs, and thce omporti;ecf economies of scale., witht special referenrce to developing countlses. Production of pulp and paper has one of the highest capital-output ratios found in the industriael sector. Investm.,.nt costs per unit of ouLitpib are therefore high and they are also quite vuriable. Total investment per daily ton 1/ for a new 400 tons per day bIleached softwood sulphate pulp mill in NoFth Anmerica may va-wZr betwoen $87,500 ca-d $13'7.,500. 2/ Total invcstment, for a similar mill of 600 tons rer d;.ay would be in-the ordcnt' of $775,000 to $116,600 per ton daidL.r Capac:- f.
1/ Totoal invovL;trTic,-nt clof-in;- ao mii-.l Pc:.,;' Lnr,icncc,;i,t durinig conrttruc- tion, stL%rt-1zp CYvpon1.n2o financial Cl.T') L'Lo and worlklng capital. Thve,t.nu por daily ton equals total iaa-t .crt divrided by daily capacityO 2/ Thev total &t'mn:bs ar' ,in$35 *iIL' an-'. "$55 l,Udllion- vi-
6. Regarding integrated operations, total investment (defined as above) for a 400 tons per day linerboard mill could vary betwieen $75,000 and $125,000 per ton daily capacity. An integrated ndill of 100 tons per day of fine papers (wood-free wiriting and printing papers) requires a total in.restment froa $10 millIon to $30 million,, depe-nding upon the degree of integration with pulping facilities.
7. Total fixed investnmnt per daily ton (at 1960 prices) in a 100 tons per day mill operating in a developing country fluctuates between $135,000 for non-integrated unbleached chermical pulp, and $235,o00 -for irtegrated bleached paper.
8. Pulpwood is the principal material used in pulp and paper raw making anid accounts for approximately 80 per cent of total fibrous materials consumption. Some developing countries possess raw imaterials which are competitive with those prevailing in developed countries. This advantage, however, is often more than offset by higher prices for other inputs and diseconomies of small-scale operations. 9. Other inputs needed in pulp and paper maaling are: sodium sulphate, limestone, saltu, sodi=u chlorate, alumtnum sulphate, liquid chlorine, caustic soda, sulphuric acid, sulphur, fuel oil, water, arid electric power. Prices of these inputs are, as a rule, substantially higher in developing than developed countries. It is not unusual to find prices equivalent to more than tiiiee those in developed coulntries-
10, Economies of scale in the production of pulp anrd paper are very important. Th1e main reason is that as the mill size i.rc-eases, overhead, certain manufacturing costs, ice.. depreciation, administratuion, labor, etc., tend to rise only very wlod.evately and consequently these costs per unit of output show a maxked reductiorn. On the other hand, consumption of materials,, electricit-y and fuel, tenddwo vary proportion- ately to output and are little affected by mill size. Of coUrse, one can also achieve economies in the purchase of materials in large quanitities. Moreover, automation and power-operated equipment is mainly designed for large mills and it is less economical when used in small-scale mills. l4ost mills operating in developing countries are too small to benefit from the advantages of economies of scale and normally require a protected market.
11. Economies of scale in pulp ead paper apply differently to the main categories of l;>oducts. The first category includes mass type two food. products such as pulp., container board, newsprint, Kr-aft paper and board. By modern standlards mills in this group., competitbi-ve, in interna- tional marImts, have daily capacities normally varying betiween 500 and 900 tons. Hlieever, Eraopoc,an mill ls ith daily capacities of aboLt 200 tons are able to prosper because of -their close location to the markets and a certain degree of protection. 12. The second category of products., called "specialty papers", is comiosed of special printing an-d writing paper (excluding newsprint), tissues and o-ther fine papers, Ina this group, economies of scale are also important but maill sizes are much smaller. In the United States manr plants have been operatiing econiomically with daily outputs of about 100 ton. In Europe the capacities are even smaller, in tbhe range of 25 to 100 tons per day. In this category,, technological know-how and quality control may be as important as scale.
13e The minimum economic size would, of course, vary from country to country depeniding upon the competitiveness of local materials and other related factors. In a study of the pulp and paper industr-y in Latin America it was concl:uded that T"if the hypothetical plants were to compete in world markets the 50-ton plantls would operate at a loss, the 100-ton plants would have unsatisfac-tory earnings., and the 200-ton plants would be at best marginally attractive." 1/ 1L4. Chapter III deals w1ith the growfth and struc -re of world consumption, production and trade. From l954-55 to lP64_65 world conswription of woodpulp and of paper anid paper products grew at an average annual rate of close to 6 per cent. In most developing areas the rates of growth were substantially higher. 15. IWorld consumption of woodpulp as well as paper is heavily concentrated in tbhe industrialized countries which in 196 4I-6. accounted for 95 per cent: and 88 per cent respectively of the world total. 16. Production in developing areas has been growing substantially faster than in developed countries, This rapid grow-^th in developing coulntries has tended to reduce somewhat their dependence on imports. In absollute berms, hoxever, they still import a substantial portionl of bheir total consumption requirements.
17. Pulp rand paper are valuable and irmp,ortantl products tra-ed in international markets, World exports of these products during 1955-65 have shown little variation- from an average of 16-17 per cent of total world production4 , Exports of pulp and paper products in 1965 amounited to $4e4 billion or about 2.3 per .ent of total world exports. Thports from developing countries were very small, amounting to only $90 million, as compared with their pr.incipal exports:. $9.8 billion for petroleum,n $2.2 billi.on for coffee, $1.)4 for sugar, $1.3 billion for copper, and $1.2 bhillion. for rubber. 18. World exports are heavily concentrated in five developed countries . Canad 19. urope excluding Scandinavia has become increasinigly dependent on imports. Woodpulp imports rose from about 2.8 million tons ;in 1950-52 to 7.6 million tons in 1964-65 although their share in consumption remained at about 50 per cent in both periods. Imports of paper in the sane period rose froni 0L4 millon tbons to 4.6 million tons and increased significantly their share in consumption from 4Lper cent in 1950-52 to 16 per cent in 1964-6l5 This growirng market offers opportunities for developing countries able to sell at competitive prices. 20. The world's average annual per capita consumption of paper is now more than 31 ilogramas but it varies substantially from country to Country. Consumption per capita in the United States was 222 kilograms in 1964-65, in West Germany 100 kilograms,, and below 2 kilogram in miost developing countries with less than $100 per capita. 1/ 21. The relationship betw^Xeen paper consumption and gross national product show-s a relatively lhigh degree of correlation between the two variables. The calculated equations for separate world regions indicate that factors other than income play a more important role in determining paper consumption in developing countries than in developed countries. The elasticities of demand for paper in each area are all elastic with values ranging fromQ 1.29 to L.66e 22. The last section of Chapter !II deals with international prices of pulp and paper products in some of the major producing and importiDg countriese Initernational trade in pulp and paper products is very compe,titio.J Firms competing in this market opcrate large mills., high.ly aiul.toniii.,X'. ' and niold.ic miaximum use of economies of scale in produc- from tion. Since 1-53 avarC,r.e prices of Unitied States pulp irm-orts Canadla show a gradual dmcinu:mid trenid in real terms. On the other haid in in the United States mrost prices of major paper products, measure- conistaLt dollars, show a sliCl:,ht deccli.L frorm 1964 to 1966 and a slow but conltinuouls rise from 1966 *to l0966 of 23. Total direct lending by the Bank Group to this indus'try as June 30, 1969 was as follows: Amount Per cent Distribution Organization 1Eillions US$ Arica Asa Euope W. Hemisphere IBRD /a 133.7 /c 3 82 15 IFC 7E 33.1 6 25 6 63 /a ConrcLt-ianits net of cancellations, refundings A.,nd terminations. /b Opcra.tional investyrn-nts and standby anrl underw, riting comn.:itments. /c clud. the corrospondiligr portions of nElulti-purpocc. .los., Sourco Antiya-l lioport. 1-I969. 1/ AoxCO15L': 1964-.65 r 2p of lo!), co-untrir:L;C CHIPUER I 1vAJOR CIIARACTRISTICS OF TH3 IMDUSTRY 1. The modern pulp and paper industry has its origins in the paper machine irnvented by Louis Robert in 1799 and developed by Henry and Sealy Fourdrinier in 1804. This invention revalutionized the production of paper from a slow manual process into a fast and continuous mechanical process. The industry has since made tremendous progress particularly in production techniques anid to some extent in the use of new raw materials. Wlood is still, however, the major and most irmportanVt raw material. Water requirements are also important and usually large. Technological changes are increasing the minimum economic size of 1=oduc- tion and reducinig the amount of labor per unit of output. Integration of production is gaining in importance to the detriment of non-l4ntegrated operations. The market for paper has been rapidly expanding and its products are employed for a wide variety of industrial and cultural uses. The MaWket 2. The demand for paper products is closely correlated Iwith the level of per ca,pita income. Other factors influencing paper consU, tion aro the habits and customs of the society, income distribution, and level of literacy. 3. Some two-thirds of the pactr produced and consumed in tlhe. vrorld is used in packaging and construction, i .e,, wrea. pn- papers of var: ou, typos;, ba-r, sacks, sheathing paper., asbestos paper, etc. The remaining one-third is consumed in writing andl printing. 4. Paper products can be divided into t.wo broad but distinrct catogories; mass papers and specialty papers. Competitive production of mass papers requires large-scale production units wille specialty papers can be economically produced in signLficantly smaller mills. Indcustrial papers used in packaging and construction, i.e., Kraft wrapping papers, shipping sack paper,, containier board, 1/ anLd foodboard, pertain to the catego-ry of mass papers. Probably -the most important in this catcgoryt5Z is newsprint, the lowest priced cultural paper, xwhich is o±inly consumeod in the publication of newspapers, e_xcept for s,i1all Dook quc-nt-.itl(es -,50sed for pritintgvire cheap iiiagazincs,, books and. catalogues. pap I/ Contai01ncr boar'd includces linfr.vbuoarcl d1Cid corrugatiLngrr mediumi an:d is main3,y use(l for uorru,patcAL. bo.,s -2 also classified as mass papers. The relative importance of newsprint and paperboard, the two raain categories of mass products, in total world paper production in 1965 was as followss Item Thousand metric tons Per Cent Newsprint 169838 16$5 Paperboard 330342 32$5 Other Papers 45. 971 45l0 Fiberboard 6,112 6.0 Total 102 ,263 100.0 5- Specialty papers are composed of special industrial papers and speo 'al cultural papers. Some of the major products included Ui this category are: absorbent paper, sanitary paper (towels, tissues, napkins, etc.) special printing and wri:ting papers (excluding newsprint) cigarette paper, high quality tlhin paper, air mail paper, off-machine coated paper, etc. lanufacturing Processes 6. Pulp and paper manufactuire can be divided into three broad stages: harvesting and delivery of pulpwYood at the mill, colnversion of pulpwqood into pulpt, and transformation of pulp inito paper. 7. Most pulpwood is delivered at the mill in the forn of bolts or logs. Pulpwood is also delivered in the form of chips, slabs and other mill waste, in small amounts in relationi to world supply but in large proportion in. areas of heavy saimailling. Transportation of wood logs from the forest to the mill is mainly done by means of trucks, railway, or a combination of both. Transportation by water, all or part of the way., may also be adequate and is generally th3 lowest cost. mode oif transport. - Pulp 8, Woodpulp was first manufactured around 1845 by a si-mple process consisting of disintegrating softwood by pressing the wood against a revolving stone grinli-ig wheel in the pre sence of cooling water. Originally this method produced a low grade pulp of weak fibers wth:ich would soon turn yellow. This basic production method has been greatly i.mproved though it remains the backbone of mechanical pulp malking. The pulp so produced is lmowin as groundw.ood or mechmaiical pulp. 9. Groundwood, because of the weakancss of its short fiber '".d rapid deterioration to liglit exposure., is used mainly with adrrdx-t,n'e-; of chemical pulp in papers which Lre ziot expected to last long periods of time Itb is used mainly in the .-cianizfcture of new-sprint,' catalogues, and certaizn bypes of boo's,, magar Li and othor p1:i1iLbing papers wiclllh require a low-priced product. -3 - in 1851, marked the 10. The soda pulping process, introduced chemical pulp. In this process the woodchips aypearance of the first of pressure in a solution of caustic soda. Because are cooked under almost disappeared streng-th which it yields, this process has the low fiber however, is of wood pulp. The soda pulpinlg process, in the manmfacture residues in less used in the manufacture of pulp from agr-ir:culture widely product is considered developed countries where quality of the fi:nal availability of raw materials. Furthermore, less important th:l. the low, and it input requirements in this process are relatively chemical small-scale mills. is more suitable than other processes for was first sulphite process (also known. as the acid process) 11. The used today. It in the United States in 1867 anid is still initroduced an acid solution of of coolkng the wood chips under pressure in consists chermical reaction dissolves sulfurous acid and calcium bisulphite. The component; and weakens the walls of the cells the ligdni or non-cellulose pulp of relatively up the fibers. This process produces a chemical making widely- used by older mills low strength. The sulplhte process is still a preference for the sulphate or Kraft process. while new mills have strength is due to pollution problems and low fiber This preference introduced in the process of the sulphite process. However, iLprovements large-scale sulphite polp mills to eliminate now make it possible in fiber the pollution problems as well a&- to increase to a large extent magnesium the use of soluble bases such as sodium a-nd strenEgth tlhrouph is no longer cheical recovery. Although this process which permlt still used for and its use is declining,; sulplhite pulp is predominant papers, and also for types of printing, writing and wrapping certain rayon and acetate fibres. dissolving grades used mainlr to manufacture or Kraft process (also imow-n as the alkaline 12& The sulphate proces . recently developed and widely used chlemical process) is the most wmith th?' basically a modification of tho old soda process This method is of the cau',;4tic of socldiul sulplhide to soften the harsh action addition in the procc5:s is The main chemical used for make-up of loscies soda, The process was first sodium sulphateo, comrLonly called salt calke of cooking tlhe wood chips developed in Germany in 1879 and consists of sodium l,hydroxide (caustic soda) under pressure in an alka.ine solution all This process lends itself to pulping of alnost and sodium sulphide. The type of vegetable raw matcrials for pulp making. types of fibrous stronger thmi any fibers produced by the Kraft method are substanitially be used in practically all kinds of paper products. other pulps and can the weight 45 per cent (42 bleachedl, 48 unbleachod) of The yield is about including up to 90 per cent of cookling chemicals, not of wood, amid used in m:kir. the cheliTcals, may be recovered, Thle chem.nic: ls bleochinc otheri:j `e the process pulp must be continually recovered for re-use; and ecconuclcal, too costly. This pocess, although efficient wouLld be of its high unqi-t suited for large produrction units boc.au.s;o is better anR-d eqcy:viL noedfor invaostriant requ:ir.r in-tso. The 1I.c o-rabLcin-q C. making Kraft pulp are describcd iii Appernd-ix - S -....----.... -.---,- ...--.- .-.-.. neutral sulphite 13. Another process recently developed is the (NsSC). In this method the wood chips are only semi-chemical process in deligiified and then the softenied chips are defibrated partially exclusively refiners. The I1SSC process is employed almost> mchanical medium because for pulping short fiber wxoods to manufactuLire corrugabing product which is a of its high yield and the stiffness of the final primary quality requiJrement. process used 14. Pulp yields differ very wldely depending on the and chemi-imechanical (smiall additions of cherimicals) (Table 1). Yiecha.iLcal the pulp yields from 80 to 98 per cent (unbleached) of processes have opposite side of but the quality o.L the pulp is low grade. On the wood grade pulp but their thle scale, chemical processes give the highest ranging from 30 to 65 per cent Semi-chemical Yields are much smaller and combinations of:mechanical and cheemica-l processes processes are yields ralnge on the relative weight of these two factors their depen-ding are for to 90 per cent. Generally, the lower yields quoted from 50 pulp. bleached pulp and the higher ones for munbleached of production 15. Finally, there exisbs a certain numnber other mainlyr modifications of the five basic processes methods which are the Today there is a trend tow,ard modifications -in mentioned above. of the basic processes to adapt them to the special. characterist,ics raw materials used. countries where mills are normally small it is 16. In develoning, size the manufacturing process best suited for the important- to select factors The selection, however, should also be related to of the mill. T-i;e pulping as rawv materials used and types of paper prociiiced. such as suggested by one processes best suiLted for small-scale operations, source, 1/ are the following in order of preference:* a) Conventional (using rotating stonc1s) grouridwood (meclhnaical puIJr: 1;J.n )). b) Chendi-groundwood (variation of NKSISC process)j particular.ly in combination wJitbh conventionlal groundwoood, c) Semi-chenical wiithoult recovery (variation of NISSC process). process). d) Acid pulp rmills iwithout recovery (sulphite Paper Product,ion'a 1/ PeRe Sru'dwc.,119 .!"S]n.-ScaleIndclustrial Pulp anid (United ilati.c:ms,.'n,jkok l$)G2 ), e) Senm-chemical with recovery (variation of NSSC process), particularly in combination with alkaline pulp mills. f) Alkaline pulp mills with recovt:ry (Kraft process) g) Acid pulp mills with recovery (sulphite process). of 17. The manufacturing processes require basiical3.y the same type equipment for a small mill as for a large mill. This is a rmajor reason why small mills in developing countries are high-cost producers, and their exdstence, therefore, depends on a captive local market. A small mill cannot produce as cheaply as a large mill of the same type. Produc- tion of mass papers such as neewsprint, linerboard and bag papers is not well suited to small mills. It is feasible to manufacture pulp for newsprint (groundwood) in small-scale mills but to produce the newsprint paper economically requires a large-scale mill. - Paper 18. The process of converting pulp into paper is very sim7ilar for all grades of paper. The pulp is prepared in a beater or refiner so that it will mat or felt well. A: this point there is added., if needed, color, loading, size and alua. Loading witih clay or similar fillers makes a more opaque alnd smooth printing surface while t-he size and alum. malk paper resis-tant to iwater or ink. The pulp is then fed into a paper machine. The two types of paper machines most commonly used are the Fourdrinier and the cylinder machilne. The Fourdrinier is by far the most iximortant and is specially well suited for the production of ground.ood priirbings, newrsprint, book and writing papers. wrapping papers, tissues and other types of papers. The Fourdrinier machine is also frequently to manufacture lightweight paparboard. On the other hand, the used building cylinider irmachine is i;rilnly employed to maike heavTy papce-bo,-rzd -a,nd pi:ulS. paper an-d to a lessex exteont for titssue, wrapping and absorbent 19. Significant technical improvementls have taken place over ti.rne in the working speed, automation and size of paper machines. In relatively large mills each paper machinie is today an enormous piece of equipment of measuring several hundred feet long and capable of producing a sheet newsprint up to thirty feet wide. Integration 20. Il-tegrabed mills manuf'acture all their pulp requircm,ernts as wc-ll as paper. On thc otiher hand, non-initegrated mills are those plrocIuciLj,~ asnd selling pulp only or those which purCha:;o pulp arld colvert it into paper. Some mills are only partially integrated, i .e., thicy purchac3n, patrt of a their total pulp requirements, and it is at ti:!meis difficult to drawt clear-cut distinction bco-t;xrCucni anl inLce'a'ted anld a non-integr3ted opcr-.tion. Table 1 Classificationl and Yields of Pliri Processes Pulp yiel,) Chemical Mechanical % un- Cateor Process treatment treatmeht bleacFe- Mechanical Bolts Groundwood, cold None Grinder 93-9P 93-98 I " hot None Grinder Chips Bauerite, Sprout-Waildron None or bleach Refiner 93-93 93-93 II Isogrand Nora or bleach Defibrator Asplund Steam Defibrator 92-95 ex- it Mason Steam Steam pansion 80-90 Semi-cheiical Bolts Grounftood, stemned Steam Grinder 8o9c " Decker Acid sulfite Grinder it Fish Kraft Grinder i Cherigroundwood Neutral sulfite Grinder . 80- Clips Water hydrolysis Steam Refiner 7o-92 i High yield sulfiite Acid sulfite Re finer 6o-9. it High yield bisulfite Bisulfite Refiner 60o9or it High yield kraft Kraft* Refiner 5$,-D Neuoral sulfite, NSSC Neutral sulfite Refiner 65,33 8C ,. I Cold cau8tic Alkali Refinor Straw Mechanochemical Alkali or kraft* Hydrapulper 5VJ,' Chemical One-stage Acid sulfite (Sulfite) Acid sulfite Onptn e (straw) Celdecor (Pomilio) Alkali anid clAooi 3 . * Sodium h,.ydroxide and sulflde. Svon AA. IihIiqoUn, Proco,er., p. 2311 -7- in A very substantial proportion of total wroodpulp consumed 21. and paper mills. the developed countries is produced in integrated pulp of integration are: a) lack of need to transport The major advantages and materials which reduces the cost of converting pulp into paper rawi for technical facilitates mass-production techniques and b) avoidance, reasons, of the expense of lapping 1/ or drying the pulp. is much less important in the production of specialty 22. Integration they such as writing paper and high-grade tissues, mainly because papers would be unecono- require a large variety of types and grades of pulp which be economically mic to produce in small quantities. Specialty papers can in mills of much smaller size than in the case of mass products. produced cost of advantages of integration may well be offset by the higher The to the market transporting paper rather than pulp; proximity of the mill better service to makes for lower marketing costs, prompt deliveries and customers. trend toward 23. However, on the whole, there has been an increasing operated by integration. in some counitries pulp and paper mills are forest companies. The large degree of vertical intiegration integrated it possible from logging timber to marketing of the final products makes affords at the same to reap the full benefi-ts of economies of scale. It the production time a continuous an-d smooth suLpply of logs to meet requirements of the mill. Raw 3Aaterials, Water and PoTwer of wood, 24. The pulp and paper industry requires large quantities electric pover and water. Table 2 shows physical quantities chemicals, by the Kraft required per tonl of softwood pulp (bleached and unbleached) These quantities are based on actual experience of a process. 2/ major large pulp mill (abo-t 350 tons daily capa6ity) in a relativeJ;r 20 per cent American producer and are, on the average, approximately Latin The relative higher than for a mill operating in a developed courntry. discussed in importance of the input-s in total production costs is Chap-ter II. both 25. Wood requirements represent the main item in terms of Cheap wood is an essential factor for compettitive quantity anid cost. to 75 pulp since it normalJy represenats from 50 per cent production of 3, wood per cent of maimufacturring costs of pulp. As shown in Table per ton of pulp may vary from about 2.5 to almost 6 cubic consumzption produced. meters of solid wTood withoout bark, depending on the type of pulp 1/ lapping is the process of do-tiatering the pulp. fould be 2/ The quantities of chemicals renulircd for pulpin- har-diwoods about the swno. Table 2 Unit Fer Ton of Softwood~., Item Unit unb)eached Kraft h Pulpwood (solid) /a m3/ASTW 5 .O0 5*5 Chemaicals 55 Saltcake Kg/ADS 50 65 Limestone "I 32 Salt It - 38 0.03 Mercury . Graphite e - 0 ., 14ll Sulplrunic Acid 8 Sulphur " - 77 Chlorinc - Caustic Soda 4- Fuel Oil "17 525 Electric Power 9IH/ADItr 540 1,260 Water m3 /ADNT 100 230 m3 for /a Comparable requirements using hardwood would be 4aO unbleached Kraft pulp and 4.5 m3 for bleached Kraft. Sourcec Feasibility study for a Latin American pulp mill. -9- Table 3 Wood Consumption per ton of Pulp in Selected Countries Other countries, Sweden Finland Norway Germany estimated average Product XTT (T) 0 (17026) - F Cubic meter (solid) without bark per ton of pulp HIechanical pulp 2.50 2.45 2.55 2.45 2.50 SuTlhate pulp Unlbleached 4.70 4a50 5eO5 n.a. 4.l0 Bleached 5.10 4.90 n.a. n.a. 4.50 Sulphite Ulnbleached 4I50 4.45 4.65 3.95 4.20 Bleached S.10 4 95 5e15 4.45 4.70 Di-solving pulp 5.70 5.70 5s85 5.15 5.30 Source: Prospects for Latin American Pulp and Paper E.xportsto Oversexas. United Nations., Latin American Symnposium on. ndustrial DeveLopmen.t ST/'ECLA/-Conf. 23/L.,4.0, January 1966. 26. A relatively small mill by initernational standards of 200 tons 1/ daily capacity would require from. 500 to almost 1,200 cubic meters solid wood without barlk pr day7. This lar,e quanti-ty implies that mills should norimally be loccated near their source of wTood suippi:- unless transport costs are unusually favorable. Good traansport facilities at reasornable costb both to bring the raw mzaterials to the mill as well as for marketing the final products are extremely important for the competitiveness of the firmv. These two aspects of transport costs must be compared in deciding on mill location. In recent years there has been a large number of innovations in logging, transportation anld mechanical han-dling. Logging and transport operations would also norlmlly provide more employment than the mill itself. 27, Cheinicals, although not as important as wood requirements in terms of cost, are osscintial inrpLt-. Dikcept for mechanical pulp, wood chips are chemically cooked in digesters, in order to produce the pulp. The 1/ All toiuing' fguros show-!n in this stuudy are in the. metric system. unless stated othe rwise- - 10 - calcium. major cooldng chemicals used are: caustic soda, sodiumi salphide, conventional bisulJphite., arnd sodium sulphite, either acid or neutraal. In bleaching processes, the main chemicals used are: chlorine, caustic or sodium hypochlorite, and chlorine dioxide. The relative soda, calcium of importance of each chemical and total chemical requirements per ton fluctuate considerably depending on the type of product manufactured. output eighty Thus production of chemical pulp, wJhich accounted for more than per cent of world woodpulp production in 1965, requires substantial of chemicals, both for cooking and bleaching. It may be estimated amounts 200 that for every 1,000 tons of bleached pulp there are required fromn to 500 tons of chemicals, of which the cooking chemicals are largely recovered. although 28. Water is an essential input required in large quantities requirements may vary considerably according to the manufacturing its mill process and operating conditions (see Table 4). "IApulp anid paper with a daily pulping capacity of 1,000 tons will have a water treatment plant capable of serving a city of 1400,000; and, in all, for steam, of such a cooking, washing, drying and cooling, the total water needs 1,000,000,11 1/ An mill a-:e the same as those of a city of approximately ample supply of water of good quality all the year round is particularly types important in the production of bleached chemical pulp and certain of specialty papers. Table 4 Average Water Requirements for the Production of Pul and Paer Products Cubic 1Neters CiLbic Meters Product per Ton of Product per Toil of Paper Non-integrated mnills Pulp or Paper Integrrated hills Pulp or Unbleached sulphate 100 Mech-aniical pulp 30 Bleached sulphate 180 Chemical groundwood 40 Unbleached NiSSC pulp 100 Bleached NSSC Pulp 160 Newsprint 150 Paperboard 140 Specialty Papers 160 Source: Sandwell and Company Limitied. Georria, 1/ "Water", Southern Pulpijood Conservation Association, Atlanta, (USA), 1968. the production 29. Electricity is also a major essential input in Energy consumption per ton of pulp is high and may of pulp and paper. kW1h from 250 k.Wh for semi-chemical neutral sulphite to 1,100-L,600 vary are specially for mechanical pulp (see Table 5). 1/ Energy requirements high for the production of mechalnical pulp -d new-isprint. Table 5 Energy ConLsumption -kVh per Ton of Pulp ptp Fe Of Pull klfl-k 1,600 Mechanical spruce 1,100 - Grinding , spruce 1,100 - 1,500 Mechanical, aspen 1,200 Groundwood screenings, spruce 800 6o0 Grinding chemigroundwood, hardwiood Semi-chemical cold caustic, birch-maple 500 Seni-cheimical neutral sulphite, birch 400 Semi-chemical acid sulphite, spruce 380 Semi-chemical Kraft, softwood 330 Semi-chemnical Kraft , hardwood 300 Semi-chemical water hydrolysis, aspen 300 250 Semi-chemnical ineutral sulphite,, birch Defibrator, spruce 200 Source: Adapted from Sven A. Rydholm, Pulping Processes, p. 332. Technology of new 30. The industry has made substantial progress in the use of pulp and in the introduction of more efficient production sources of Kraft equipi-ncit. Special progress has been made in the productionl a waste sawdust and sawmiill iwaste. Until recently sawxdust was pulp from on product. Technological research, how,ever, has been concentrated hardwJoods. the study of softwxoods and little has been done regardin-g types of pulp 1/ Electric power and fuel oil reqniremnntrs for various nnd Crltcwi21- products are also given in Prc rarrilnrn Dita arid papor L/)&Lj9 for lthe Pulp and Paper TncLdm-Jt.r ECLAI. aiiii;i~, Gliji5 P. 10. - 12 - at a 31. Since World War II technological change has progressed rapid pace. "Mechanized handling of pulpwood and paper rolls, continuous pulp processing, greater instrumentation, and semni-chemical pulp pro- cessing, reduce unit requirements for labor, capital, materials and fuel. "t 1/ use 32. Production is becoming increasingly automated through the Innovations have required larger amounits of funds for of computers. moderni- research and developmenlt. New advanced technology has required larger zation and exansion of capacity in old mills or construction of mills. Technological change is continuously pushing up the minimum economic size of mills which is made possible by expanding markets. is Because of these developments, today the pulp and paper industry characterized by a highly mechanized technology. 33. Technological devrelopmrnt can be analyzed under the four followinlg subheadings: a) Continuous Automatic Production There has been a strong trend toward eLimination of production in batches. Today- with the use of mechanical handling equipment and continuous pulping systems, production of pulp and paper has been converted into a smooth, fast and continuous process. These trends have tended to reduce the amount of labor per unit of output. b) rinproved Instrumonts - Introduction of electronic devices has perrLitted continuous production of large quanatiLies of pulp and paper of high quality and stanidard consistency. LIntroduction of the maagne-tic flow meter in the 19501.s has been extrQmely useful to measure and control the flow of pulp througLh the manufracturing process. The use of central ccnt16rol sta.tions equippad with aautomatic an,-.d electronlic equipment has made it possible for a handful of workers to control the entire manufacturing operation. Simi- larly, the use of radioisotope gauges on paper mnachlines has provided a cointinuous check on the weight of the papers and thickness of coatings being produced. c) Use of Raw 1i,aterials - The industry has made significant a7dvances in the use of new low-cost sources of raw materials. Thlere has been a trenid toward the adaptation of the mainufa£.cturing process to bthe use of a larger number of wood -.pecies. But improvoemlents in manufac- turing proe,sses have becn heavily- concenitrated in the use of softtwoods wiThich are the species predominating in the developed countries. "IIMore than ninety per cent of the (world) -oftuood statnds are, located in thoe U1.3.32. and Paper 1/ B. Wleinberg, ,Lp ic of Techno3dcal Clhangoe in the Pullp IfasingLoi, Idr;trr, (U,&. J)poL North America and Scandinavia, wihereas the greatest hardwood resources are found in Southern Asia." 1/ In temrperate zones hardwoods account for about 60-70 per cent of total forest resources and up to 100 per cent in tropical countries. Besides, a substantial proportion of the forest resources in developing countries are cormposed of mnixed tropical hardwoods without predominance of one single tree specie. Although hardwoods represent about half of the world's forests under exploitation, these species are little used for pulping. MHore than 80 per cent of world pulp production is obtained from softwoods, about 1 per cent from hardwoods and some 5 per cent from agricultural residues and grasses. However, recent improvements in equipment design and operational methods have made possible a greater use of hardwoods for pulping. Although certa;n pulping systems have been adapted to a variety of low-cost t'emperate hardwoods, the technical advancement in the pulping of mixed tropical hardwoods has been slow. This state of the arts does not favor developrment of the forest resources available in many developing countries. Production of pulp from mixed tropical forests is normally much more costly than froia softwioods, despite -the fact that the cost of softw-ood is generally fro-m 20 per cenlt to 50 per cent higher than that of hardwoods. Recent experiments carried out by the Forestry DivLsion of the U.S. Department of Agr,..culture, never- theless, show good prospects for a greater u;se of hard- woods for pulp a-ldntg. M.tiLreSl3 of hardwoods have been used for several years in one rnill in Brazil (of 200 tons daily capacity) and another in Colombia (of 100 tons daily capacity). This has been facilibated by the existence of tropical woods of simrilar density. The large variety of hardwood trees anld significant differences their densities are still an important drawback to in also expanding their use. Some research in this area is in progress in other developing countries. The length of softwood fibres is, in the most commonly used species, from 2 to 5 mm. as compared with a fibre lengbth for %Iiardl-oodsof only 1 to 2 imn. Publii,hers, 1/ Sven A. RydholJm, Pulp-ing Proc ssc.. (IHew York: Intorscience 1965) p. 8. With present technical knowledge, long fibres give a better quality product where strength is required. On the other hand, hardwood fibers are utilized in high proportions in some printing and writing papers because they impart good formation and surface characteristics. Abaca is another long fibre raw material available in certain developing countries which, however, would require substantially more technical research before it could become competitive with other materials. Small quantities of specialty papers from abaca are already produced in the United States (lL,OO0 tons), Japan (8,000 tons) and the United Kingdom (5,000 tons). 1/ Other raw materials used in relatively small quantities are sawimill residues (such as sawdust, slabs, and edgings) and bagasse, bamboo, esparto and rice. In this area there is also a need for more research and development in order to achieve competitive prices. Although the share of agricultural residues and grasses in total world pulp production is small (only some 5 per cent) these raw materials are used in large quanti- ties in certain areas where they are readily available. Another important problem in bhe use of bagasse, bamboo and other agricultural grasses is thatl quantity requirements for a mill of an economic size are rela- tively large and in developing countries it has often proved difficult to obtain an adequate supply to maintain the mill operating at full capacity. Also, the wide dispersion of the sources of supply at times results .n such high transport costs that it becomnes more economic to operate on the basis of imported pulp or previously inaccessible indigenous wood resources. d) Research and Development - Technological changes haave been the s of increasing awareness of the importance of research and development, although the industry still lags behinrd other industries in expenditures for research and developmrenrt as a percentage of sales. 2/ 1/ Estimated outputs in 1967. 2/ In the United States the cost of company-financed research and devel- opment (R nz D) in 1960 for paper and allied products was 0.7 per centr of sales as compared with 3.6 per cent for chemicals and allied products and 1.0 per centb for petroleum refining and extraction. The average for all industries was 1.8 per cent-of sales. If one adds expenditures on R & D financed by the Federal Government, the per- contita, for paper and alLied products remains the same, while for chemicals it becomes 14.2, for petrolouma 1.1 and foi all industries 4.3 (Nestor E. Terleclgyi assisted by H.J. Halper, Research and Jev r1l.opmz nt: lIbt Cocvrth avid Ccminosition, !iatiorial lndutztrial Conferenice Boar(d, f-iw York, 1-93, * d ad '9)9 - 15 - is now spenading substantial amounts of The indus-try of furnds in search for new products and new iways manlufacturing today's products. A new field which could become important in the future is the combina- of paper with other products, mainly plastics tion in metals. Some advances have already been made and become the production of new paper products wihich have competitors of textiles, i.e., towels for industri'al and household use, pillow¢ cases., tablecloths, slippers, dresses, etc. 4arket research also plays an important role and has contributed to the expansion of sales. -16- CHAPTER II ECONOMICS OF PULP AND PAPER NAKING 1. The pulp and paper industry has one of the highest capital- output ratios found in the industrial sector. Investment costs have a very substantial effect on total production costs. Feasibility studies for pulp and paper mills in underdeveloped areas should., in dealing with the economic aspects, include in particular a detailed analysis of the market, and of all investment costs. In order to avoid future hardships, for the project as well as for the economy in general, it is particularly important to investigate thoroughly the items included in the investment and whether the proposed mill would require expendi- tures on additional facilities, i.e., roads, housing, electricity supply, forestry operations, etc., which could be as large as the investment in the mill itself. 2. A new mill in an underdeveloped region requires a very coxrpe- tent team of managers and supervisors to cope successfully with the large variety of operational problems which are likely to arise. On the other hand, the shortage of skilled labor in underdeveloped areas does not seem to be an overriding obstacle to the successful operation of a nmill. Local labor can usually be trained in the plant. 3. The major factors which account for the high costs of pulp and paper products in many developing counitlries are, apart from lack of proper management,, the small size of the local marlet and high prices of domestic inputs. Establishment of manly small-sized mills has been encouraged by protection policies fa-voring industrializa-ion with inadequate concern for costbs, 4. Woodpulp is the most important raw material, Price and quality of wood have a heavy weight in the competitiveness of the final produc-ts. The industry also employs a variety of chemicals that in somI1e processes may represent an imiportant, item of the cost structure. Pulp and paper making also requires large quantities of watier although water requirements represent a minor portioni of total production costs. Labor costs tend to vary significantly dependina on iwage rates and fringe benefits, productivity and type of operation. Ai a general rule the more specialized the products anid the more varied the product mi.x, the higher the labor cos-ts per unit of output. The lowest labor cos,t,s correspond to large sin,le line mills where automiiation can be max-imized. InnGovationS, anid toC]chnological chGt,lng cs have substantially reduced the numnber of oarployco:C.- to operatue a given mi:ll. Lower wage ratcs -17- do not in developing countlries, because of lowyer labor productivity, than in mills necessarily entail lower wage costs per unit of output in industrialized countries. Mills in developing countries operating in industrial generally employ a relatively larger work force than those countries. very important. 6. Economies of scale in pulp and paper making are costs, i.e., As the size of the mill increases, indirect manufacturing administration, etc., rLse relatively slow4ly and total depreciation, costs unit costs tend to decline. Investment costs as well as operating for comparable per unit of output for small-scale mills are higher than mills. This is because as the output capacity of equipment large-scale reason its cost tends to increase much less markedly. Another rises for large mills, is that automated equipment although mainly developed for small mills. Most mills operating in developing is equally necessary of are too small to benefit from the advantages of economies counltries as a result and normally require a protected market. Furthermore, scale in the economies of infrastructure, supply, and other imnperfections found countries, most mills in these counitries opexate of less developed mills fewer days in the year and produce less outlput than comparable in industrial countries. success- A fewT mills in certain developing regions are competing 7. mainly on very fully in international markets. This success is based domestic raw material resources, and the existence of a competitive than those captive local market where prices are substantially higher quoted for their ports. 1/ Elements in Production Costs to country 8. Variations in costs of production from country the market, axnd result from differences in factor endowment, size of differences in technologry and managerieiet techniques. Particularly important elements are: a) Cost of site preparation and related aspects such as access to tranisportation facil:ities, housing and water supply. or b) Source of electric power, whether self-generated purchased (the trend is tow-yard purchasing from public enterprises). for c) Cost of eff.luent control. In general, the cost iniland1 mills is higher than for mills on tideniatc- which often discharge effluent untreated into the sea. countrie.s 1/ In the case of Chile, a major exporter among developing an add3itional advranbagcE,;o is the preferential tariff treatmrciit granted withiin the Latin Am-erican TYcD Trtxde Area. 18- d) Variations in the cost of construction, labor, freight *taxes and raw materials. e) Type of manufacturing process used and equ:lpment design. 9. In view of the varia-tions in these elements commonly found, especially in less developed regions, it would be misleading to rely on average cost figures related to particular mill sizes9 as indicated below, the ranges of costs by mill size are considerable. - Investment Costs 10. Investment costs discussed below, unless stated otherwise, refer to: site purchase and preparation, plant buildings, equipment, are also construction ovrerhead, anid interest during construction. There capital, investment in woodland or logging equipment, housing worling which accommodation for enployees, and other infrastructural investment might be required. 11. Investment costs per unit of output in the pulp and paper industry weere high alnd quite variable. 1/ Total investment per daily at 1/ In the United States the ratio of capital stock to total output capacity for the pulp and paper industries, as of 1957 in 1963 prices, was as followys: Industry Capital Out- Code /a Branch 'Ratio 26610 BuilJl.ing paper & board mills 1.1492 26110 Pull., lls 1.265 26310 Paperboard mills 1.240 26210 Paper mills *1l088 The above data represent the tenth to thirteenth highest capital output ratios in a ranking of 252 manufactuaring industry groups. Coiparable ratios for othar major industries a'e: Industry Capital Out- Code Branch 29100 Petroleum Refinery Operation .854 32200 Glass & Glassware .691 32410 Cement l.463 33100 Blast Furnaces & Steel 1gills .909 35410 I4achine Tools & Accessories .731 35520 Text;ile '14achinery .796 37420 Railroad & Street Cars .288 a.s /a Five digit codes devehopod by the National Planning Association adaptations of the U.S. Standard Industrial Classification. Source: Capacit-t. r.xpns-iL_-3on PT13nninw, Factors (National Planning ATssoeiat ion oJ ii , D.U., 1l66) pp. I-2-6 and I-2-7. 19- mill new 400 tons per day bleached softwood sulphate pulp ton 1/ for a Total invest- North America may vary between $87,500 and $137,500. 2/ in the order of iuent for a similar, mill of 600 tons per day would be in $75,000 to $1165600 per ton daily capacity. a Regarding integrated operations, total investraent 3/ for 12. and $125,000 400 tons per day linerboard mill could vary between $75,000 daily capacity. A mill of 100 tons per day of fine papers per ton per (wood-free wrriting and printing papers) requires an investmenrt degree of daily ton from $100,000 to $300,000, depending upon the with pulping facilities. A non-integrated mill of 50 tons integration unsound and per day of fine paper would be in most cases economically would require a captive local market and substantial protection. costs are also affected by the degree of product 13; Investmenit at a diversification. The larger the variety of products manufactured, Of course it given mill size, the larger -till be the irrvestmnt cost. also evident that capital expenditures are greater for integrated is mills. pulp and paper mills than for nonintegrated pulp or paper Most pulp and paper mills in North America and other developed 14. and operate an countries have daily capacities between 500 and 700 tons days per year. In British Columbia (Canada) all mills average of 350 570 awd under construction in 1966 had planned daily capacities bet-wieen On the other hand, mills in developing countries normally 770 tons. the average, have a daily capacity of 100 tons or less and operate, on of days than in developed countries. In certain cases a smaller n"mbnr countries. small pulp mills may be also economically feasible in developed conetitive advantage in raw materials These mills must possess a clear 4/ costs, proximity to markets, transport facilities, and management. fixed investment (at 1960 prices) in-a 100 ton per day 15. Total to one mill operating in a developing country fluctuates, according s' urce, between $13.4w million, for non-intezrate I u.rbleached chemical million for integrated bleached paper. 5/ Fixed invest-mint pulp, to $23.5 from per daily ton,, assuming 300 wiorking days per year, would range during construc- 1/ Total inivestmlenrt defined as mill cost, land, interest tion, start-up expenses, financial charges and working capital. Investment per daily ton equals total investment divided by daily capacity. and 5 million. 2/ The respective total investments are $35 million $ (These dat-a were provided by an international consulting engineering, firm). 3/ Same as footnote 1/above. Paris, 4i/ See Small Puilp Tillsg, An Economic Enquiry, by Sandtiell & Co., l960C(prFep;rod lfor t 7 TL)c 5/ Pulp and Paper Developrmient :in Asia and the Far East, FAOg SecreCtlariat apelr Vril (3). ITokyo Coni'ert < icec, Octobor 17-31 1960. -20- investment to $235,000. According to another source, fixved $135,000 (or 30,000 tons "for medium-sized mills of 100 tons per day capacity developed country ranges from $12 million to over per year) in a loss l/ depending on location, process and production program." $20 million, on fixed invest- influence of type and size of pulp and paper mills The from 25 to 200 tons ment for typical mills in developing countries daily capacity is showrn in Table 6. Table 6 Developing Countries Daily Capacity Fixed Ihvestment Costs for Mills of 25 to 200 Tons Capacity in Tons, Per Day, 25 50 100 200 ton Type Thousand dollars per Non-integrated 105 Unbleached chemical pulp 235 175 135 150 Bleached chemical pulp 325 240 190 Integraleed 14o Unblcl.iched paper 300 230 180 185 Bleached paper 390 295 235 t 1962, p. 180. Source: "Ilnasylval', FAO, Vol. 16 (4), iNo. 67, alnd paper Because of the manXy variables involved each pulp 16. It is c13,ar, is usually unique anad should be analyysed soparately. project scale play as seen in the above figures, that economies of however, per unit of important role in determining the investment cost a very integrated idll output. For example, fixed investmient per ton in an is less thani half that producing 200 tons per day of unbleached paper in a comparable mill of only 25 tons per day. 2/ 179. 1/ "Unasylva"l, FAO, Vol. 16 (4), iqo. 67, 1962, p. in. pigEos 3& through 2/ Economies of scales are iaore fully discussed 4D. -21- costs for 17. Table 7 gives other examples of actual invrestment and developing integrated anid non-integrated mills in both developed countries wit;h daily capacities from 25 to 750 tons. 1/ have been 18. For the purpose of illustration the data in Table 7 the mill in Graphs I and II. It is evident that, in genieral as plotted significantly. capacity increases investment costs per toIn tend to decline without speci- But it is also clear that it is misleading to generalize the process used, type of plant, location and other related fying different variables. Several mills of the same size may have very factors. investment costs depending on the total effect of these Capital costs represent a substantial portion of total produc- 19. capacities tion costs, especially in relatively small mills with daily or less. Capital costs in typical mills in developing of 200 tons one- of 100 tons daily capacity would normally represent from countries 8). quarter to one-third of total production costs 2/ (Table - Materials, Water and Power used 20. Fibrous raw materials account for the bulk of materials into major cate- in pulp anid paper making. These may be divided three Pulpwood is gories: wood fibers, non-wood fibers, anid waste paper. 80 per cent the principal raw mat;erial and accounts for approximately per is mXostly of total fibrous raw materials. The remaining 20 cent fiber from waste and a small amount of non-wood fibers. (Rome The Food and Agriculture Organization of the Unrited Nations 1/ costs, per Conference 1959) used the following arrerage investment 300 to daily ton for integrated mills in devaeloped countries of 500 tons: U.S. dollars Newsprinlt 11.0,000 Printing, Writing 150,000 Other Paper 140,000 Paperboard 90,000 do not indicate depreciation rates used in the calcula- 2/ These data rates are tiol. It sccan& from other cases that usual depreciation 5 per cent for buildings and 10 per cent for ec uipmirient - 22 - Table 7 World-wide Sample - Investment Costs for Pulp and Paper Mills of 25 to 750 Tons Dai Capacity Estimate Tons/ Investment Cost Year of Location or Construction Day Thou. US$/Ton Product Integrated lfilills Unbleached paper Developing 1962 25 310 Countries Pulp -nd paper .from reeds. Bleached semi- Asia 1965 50 290 chemical East Pulp & paper. Bleached America 1966 100 260 Kraft from hardwood South Bleached bagasse pulp and uriting and East Asia 1966 100 250 priniting paper South America 1966 200 140 Kraft pulp and paper North America 1967 200 130 Fine papers East Asia 1968 400 175 Kaaft pulp and newsprint Foodboard from North America 1967 400 115 bleached Kraft pulp Newsprint integrated with semi-bleached North America 1967 100 K40Kraft pulp North America 1966 600 70 Kraft 2inerboard NiewTsprint integrated bi-sul- 1968 750 81 -withphite hi-yieldand groundwood North America lion-integrated Mills Bleached semi- chemical book and Developing 1960 25 350 printing paper Countries Unbleached chemical Developing 1962 50 180 pulp Countries Ble ached writing & 1965 50 200 printinig paper Africa North America 1967 100 100 Specialty papers Bleached Kraft pulp Southern Europe 1965 200 1-10 fromr pine. Bleached Kraft pulp Soutlhern Europe 1967 400 90 from eucalyptus 600 87 Dleached Hraft puNlp 1967 using long-fi'brcd wood North Americ 750 84 Bloached Kraft pulp 1967 using long-fibrc,ed wood North America Sourcea: Informnation Oubnittedc by Sandl--11. ard. Co]rinLpy Liitod, acouver, Ca(nada. WNVEST'1ENT COSTS FOR VARIOUS TYPES OF INTEGRATED MILLS _ 400 ------ - c 0 UNBLEACHED PAPER 1 i 0 PULP AND PAPER FROM RESIDUALS. BLEACHED SEMI-CHEMICAL U- o i0 PULP AND PAPER. BLEACHED KRAFT FROM HARDWOOD C : 0 BLEACHED BAGASSE PULP AND WRITING AND PRINTING PAPER C,, z 200. o RKRAFT PULP AND NEWSPRINT PAPER U , 8 ~KRAFT PULP AND W. FINE PAPERS FOODBOARD FROM BLEACHED KRAFT PULP PULP ,3, |0oo [NEWSPRINT INTEGRATED WITH SEMI-BLEACHED KRAFT e WITH HI-YIELD BISULPHITE AND GROUNDWOOD O - u ,f|NEWSPRINT INTEGRATED __ { KRAFT LINERBOARD __ __ ______I _ _ _ _ 0* ______I _ 0 I00 200 300 400 500 600 700 800 MILL CAPACITY-TONS PER DAY SOURCE See text IBRD-4115 H MiLLS ! IE ST 2i'MT COSTS FOR VARIOUS TYPES OF NON-INTEGRATED 400--- O Bl EACHED SEMI-CHEMICAL BOOK AND PRINTING PAPER --- i.I 1' 00030 0 10 iz I z200 BLEACHEDWRITING AND PRINTING PAPER I ; r 0 UNBLEACHED CHEMICAL PIJLP' a - KRAFT PULP FROM PINE BLEACHED I__ w SPECIALTY PAPERSt BLEACHED KRAFT PULP FROM EUCALYPTUS BLEACHED KRAFT PULP USING LONG-FIBRED WOOD 300 400 500 600 ---. 700 800 c 0 100 200 > MILL CAPACITY -TONS -PER DAY SOURCE. See lext IRD-416 H Hi 1. 2 - Table 8 Share of Capital Costs in Total Production Cost for Vaiu of 4i1:- of 100 Tonls Daily Capjc.ity Per Cent of total production cost Non-Integrated at the mill Unbleached sulphate pulp (conifers) 28 Bleached " " " 27 Bleached sulphate pulp (broad-leaved wood) 29 Bleached " (straw) 30 Integrated Mechanical pulp 24 Chemnical groundwood 26 Unbleached NSSC /a pulp (broad-leaved wood) 31 Bleached INSSC pulp (broad-leaved wJood) 28 Newsprint, mechanical pulp 28 NSSC, corrugating board 34 /a NSSC neans Neutral Sulphite Seri-chemical Process. Source: "Unasylhral, FAO, Vol. 16 (4), NO. 67, 1962, p. 179. 21. Pulp can be produced from practically any fibrous vegetable product. Today, mainly because of the status of technical knowledge (see paras. 27"..O, Chapter I) the most important source of pulp is softwood or coniferous tree's. Hardwood or broad-leaved trees are being used in increasing but still relatively small quantitics, especially for production of cultural papers wilWare strength is not so important as in industrial papers. Greater use of hardwoods is likely to continue since fiber costs ; of traditional pulpable softwoods are rising on a world-wide basis. 22. In certain processes the quaxntity of wood per ton of pulp (in terms of dry w-Jood) is somewhat higher for hardwoods than for soft- woods. In other cases, however, the quantities are quite similar for either hardwood or softwood (Table 9). 23. Because of the large quiantities of wood requred for the production of pulp and paper it is ex-trecmly important to coordinate the development of this industry with the availability and developim;cnt of forest resources. It must be borne in mind that tree planlt2cionrs normally require several decades in order to reach maturity for pulping (Table 10), Along, sofbwoods pine and larch are the two fsztest-growming require 20 and 30 years respectively to reach pulping age. species and 1 HIardwoods, on the uhol1c, seremi to g-row somouh.at faster. The world s fastest growing tree. is eucalyptus w-it;h an age of foiling of 10 years. 26 Table 9 Pulp Wood Consumpison Per Ton of Pulp ton woodpertonf=fdy 9 pul Tons of wood Type_of Pulp Softwoods Hardtxoods Groundwood, unbleached or bleached 1.0 1.2 /a Kraft , unbleached 2.0 /b 1.8 Kraft, bleached 2.2 7i 2.0 Sulfite, unbleached 1.8 77 1.8 Sulfite, bleached, strong 2.1 7c 2.0 Sulfite, bleached soft 2.2 7c 2.1 Sulfite, bleached., rayon 2.4 7r 2$5 Sulfite, bleached, acetate 2.8 7- Prehydrolysis-Kraft, bleached, cord 2.7 77 2.8 Chemiground 1.2 Cold caustic 1.2 Neutral sulfite, unbleached 1.3 Neutral sulfite, bleached 1.7 /a Bleached, poplar /b Pine /c Spruce Source: Adaptled from Sveen A. Rydholim, Pulping Processes, p. 1204. The age of felling for willow is 15 years, poplar 15 years and teak 25 years. These are representative periods characteristic of warmer climates and are considerably longer in northern latitudes. Therefore, the present trenid tow-ard greater use of hardwoods wtould favor particu- larly the less developed regions because of their climatic conditioas and vast hardwood forest resources. 24. The most commonly used tree species for pulping are, in order of importance: pine, spruce, fir, hemnlock, and larch and cedar in signi- ficanrl-y smaller quantities. Among hardwJoods the species mainl3y used are: birch, poplar, willow and eucalyptus (in tropical countries). Age of telling is niot the onl.y fac-tor to consider in selectiing a particular tree specice One also has to take irrbo account the manufacturing proce:;5s bo be used, state of: technical knowledge, and types of pulp and paper products to be maniufactured. Table 10 Avera,e A e of Fel2inp-, of Main Softwood and Hardwood Species Used for PulEm Nmaber of Number of Softwoods years /a Hardwoods Years /a Cedar (Juniperus virginiana) 75 Beech 75 Hemlock (Tsuga canadensis) 60 Oak (white oak) 50 Fir (Abies balsamea mainly; other Birch (paper birch; also firs also slwow however) 50 European birches) 40 Spruce (Picea rubra, glauca2 abies) 50 Cypress (Taxodium Larch (Larix laricina) 30 distichum--3aldcypress) 40 Pine (Southernl U.S. pines; also in Mahogany 30 South Africa, Australia, etc.) 20 OaLk (red oak) 30 Teak 25 Poplar (Populus spp.) 25 Willow (Salix nigra) 15 Eucalyptus (faster grow- ing tree species) 10 /a Age of felling is the average number of years required for a tree to reach maturity for pulping. These averages, of course, may vary from country to counxtry- deponding on olirmatic conditions, altitude, soil, etc. Source: Forest Products Division, U.S. Departmient of Agricul-ture. 25. Other sources of pulp are: bamboo, bagasse (a residue from cane .;ugar milling), esparto ( a certauii type of grass), rags, and variots, agriculbural strawJ products (corn, wheat, rice, rye). 1/ Some of the main problems facing the use of these materials are discussed in para. 3b, section (c), Chapter I. 26. Price and qualty of wood have a he,avy weight in the compe- titiveness of the final products. For this reason and in order to remadn competitive;, producers are always loolcLng for new methods to lower wood costs. For examnple, improved mechawization in Southeastern Ulited States has helped to maintain wioos costs within reasonable limits in spite of rising labor costs and today average prices stand at aboutb $20 per cord or some $34 per ton of chemical pulp Canadian producers a.re also continuously semaching for new methods to handle the raw wood in order to maaitain their competit±ive position, 1/ Pulp basad on these materials represents about 7 per cext of tobal world production of pulp for paper and board. Table 11 PVETPW0CPRrE^S IN THE UNITED STATES. BY SEIECTED SPECIES, 1950-67 (Dollars oer standard cord, including bark) Southeast Midsouth Chips-Southern Wisconsin Sou-rdwood southErn pine Heardoods Southern pine Hardwoods P,r 5crue Aspen 1957-ss t)? - c1Currentt Current 197-589 Current 19M759" L;rer.- '5)-57 Current* :957 C urr;fI /1 dollars /1 dollars dollars /1 dollars dollars /1 dollars dollars /1 dollars dollars 7 - dcllar- dollars /1 dollars dollars /1 dollars 14.oo 10.65 12.25 - - .,3.50 22.45 O. 'o 20.95 11.90 13.70 - - 212.15 - 14.25 1.75 13.00 13.45 - - 195J. 22.50 23.25 10.50 10.85 13.60 14.25 - 14.30 15.20 12.90 13.70 - - 1952 25.00 26.60 12.25 13.05 13.90 14.80 - - 14.25 15.35 12.80 13.80 - - 1953 23.25 25.10 12.00 12.95 13.90 15.00 - - - 1i.30 15.4o 12.85 13.85 - - 2L;.2? 26.10 12.50 13.45 14.00 15.05 - - 14.60 15.65 12.90 13.85 - - 55 24.75 26.55 11.50 12.35 14.40 15.45 - - - - - 15.65 16.25 13.50 14.05 2'56 26.03 27.05 12.25 12.75 15.4o 16.00 14.25 14.ljo 20.0 26.25 11.75 l1.85 15.50 15.65 13.35 13.50 15.30 15.45 13.35 13.50 15.30 15.25 13.10 13.05 14.30 14.25 -9;& 26.25 26.15 12.00 11.95 15.50 15.45 13.45 13.40 15.60 13.10 13.00 14.30 14.20 11551 26.25 26.10 11.5o 11.45 16.oo 15.9o 13.70 13.60 15.70 13.10 13.00 :L4.40 14.30 26.75 26.55 12.00 ll.90 16.45 16.35 13.60 13.50 16.05 15.95 13.00 14.50 14-45 27.25 27.15 13.00 12.95 16.55 16.50 13.50 13.45 15.85 15.80 13.05 15.70 13.20 13.10 14.60 14.50 1-_2 27.25 27.10 12.75 12.65 16.55 16.45 13.40 13.30 15.80 15.75 15.70 13.10 13.05 14.40 14-35 1903 25.75 25.65 13.75 13.70 16.55 16.50 13.45 13.4o 13.15 13.10 14.30 14.25 - - - - 17.00 16.90 13.60 13.55 15.90 15.80 13.80 13.45 14.xo 14.o5 - - - - 17.65 17.20 14.35 14.00 16.30 15.90 14.90 14.05 16.85 15.90 15.05 14.20 15.15 14.30 j.U /2 - - - - 18.80 17.75 17.00 16.05 15.25 14.40 15.25 14.40 1 -67 /2 30.75 29.00 15.50 14.65 19.00 17.90 15.oo 14.15 of all commodities (1957-59 = 100). '3erved by .i i p.ice in current dollars by the Bureau of Labor Statistics iholesale price index 2 r eh narr. E?o. 1066, November 1967) p. 62. 1967. U.S. Departnnnt of Agriculture, Forest Service (Miscellaneous Publication __e, Tr D-^>nd nrA Price 9tiWation for Forest Products, 29 27a Table 11 givres pulpwood prices in the TJnited States from 195( to 1967. The average price per cord 1/ in 1967 was for spruce $3075' and Southern pine $17-19. Regarding hardwoods the average price was $1t5.25* 28. A comparison of pulpwood prices in varwious regions of the world is given in Table 12. These prices, however, are for 1960 and reflect the relative competitive position of the countr-y or region in that year. Variations between countries in the rates of growth of price increases since 1960 ray have since changed their relative compe- titive position. Scandinavian prices of wood are at present about $70 per ton of chemical pulp or about twice the level in Southeastern United States. This cost disadvantage is creating difficult -problems for Scandinavian producers and the inidustry is passing through a period of restructuring, involving mechanization, automation and closing down small- and med:imunsize non-competitive marginal mills. 2/ 29, Wood costs in p-arts of British Columbia (Canada) are as much as 50 per cenrt lower than. those in Scandinavia anid other European countries. 3/ The cormpetiti'veness of Canadian firms is greatly favored by the vertilcal integration of pulp and paper operations from logging of timber to marketing of the final products. 30. Wood prices in developing countries are normally h-igher than in: developed countries. In this context it is irnteresting to examine the case of Chile, a developing country endowed with good qual:ity w¢ood resoUrces at' coi:;,atLtive prices, Som0e four yeas ago Chilean prices of wood were about $15 per cord as compa-ed wi-th $20 in SoutheastGen United. States, but today the position has changed substantially. The present price in Souatheastern United States is about $21 per cord -while .in Chile it is only slightly lower and thlere a:re strong indications of further price increases in Chile in the near future. The relative deterioration in Chilean conmpetitiveness has been due to the new methods of riechanization introduced in the United States anid to the failure of the exchange rate to keep pace with domestic inflation. 1/ One cord contais about 85-90 solid cubbic feet of wood. One cubic Maeter is eqcial to 35.3 culbic feet-. One ton of wTood is approImlately equivalent to 1.7 cords. This equivalence is only an approxLmation because the weiglt is affected by the value of density of the wood. A cord is defined as ' tthl-o quantity in a pile of 4.foot witood 8 feet long and 4 feet high, when the wood is stacked in an orderly manner tqith all sticks parallel"' (Svenl A. Rydhoi3mi P i rocesses p. 262)c 2/ One of the Swedish mills closcd during 1967 bocauso it was co oidered too sma:ll for profitable orizeratjiol; i-t VuA c11d tLnnual capacity of 16,000 tons of pulp and 20,000 tons of pa.per ("Pulp and Paper", July 1967, p. 120), 3/ The Pulp and Paper iTdustry of Pritishl Coliimbia (br.-itishbolurobia HYdro und Po-unr furUiority; Vancouvter;, L5;h ) 13. -30- Table 12 Estimated Pulpwood Prices, De2lvered at Miull, in 1960 U.S.$ 1er ton of bone dry wood Regna ecies U.S.$ Regiong iies es Softwoods Hardwoods Canada (eastern), spruce, fir 30 It (western), it if 22 U.*-S.A. (north-) iI t 26 U.S .A. (north), hardwoods 17 " " pine 22 It (west), spruce, hemlock 24 U.S.cA. ( ,.), hardwoods 17 " douglas fir 20 (south),, pines (long- leaf, slash 16 U.S.A. (south), oak 14 (south), pines (loblolly,U. shortleaf) 18 U.SA. (south), gum 16 Scandinavria, spruce 36 Scancd.navia, b.rch 24 Itpine 33 Central Europe, beech 18 if It poplar 25 Southern Europe, eucalypt 13 South Africa, pine 12 South Africa, eucalypt 8 South America, eucalypt 5 Source: Adapted from Sven A. Rydhol1m, Pulping Processes, p. 203. 31 In developiing countries one frequerntly finds large variations in pu1 ood prices between regions. Itlus present prices of coniferous woods in Mexico are aboout $25 per cord in the state of Chihuahua, but $34 in the state of Guerrero. 1/ These large price differentials are caused by the inadequacy of the transport system and inaccessibility of the location of forest areas. 32. Countries with low priced and good quality material resources, especially wood, can sometimes operate small-scale mills successfully with relatively low levels of tariff protection. For example, in Brazil the price of coniferous pulpwood in 1966 was about 85 per cent lower than l/ Original prices quoted in terms of dollars per cubic menter ($10O5 and $14.0 respectively) alnd then cornverted into cords by multiplying by the estimated teclhical factor 2.4 (85 cubic feet in a cord divTided bY 35.3 cubic fect in a cubic meter), 32 - pulpwfood prices in Scandinavia, 57 per cent lower tlhan in NTorth America, and 60 per cent lowier than in Chile. 1/ In this case the large natural advantage in wood costs offsets most of the disadvantages of higher domestic prices for chemnicals and higher investment costs inherent in small-scale production. 33. From all the above it is clear that the cost of wood is of great importance. In order to minimize wood costs the current world trend is to locate pulp mills near the forest resources. W4ood represents a very large proportion of total manufacturing costs. For a mill of about 100 tons daily capacity, the share of wood normally varies between 30 and 50 per cent. In Chile for a mill of 80,000 tons/year of pulp the share of wood in total costs was about 30 per cent. For a larger mill of 180,000 tons, rear of Kraft pulp the share of wood in total costs was almost 40 per cent in the U.S.A. and somewhat less in Chile. 34. Other materials needed in pulp and paper malkng are: 2/ sodium sulphate, limestone, salt, sodium chlorate, aluminuLm sulphate, liquid chlorine caustic soda, sulphuric acid, sulphur, fuel oil, water, and electric power. 3/ ?Rices of materials are,, as a rule, substantially- higher in developing-than developed countries (Table 13). It is not unusual to finld prices equivalent to more than twice those in developed countries. 35. Some developing countries possess raw materials, i.e., wood, bagasse,, etc., which are competitive with those prevailing in developed countries. This advantage, howiever, is often more than offset by hligher prices for otller inputs anid diseconomies of small-scale operations. A clear example of this situation is Pakistan where the disad'vantage of very high input prices (other than bagasse pulp wqhich is the najor raw material) and diseconomies of small-scale production, result in prices for paper products about double those in NTorth America. Moreover, PakLstani papers made from bagasse are of lower quality than sinilar types made from wood in the developed countries. 4/ 1/ In counitries with over-valued currencies the exchange rate used for conversion has, of course, an important inmpact upon international price comparisons. In such cases tlhe comparison overestiinates the price disadvantlage of the counitry with an over-valued currency. 2/ Quantities of chemicals used in the manaufacture of pulp for some major pulping processes are given in Table 2 after the text. 3/ Power requirement for a pulp mnill of 220,000 tons/year is estimated at about- 25.,000 19 An integrated pulp and paper mill of 31,000 tons/year of paper operating in Palistan requires approximately 8>000 KWi.See para. 26, Chapter I. 4/ The use of bagasse for paper making is restricted to a lirnited number of products while w-ood has a substantially wider application. Other characteriotics of bagasse are: (a) it conitains as much as 30 per cent of ti.ssuc.s ("pith") which are of little value for paper making; (b) it yields a weak, siort fiber pulp whlich needs to be mixed with 1020 per ceiLat of long-fiber pulp in order to prov-ide adequLate strcngbh to the paper. -. 32- 36. Domestic availability of all materials is, inevertheless. not a prerequisite for development of an efficient pulp and paper industry. 1voreover, policies to encourage domestic production of all materials under a highly protective syslom are bound to worsen rather than improve the long-run competitiveness of the industry. Research anld development is continuously broadening the number of materials wthich are suitable for pulp and paper making. Denmark lacks almost all raw materials, but development of now processes and raw material iniputs plus concentration of production on high quality papers (as opposed to large scale mass production) has enabled the Danish paper industry to develop and com- pete successfully. Table 13 Estimated Average Prices of Major Inputs for the Production of Pulp and Paper Products, 1966 Dollars per metric ton North Canada United Pakis- Product America /a Kingdom /b Chile Brazil tan /c Pulp wood (in terms of pulp) 30-4j0 35 26 10 36 /d Sodium sulfate (salt calke) 24-32 32 22 50 72 102 limestone 6-12 6 10 14 28 4 Salt 8-13 12 23 Sodiumn Chlorate 215 236 (Nda Clo3 ) 186 162 Aluninum sulphate 49 49 48 36 95 Chlorinie (liquid) 80 74 100 124, .17 190 Caustic Soda (l10, NaOGH) 75 68 88 120 98 240 Starch 176 160 210 Sulplhuric Acid (SO4 ½)H2 21 26 63 150 -luuel Oil 12-18 /e 22 31 Power (price per KW) 005,01 .0095 eo16 /a Based on total value anid total quantity consumed during 1963 (except for pulp wood). Takein from The Pulp and Paper Industry of British Columbi.a. /b Prices in June 1968c /c Crude estimates. /d llcaLcho. begasse pulp (based on- a requirement of 3.95 tons of whole bagas.e,c5 dry basis, per ton of pullp). /e P.o.b. Southern N. lmerica $12; Eastern Canada $18. Sources: The Pulp and P,?per Influsthry of Iri.tish Columbia (British Co1uwi. IlIcro and Yo,.cr 1;l:,.1:;.- UotUm.' 71?'J5 p. 6fl; Linternsatiorial Finnnce Corporx,,tion (var;:i.ru:-, appral U1l ropur bS) and "The XJorld's Ia.y)n Roview", Juno 13, 1968p3 2$06. 33- Table 14 Share of Materials and Power, Steam and Water in Total Production Costs Fibrous Power, raw Other Steam & materials Chemicals Materials /a Water Total Per cent of total production cost at the mill Non-Integrated Unbleached sulphate pulp (conifers) 50 4 3 2 59 Bleached salphate pulp t(olmifers) 43 12 /b 3 4 Ic 62 Bleached sulphate pulp (broad-leaved wood) 35 14 3 5 /c 57 Bleached sulphate pulp (Straw) 32 15 3 5 55 Integrated Mechanical pulp 40 - 3 21 64 Chemical groundwood 29 12 3 18 62 Unble,.ched NSSC pulp (broad-leaved wood) 36 3 /d 4 12 55 Bleached 1\'SSC pulp (brood-leaved wood) 32 18 3 10 63 NlewsTprint (Yechanical pulp) 39 - 4 15 58 13 52 N1SSC - corrugating board 31 3 /d 5 /a In a large Canadian west coast bleached sulphate mill "TOther Materials" is 7.5%. Other MTaterials covrers the cost of machine clothing, repair, supplies anr1 wrapping material for bales and rolls. /b Chemical figures in tihe same Canadian west coast mill mak:ing bleached KEraft is 16%. /c Sinilarly, in the Ca.nadian west coast mill the steamŽ, p,er and water cost is 10% of product cost. /d Studios of MSSC mills in Eastern Canada using hardlboard indicate chemical costs uip to 9%. Sourc: "Unasylvalt, PiAo, Vol. 16, ino. 67, 1962,t p. 179. 34 - 37. Water requirements (see para. 28, Chapter I) are high and vary considerably according to operating conditions and type of manlufac- turing processes used. An unbleached sulphate pulp mill would normally require an average of 100 cubic meters of water per ton of pulp u.p to a maximum of 150 cubic meters. Similarly, for bleached pulp water consumption may vary from 150 to 250 cubic meters per ton. To convrert tIhi s type of pulp into paper would require an additional 50 to 100 cubic meters per ton. Although from a technical point of view an ample year-round supply of water is extremely important, in terms of value water represents a minor portion of total cost (frequently less than 2 per cent). Availability of water in less developed regions should not pose any special problem to the growth of the pulp and paper industry. 38.. For a mill in a developing country of 100 tons/day the relative importance of the various categories of inputs discussed in this section is shown below. - Labor 39. The use of continuous pulping processes and the trend towards more powerful and larger capacity equipment has, over time, decreased substantially the amount of labor per unit of output. In the United States the numiiber of production workers from 1947 to 1960 increased by less than 8 per cent wphile output per worker in the smne period rose by alnost 60 per cent. 1/ Pulp ancd paper making is rapidly becoming auto- mlated in largescaleproduction uni-bs where -the relative number of w,orkers tends to declirs. 40. With the introduction of labor-saving equipment, productivity has been increasing fairly rapidly along with increases in the capital invested per worlcer. n NIew Zealand the number of tonis. produced per employee in l964-65 was more than three tiries the level in 1951-52. In the same period the capital per person employed increased fron $34500 to $24,000. Crown Zellerbach Corp. of USA, a leading world producer of pulp and paper, has total assets of $33,000 per person employed, including persons employed in sawmilling anid papar converting. 41. Annual average wages and salaries pe-r person employed are, of course, higher in developed countries than in developing countries. The average for the Canadian pulp and paPer industry was $5,600 in 1963. 2/ In Nlew Zealnd, lhiere this industrry occupies a predominant positionA, the avorciC,c wage and salary in 1964-65 was about $4,000. A mill operating in Chile reported an average pa-reOl11 for both staff and Iworkers (including fring-: bence,fits) of $3,000. HoIever, most mills in developing coun1tries E/E° Weinbgrg, aImpacto of Chrinp;o and Autonmation. in the Labor, Pulp PIii U.Sziof lsIlii2;t;on, .C, October 1962) p. 11. 2/ $e,5,900 for Dritish ColLum,bia only. 35- - require foreign technical, administrative and management staff diring the first years of operation. Therefore,, i such cases the average wage and salary for all employees is not representative of local condi- tions since it is heavily weighted by the relatively larger salaries $470 of foreign personnel. A mill inr E t hiopia reports an average of for produc tion workers alone. 42. iTbor costs per unit of output for a given mainufacturing tprocess mill size generally show little variation between less developed and and In developed countries despite large differentials in wage rates. 1/ developing countries more workers are required to operate a mill than low0Ter in industrialized countries, and their lower wages are offset by productivity. 2/ For example, Chilean mills arith annual capacities in the range-of 200,000 - 250,000 tons, have labor costs per unit of output- similar to those in North America despite significantly lower wage rates in Chileo 43. Direct labor costs per ton of output fluctuate very substantiallir more by type of manufacturing processes. The more specialized and the the products, the higher the labor costs. In a large mill, highly varied in automated, labor cost per ton of output is substantiall-y lowver than a siuall-scale mill producing specialty papers. This cost differential may be as high as 1 to.10 other things being equal. The lowest labor costs per unit of output are found in large-scale mills making mass products. 44. Direct labor costs for integrated pu:lp and paper mills may vary between $9 and $17 per ton depending upon capacity and products manu- factured (Table 15). alis with daily capacities of 100 tons or less of, say, normally have substantially higher labor costs than larger mills tons per day Cost variations beti4een similar mills, however, can 600 0 integrated be high if strongly affected by local conditions. Thus for an the nmll outsido North America producing 300 tons per day of newsprint labor cost is $9050 per ton while another similar mill in North America 'with a larger capacity (450 tons/day) has a higher labor cost of $16.50 per ton. States 1/ A sldlled worker in the pu-l-p anid paper inidustry in the United earns about $5 per hour while a worker of the same industry in Pakistan, Ethiopia and Taiwan earns about 20 to 30 U S.3 cents per hour (equivalent to some 4 to 6 per cent of the b.S. wage rate). employs, 2/ A Canadian integrated mill with a daily capacity of 600 tons at the rill, a total of 425 persons while a Chxilean mill of comiparable capacity employs about twice as iiany persons. in maany other devel- oping countries tlhis ratio i.s even higher. -36- Table 15 Direct Labor Cost for integrated and Non-Integrated P1 &_P1per Mills Direct Labor /a Co.st as Per Date cent of: Total Date Source of $US/ Direct l4anu- Eaform- Tons! Colst ation Day Product Inf orniation Location Ton facturing 1965 5Q Pulp and Paper Feasibility Asia 12.50 5.3 Bleached Kraft studY 8.3 1965 100 Chemi-groundwood Mil. oper- Asia 1)4o00 Conventlional ating data groundwood. Pur- chased long fibre /b 10.0 1967 100- Unbleached Kraft Mlill oper- Southern 9.50 ating data Europe 10.00 1967 100- Bleached IKaft Mill oper- Southern 12.5 ating data Europe 9e5o 10.0 1967 300 Newsprint. Conven- M4ill oper- Outside tional groundwvood ating data North semi- & bleached America Kraft 23.0 1967 )450 Newsprint. Conven- Feasibility NTorth 16.50 tional ground ood study Amnerica & semi-bleached Iraft 21.0 1966 500 Newsprint. Conven- Industry North 16$50 tional groundwood. study America Sulphite 9.00 10.0 1967 600 TAnerboard Mill oper- North atling data America 13.00 16.0 1967 1,000 11oxuccprint. Conven- lill oper- NTorth tional groundwood. ating data lAne.ica Sulphilte /a Does not iLnclude adinim½tration, depreciation and overlioad. /b Non-intcgr..lcd. Source: Infoination s-ubmxiittcd by Sandwell anid Compan, Limited, Vancouvor, Canada. -37- 45j. Quite often in mills in developing countries the share of labor in to-tal cost may not rise with increases in capacity. There have been cases of mi.lls that expanded output from 30,000 to 60,000 tons per year with little effect upon the relative share of labor costs. A major reason for this situation is initial overstaffing. There are eveni a few cases of overstaffed mills that have succeeded in expanding capacity without increasing the number of employees. I n such cases it is possible to achieve substantial reductions in labor costs. 46. By contrast, in major producing and exporting coiuntries the share of labor in total costs tends to decline more rapidly with increases in capacity as conrpared with developing countries. Thus, in North America the share of labor in total costs may be approx:imoately 15 per cent for a pulp and paper mill of about 100,000 tons/year. This share5 howrever, if the capeaity is doubled could be reduced to approximately 10-12 per cent. The improvement in labor costs is due to the in-troduc- tion of automated equipment and new operational methods which permit large increases in output with small additions to the labor force. 47. In the United States direct labor requirements are about 5 man-hours per ton for chemical pulps and abollu 3 man-hours per ton for groundwfood and semi-chemical pulpse. These figures are representati1ve of presently established rmiills a-.d improved design in new mills could reduce the figures somewhat. 48. Efficienci y is commonly mrceasured by output per worker or employee. Data available for a feti mills indicate values ranging from less than one hundred to several hundred tons per worker per year. Small-scale mills show substantially lower output per worker thaln large-scale mills. For example, a 100 ton per day integrated mill in a developing country may produce 100 tons per annrum per worker while a miLL of 700 tons per day nmay produce ten tim,.s as much per worker, Among mills maling onlyv specialty p-apers it is common to findr. annual outputs per worker of less than 100 tons. Out-put per worker is closely linked to the size of the mill and type of products manufactured. 49. Direct employment gencrated by pulp anid paper mills is not high but indirect emuployment on forestry operations is frequently, higher than in the mill itself, Thus, a $36 milLion integrated Canadian linerboard mi.ll employed 425 persons (230 salaried staff plus 195 workers) plus an additional 470 people in woodlands and saimll operations> Irndirect employment effects are e-ven more pronounced in. developing countries In B-ra.zil an investmernt of $26 million, in a mill producil]r; annuallSr 47,000 tons0 of Kraft paper and 1-0,000 tons of pulp, generat.ed emplo,,n tm:bfor 600 pcrsons plus an additional 1,000 jobs in foresUry operationls. -38 Economies of Scale 50. Economies of scale in the proCauction of pulp and paper are very important. The main reason is that as the mill size increases, certain manufacturing costs, i.e., depreciation, administration, over- head, labor, etc., tend to rise only very moderately and consequently these costs per unit of output show a marked reduction. On the other hand, consumption of materials, electricity and fuel., tend to vary proportionately to output and are little affected by mill size. Of course, one can also achieve economies in the purchase of materials in large quantities. Moreover, automation and power-operated equipment is mainly designed for large mills and it is less economical when used in small-scale mills. 51. Economies of scale depend on the level of output which in turn depends on bhe size of the market, The following elements are important to the economi.es of a project: a) Costs of investment and production corresponding to various alternative mill sizes; b) Size of the actual market and expected future growJth, -i.e., marketbing of the output., location of markets, trarnspor-bation costs, etc. c) Prices (excluding duties) of comparable import products. 52. Economies of scale in pulp and paper applyr differently to the two main categories of products. The first category includes mass type products suchi a.s pulp, container board, newsprint, Kraft paper and food board. By, modern standards mills in this group, competitivo in inlter- national marketsl, have daily capacities normally varying between 500 and 900 tons, However, European m'ills wiith daily capacities of about 200 tons are able to prosper because of their close location to the mnarkets and a certain degree of protection. 53. The second category of products, called "specialty papersiT, is composed of special printing and writing paper (excluding new,sprint) tissues and other fine papers. Ln this group, economies of scale are also imiportanrt but mill sizes are much smaller. In the United States many plants have beeni operat ing economi.cally with daily outputs of about 100 'Lons. In Wu-ope the capacities are even smaller,, in the range of 25 to 100 tons per day, In this category, technological kmow-how and qualitby control may be as import ai.n as scale. 51;* The minimum economiOLc size woLld,, of ccurso, vary from countr to country cdr'pondi.nL upon the corrpetitivcemss of local materials, the manufacturinig process and othcr related factors. In a study of the pulp and pi.q)cr irndidlusr,y ina T;tin Amnei.ca it was concli.lode thaL in g_ncneral "lif the hypothetical plantrs were;I;to cuiipote in uiorld3 markets the 50-ton plants -39, would operate at a loss, the 100-ton plants would have unsatisfactory earnings, and the 200-ton plants would be at best margiallaly attractive"l1/ These calculations wore based on annual production of 330 days and on the assumiption that producers were exempt from payment of domestic taxes. 55. In developing countries there are usuaLly too many small mills for thie limted size of the local market. In a survey of Thailand, Malaysia, Singapore, :Indonesia and the Philippines, it was forund that the biggest mill in these countries produced less than 4.0 tons per day. 2/ The same survey concluded that perhaps one or two pulp and paper mills of not less than 150 to 200 tons per day could be justified. 56. Rapid technological progress has resulted in a trend towards bigger mills, and keener competition in both internal and external markets. As a result, many mills have gone out of business while others have resorted to mergers in order to suwvive. 57. Twenty years ago a pulp mill oL 135 tons per day was considered big while at present a mill producing less than 500 tons per day of Kraft pulp is considered uneconomic. Anzybhing less than 500 tons per, day would normally require a protected market, The same trend has occurred in the production of specialty papers. Nowadays a paper mill of 50 tons per day of fine papers, even if non-integrated, would also require a captive market. 583 The trelnd towards larger production units has been particularly importarnt in the. developed counitries. Nills too small for profitable operations are continually being closed down. For example, receintly a Swedish firm decided to close a mill-ith an annual capacity of 16,000 tons of pulp and 20,000 tons of paper. A similar decision wias taken by a Norwegian company producing annually 27,000 tolns of bleached sulphite pulp and 12, 000 ton1s of paperboard alnd coated paper. Neos t Scarndinavian mills producing pulp and newsprint have annual capacities of at least 150,000 tons of pulp and 100,000 tons of newsprinrt. 1/ This generalization is based on a study of the followiing manufacturing processes: a) unbleachcd Kraft pulp; b) bleached IKraft pulp; c) unblcached KraEft pulp and paper; d) bleached Kraft pulp and paper; e) newsprinit (partially inrtegrated); f) unble ached semi:chemrical pulp and paper; g) bleached sernichemical pulp and paper (Progran.m.ng Data and Criteria for the Pulp and Pa.por Industry, ECLA, Unitec. Nations, Santiago,, 1l, )le ' p 2To 2/ "Pulp and Paper," Novemrber 6, 1967, p. 7. - 40 - 59. The relationship between capacity and total fixed investment for Lills from 25 to 200 tons per day is as foJlows: Total FixBled Investment - Mtillion $ Non-integrated Integrated Integrated Unbleached Unbleached Bleached Capacity Chemnical Pulp Paper Paoer Percent Percent Percent Tonsda Increase Amount Increase Amount Inicrease Amoint increase 25 - 5.8 - 7.5 - 9.8 50 100 8.8 52 11.5 53 14.8 51 100 3Q0 13.4 130 17.9 138 23.5 140 200 700 21.1 263 28.2 275 36.9 275 Scurce: Table 3, Statistical Appendix. 60, The abovre data clearly point o-ut hat as mill capacity rises the share of total fixed investment per unit of output tends bo decrease significantly, In order to double the size of a mill, from 25 to 50 tons/day, it is necessary to increase fixed investment by only about 50 per cent. A more strikLng example of the imnportance of economies of scale is the comparison of a mill of 25 tons/day with one of 200 tons/day. In this case output would increase by 700 per cent, while fixed investment rises only 263 per cent. 61. Economies of scale ini direct manufacturing costs are also impor- tant. 1/ Labor and administration and overhead costs are little affected by mill size and therefore with increasing outputs unit costs decline very substantially. On the other hand,, requirements of materials, fuel, and power are normally uniform for a given manufacturing process. Direct unit manufacturing costs are about 21 to 27 per cent lower 2/ in a mill of 100 tons/day as compared to one of only 50 tons/day. Additional significant reductions in unit costs mcay be obtained in a mill of 200 tons/day. Direct manufacturing costs in such a mill are, on average, about 18 per cent lower than in a mi1ll of only 100 tons/day. 62e Graphs III and IV show unit investment cost and direct unit manufacturing costs for various t-ypes of mills from 50 to 200 tons of dai,ly capacity according to estimates prepared byk the Economic Commission for Latin America. Total production costs reflecting the influence of both inivestment requiremenrts and manufacturing costs also tend to decrease significanTtly with rising mill capacity. This relationship is shown in Graph V. 3/ 1/ Direct ma_nufacturin-g costbs refer to all matorials, fuel and power, plus labor and administration and overhead costs. 2/ Depending upon the products manuf,'>Lcturcd, i.e., unble ached Kraft pulp 26 per cent lower, blQ aclicd IKraft pulp 25 per cent lower, and newsv- print (partially integrated) 21 per cent Lower. 3/ Other examples of production costs of newsprit for irlls from 100 to 500 tons per day is given in Table It, Statistical IpPlix. GIM PH III and Papor Mil t ~0 Tn ct -1(\ ai4) (MILlions or' doll.&ro pcx'r cI-Aly t"da Of' 4-~lV) II 0O,22-p ,- airidrJo> 13i0 Blo~ached. N55C~ puLIp canc pi-xti UriJ;..cko raftid -p2 lj and pa\per- -, pulp Unblcacpusnlp n'pC .. 't1dhr^aft \...... \ .Unbleachod NSS3C Pulp a?nd 1,pclp 0.05- 5__ 0 5)10:5\r \ _ C - Source ' F \ 4-2 - G.?JLH IV Pulpn ancl Papr Mills L50 to 200 Tons Daily CEapct ,.' Dit,s oCt' vElt A I. C.. (Do)h~Ap'.ar rA.z-.i.e tori) pu-lp wnd upcrpx~ Unblec~chcA kra)ft~ ;.l pul p and papur - Bfl-rchcrl kraft--\ yl- , N -* 150 c'.rrt - KplUi!bleachcd )(;3l.{ei~t ki- Pt _palp wi ^t 50) 10| 3 ! 4^' rt .re I,. ; -c P,)0c).- :- 10 43 D GRAPH V Pu-lp and Paper Mills, 5O to 200 Tonis DalLy Capact I i '1 '1 I' C:t ~A"OT'lI II ." T)' -S (Dl.llars per motric toin) 32,' :. 3.C#() - \ prtlp ziwl P're Bln.cachud INIS::.A\ . LlP and pa;C'-\ \ --Il3lachod Icraft-- ,' \ 1jnblcach~(-d )l-f t~ _plp 200 Ur1b) roched kr - \i rpalp -pualp anrl pipcir 50 100K) 50 ...- .1-- 50 1&.0 150 (Kct;'~ t . .2. ; s,* .. - vv& '5^-' l')t*}'I*; t %'t'i ,C , .* . + tt ; + -\ ...... 11./ii' );*)...... >.' ...}-/:'; *'1 4.' ...... -144- CHAPTER III WORLD TREEDS IN CONSUMPTIONU ODUCTION AND TRADE 1. Demand for pulp and paper products is heavily concentrated in a few developed countries. The main producers of pulp and paper are also the main sellers in international markets. In developing coumtries both consurmption and production of pulp and paper are relativel3y low but are increasing at a faster rate than in developed countries. Never- theless, total consumption in developing countries is well above their present production capabilities. There is a fLirly high degree of correlation between paper consumption and levels of income. Consunption by Regions and Countries 2. World consumption of woodpulp is of course directly dependenit nostly on the demand for paper products and it reached 78.3 million xentric tons in 1965. Consumption of' woodpulp is heavily concentlrated in the industrialized countries. 1/ Thus in 1964-65 -tle United States consumed 41 per cent of the world total,, Canada 12 per cent, Europe 30 per cent, Japan 7 per cent and the U-S .S R per centb. The remaining 5 per cent was divided among Asia (excluding Japan), Latin America, Africa, and the Pacific Area. 3. The ten mlost important consuming countries of woodpulp in 1065 were: Country MillJionl tons Unibed States 31.7 Canada 9., Japan 5.6 U.S.S.R. 4.4 Sweden 4.1 Finland 3-5 United Kingdom 3.3 West Germany 2.14 France 2.1 Italy 1e5 Norway 1.1 1/ Appendixc B contain3 tiMO seri;es data on woodp.ulp consuLmption and production from 194.8 to l965. - -5; 4. World coristaription of woodpulp from 19$14-555 to 19614.65 gi'ew at an average annual rate of 5.7 per cent (Table 16). The highest rate of growth over this period was achieved by Asia (excluding Japan) with more than 16 per cent annually, followed by Japan with almost 12 per cent,, Africa 11.3 per cenit, Central America 9.6 per cent and South America 6.5 per cent. 5;. On the whole, woodpulp consuription in developed countries has been growing at a lower rate tl2an in developing couinries. The highest annual rate of growth in 19545;5 to 1964-65 corresponded to Scandinavia with sligltly more than 8 per cent as compared with.5.2 per cent in Europe (excluding Scandinavia) 5 per cent in the United States, and 2-.4 per cent in Canada. Table 16 WoodpulP Consiption by Area-s 1954-55 to 1964-65 (1000 metric tons) Annual rate of growrth Average Average 1954-55 to -16194-65 Percent Distributior, 1954-55 1964-65 percent 19514-55 1964-65 iq6rth America 2642r.6 L4O500 4.5 58.9 52.5 United States 19,136 31,190 5.0 43.2 40,b4 Canada 6,980 9,310 2.04 15;.7 12.1 Europe excil Scarc-inaTia 8,988 114,967 5.2 20.3 19.14 - Scandinaxvia 3,502- - - 7688.1 7.9 9.9 Japan 1 8; 5,602 11.7 4.2 7.3 A-sia excl. Japan 293 L1333 16.3 0.7 1.7 Latin America 782 1,560 7o1 1.8 2.0 South America 635 1.,190 6.55 1.14 1.5; Central America 147 370 9.6 0.4 0.5; Africa 83 242 11.3 0.2 0.3 Pacific Area 390 631 149 0O9 0.8 Total 42:,012 72,453 5,6 914.9 93.9 iLS.S.R. 2,318 14,694 7,3 5;. 6.1 Grand Tot'41 4),330 77,177 5;e7 l00Q.O 100.0 3ouxce: Appendix B. - 46 - 6. The above table indicates that the relative share of N;orth America in world woodpulp consumption has declined. On the other hand, the corresponding share of Scandinavia has increased mainly because of rising exports of paper products to fast growing European markets. The prox2ndity of Scandinavia to the European markets gives it an important advantage vis-a-vis producers in North America. 7. Rapid economic growth in Japan was accompanied by a substantial increase in its share in total world woodpulp consumption. Asia, excluding Japan,, also showed a significant increase in its share. Other less developed areas, e.g., Latin America and Africa, remained at about the same level. -aper 1/ 8. World consumption of paper in 1965 was about 102.7 million metric tons. The geograplhcal distribution of consumption has maintained the same pattern over the last decade. Most of the demand for paper originates in Europe and North America which account for more than three-quarters of the total. The main consuming countries are also the major producers. The distribution of world consumption in 1965 was as follows: Million Per cent Area or Country tons of total U.S.A. 4h.3 43 Canada 2.8 3 Europe excl. Scandinavia 27.9 27 Scandinavia 3,3 3 Japan 7.3 7 Asia excl. Japan: 5$6 6 Central America 1.2 1 South America 2.2 2 Africa 1.2 1 Pacific area 1.9 2 U.*SoaRw 5.o 5 Totals 102,7 100 9, Eleven countries have anl amnual demand of more than 1 million metric -tons. These countries with their respective consumption figures for 1965 are: 1/ Refers to newsprint, printing and irriting paper, other paper, paperboard and fiberboard. - 47 - Country Million Tons U.S.A. o44..3 Japan 7.3 U.K. 6.14 West Germary 6.0 France 3.5 Canada 2.8 Italy 2.3 Net herlands 1.3 Sweden 1.3 Australia 1.1 10. The relative size of the world markets for paper and their geographical distribution in 1965 was as follows: Market Size Area or Countr (Thousand metr7 tons) More than 1,000 U.S.A., Japan,, U.K-, W. Crernmany, U.S.S.R., France, Canada, Italy, Netherlands, Sweden, Australia 800 to 900 Brazil 700 to 800 Belgium-Luxemibourg, Spain, Mex.co, India 600 to 700 Switzerland 5QO to 600 Denmark, Argentina, S. Africa 1400 to $00 Yugoslavia, Finland,, Austria 300 to 1400 N1ornay 200 to 300 New Zealand, Columbia, Philippines, Taiwan 100 to 200 Ireland, Greece, Portugal, Venezuelap Chile, Peru, Hoing Kong, S. Korea, Turkey, Thailand. Pakistan, Egypb Liss than 100 Iceland, Paraguay, Bolivia, Ecuador. All countries in Certral America (excl. Meico>) All other countries in Asia. All countries in Africa (excl. S. Africa and Egypt). 11. World consumption of paper from 1954-55 to 1964-65 grew at a-n average annual rate of close to 6 per cent (Table 17). Among the various areas the most rapid growth corresponded to Japan (13.9 per cent annually) followed by Asia excluding Japan (11.7 per cent annually). Paper con- sumption in otler less developed areas, e.g., Latin America and Africa; rose fairly rapidly at more than 7 per cent per ann.num. 12. During the saeie period paper consumption1 in iExurope (excluding ScaLdinavia) increa2ed at an annual rate of 6.9 per cent and 6.7 per cent in Scand:inavia, On the other hand, North xmnrica with an aniual growth rate of 3.7 per cent was the only area which grew at a lower rate than the world averagea. 48 - Table 17 Paer Consunption by Areas, 1954-55 to 1964-65 (1000 metric tons) Annual rate of growth Average Average 1954-55 to 1964-65 Percent Distribution Area or Country 195)4-55 1964-65 percent 1954-55 196)4-65 Nbrth America 32,O)b.5 46,069 3e7 56.2 45.9 UnTited States 30,3081 43,235 3.7 54.5 43.1. Canada 1,96g4 2,83)4 3.7 1.7 2.8 Efbrope excl. San aia 13960 27,290 6.9 24.5 27.2 Scandinavia1. 1,6 3C67 6.7 2.8 3.1 Japan 2 010 74O04 13.9 3$5 7.14 Asia exol. Japan 1,813 5,508 11.7 3.2 5.5 Latin America 1,679 3,3145 7.1 2.9 3 -4 South America 1,220 25211 6.1 2.1 2.2 Central America 459 1,134 9$5 0.8 1.2 Africa 596 1,223 7.5 'v.0 1.2 Pacific Area 837 1,638 7.0 1.5 1.6 Total 4 547 95,5)40 5.7 95.6 95.3 U.S.S.R. 24453 4,750 6.8 1414 e4.7 Grand Total 57°000 -0 5.80 100.0 IO.0 Source: Appeiidix B. - 49 13. The geographical distribution of paper consumption from 1954L-55 to 1964-65 shows the most significant inucreases in the shares of Japan and the rest of Asia. On the other hawd, Europe, Latin America airl Africa increased their shares slghtly while NJorth America showed a significant decline. Production by Regions and, Countries - Woodpu metriC 14. World production of woodpulp in 1965 was 78.4 million tons. Production is heavily concerntrated in Nqorth America and Euope which together accounted for 84 per cent of the total. Japan,, another major producer , accounted for some 7 per cent of the total. The rest of the world, which includes practically all developirg countries, contributed only' 9 per cent of total world production (for details see Appandix B, Part 1). 15. Production of woodpulp has been growing substantially faster in developing ountries than developed countries (Table 18); but in absolute terms the- share of developin countrios in total px> uctien is still very smalL Lu 194-55 to l9614r65 the faLstest groing area was Africa with an averare grouth in production of rore than 23 per cent alnual4Y Asia (eX-cljuing Japan) and Latin America also expandcd rapidly with g-annlgOrwth- rane^ of 1$.8 per cent ami. l347 per cent respectively. 16. Over the sanz p'eriod the rates of growth in woodpulp production in dovelqpcd are as (excludi.ng; Tapan) fluctuated butzeen 3 and about 6 per cenit per year. Th is, in Can1 da it was 3 $5% Europe (e=ludingl Scandia-via) IL,.8Hn t', Usnited 5s.14,% and Sod:biaviaa 62%. 17. Europe (excluding Scmndinavnia) has the largest deficit in production and it has le@en increoaing from year to year because of limited availability of wood resources. Thus, while in the early 1950's the ELuopean deficit of woodpulp was about 2.7 million tons, in 1-964-65 it reached a level of 7.0 mil]lion tons per year. 18. The United States is the other major net importer of woodpulp with a ourren.t deficit of 1.3 to l.5 million tons. This coualtryt, however, has vast forest resour -cas on the relative imzportance of the deficit did, in fact, decline fromi about 11 per cont of domostic wocdplulp produe- tion in the early 2.2Osato some 5 per cent in l1.964.65. 19. Scandinavia has the l.a-gest production surplus which 7in 196h6$5 -reachod approximate-ly 6.3 m-llion tons. T rtholcss, the share of this oulrp1..u :in S 2nzilian wcodpizp prcduction- cllC d from about, 55 per cent in 1950-52 to oinr!o 45 per coi.t in 1964-6$5 This rIed3actioin is partly exryLadmcd by Irge:L- production of paperr.'cduct.t o export. - fO ' Table 18 Woodpulp Production bsAreas, l954.-5 and 1964-65 (1000 metric tons) Arntnal rate Average Avrerage of grovith Per cent Distribuition. Area 1954-55 196465 (peent) 1954-55 1964-65 North America 26,682 h2 472 4.8 60o2 55.2 ied 2tates 39.9 Canada 8,992 129662 3.5 20.3 16.4 Europe excl . Sca.ndinavia 5,014 80 4.8 11.3 10.4 Scati>.--avia 7,594 13,921 6.2 1701 18.1 Japern 1,762 5,090 112 4,0 6.6 A;ia. excl. Japan 234 02 15.8 0$5 1.3 Latin America 284 1,9.8 14.7 0.6 1.5 Sou tca 203 T7 0 =11 Cent:r -' America 81 243 1le6 0,2 0,4 Africa 54 445 23$5 0.1 0o6 Pacific Area 330 455 3.3 0.7 o.6 Total 41,954 72,515 5.6 94$5 94.3 U.S.S R. 2 40339 6.1 5$ Grand Total 44,355 76,884 5.7 100.0 100l 0 Source: FAD, Yearbook of Forest Products Statistics. 20. The deficit in woodpulp of Japan has risen -fromabout 0.1 million tons in l953-54 to 0$5 million, tons in 1964-65, mainly because of scarcity of domestic wood* Other areas wvi-th production deficits are Latin America and the Pacific. On the other hand,, Africa shows a production surplus which has been rising- conlt,inuously since 1957 (for details see Appendix B), 21. The -gowing demand for woodpulp and the limited wood resources of many European countries and Japan could offer a potential imiarket for the less developed rogionis. Iot;ever, the future role of less developed areas as exporters of woodpul.p is closelr linked to whatever progress is maade in the economics of amanufactur,:ing, to use rixed tropical hardwoodo for pu2ping. 22. W4orld production of paper in 1965 reached a peak of 102.8 millon tons. The geographical distribution of paper production is very similar to tlat of woodpulp. Thlus, North America accounted for 48 per cent of tei total, Europe 31 per cent,, Japan 7 per cent and U.S.S.R. 5 per cent. The remaining 9 per cent was distributed among Latin America , Africa, Asia excluding Japan and the Pacific Area (f.or details see Appendix B, Part II) 23, Fom 195455 to 1964-65 paper production in most developing areas has gronn quite rapidly at annual rates fluctuating from 9 to about 14 per cent (Table 19). 24. Rapid growth of paper production in developing coumtries has tended to reduce their dependence on imn;ports. on the whole, however, they still depend on imports for a substant:ial port-ion of their total paper requirements. Developing countries have not yet been able bo develop adequately their forest resources for the production of pulp and paper products. Today Central America and Africa consume about 62 per cent more paper than they produce., South Amrica 35 per cent more, and Asia (,&-cluding Japan) 22 per cent more. 1/ 25. Paper product:.on in industrialized countries, during the same period, grew particularly fast in Japan (14.5 per cent anmually). The growth rates were substantiallr low.-er in other devcelo,:--d areas, e.g. Scandinavia 8.1 par cent, Europe excluding Scandinavia 5.8 per cent., and North America 3.9 per cent. 26, The United States has a deficit in paper production wlhich in 1963-65 was equivalent to approximately 12 per cent of' total domestic production. Tis country is the most imnportant importer of paper with 4.6 million tons in 1965. 27. Europe (excl. Scarndinavia) also has a deficit in paper produLc- tion i:hich in 1963-65 remained at about 20 per cent of total produictionl. In absolute terms, however, the Europeain deficit has been continuously rising from 0,3-0.5 million tons in the earl-y 1950's -to abouLit L4..5 nillion tons in 1964-65. The ratio of' imtports to consumlption rose from 4 per cent in 1950-52 to 16 per cent in 196h4-65. This growing marklet, for both woodpulp and paper could offer opportunities f'or developing contbries able to sell at competitive prices. 28. As a result of' the above trends, the following areas increased their share in total world papc-r production: Scmwdinavia, Japan, Asia excluding Japan, Africa and to a lesser exent Latin America and the Pacific. On the other hajid, the share of' North America dccli nod. Europe excludinig ScandlLinaria maintained the same relative position. 1/ Appcndi% A shows world trcnsWi by area in paper consumption and produc- tion (as well as ncwsprint cons,umrption) from l2"48 to 1965. - 52 Table 19 er oduction- by Areas 19545 and 1964-6 (1000 metric tons) A.nnual rate Average Averrage of gro-Ath Per cent Distribution Area 1954-55 1964-65 . r ce;nt) 1954-55 196465 North America 32 975 48,137 3e9 57.7 47.7 United States 2 3 3B77 If 0T 3 Canada 7.,102 99410 2.9 12.4 9.3 Europe excl. Scndinavia 12,91 4 22,742 5.8 22.7 22.5 Scandinavia 3,830 8,378 8.1 6.7 8.3 Japan 2,081 8,042 14,5 3.6 8.0 Asia excl. JapaM 1,202 4,531 14.2 2.1 4.5 Latin America l,0l5 2,401 9.0 1.8 2.4 South America 748 1,700 8.6 1.3 1.7 Central America 267 701 10.1 0.L5 07 Africa 229 822 13 .6 0,4 0.8 Pacific Area 473 1,213 9.9 0.8 1.2 Total 54,749 2 5.8 95.8 95,4 U.S.S.R. 2,391 4,598 6.7 4.2 4,6 Grand Tolal 57,140 00,86L 5.8 100.0 100.0 Source: FAO, Yearbook of Forest Products Statistics. International Trade 29, Pulp and paper are valuable and important products traded in international markets. World exports of these products during 1955-65 have shown little variation from an average of 16-17 per cent of total world prod.uction (Table 20)e In termo of value, they amounted bo $434 billion in 1965 or abo-ut 2.3 per cen1t of total world exports. Exports of pulp and paper prdiucts are heavily concentrated in -. group of five developed countries Exports from developing countries, in the same year, were very small, amounting to only $90 million, as compared w^rith their principal ex:ports: $9.8 bill-on for petroleuma, $2.2 billUon for cof fe, 'Pl.4 bi 3Lon for s $1.3 bd52lion Lor coppor, and. $1.2 billion for rubbar. Table 20 Cornarison of World Production and l ort Trade - 1913 to 1965 (million metric tons) 1913 1925-27 1937 1950 1955 1958 1959 1964 1965 Paper and Board A.-World production 11.9 19.0 30.2 1447 60.7 66.4 73.0 98.2 102.8 Be.World exports 2.2 4.4 6.3 7.9 10.3 10.9 11.7 16.6 17.5 C. Ratio B:A (per centl) 8,,5 23.2 20.9 17.8 17.0 16$5 16.1 16.9 17.0 D., Ratio B:A excl. Bloc /a (per cent) 17$5 16.9 17.6 17.1 16.? 16.7 6 6 E.. World production 8.3 13.6 23.8 33.7 4L. 50.3 55.0 75.4. 78.1 F. World exports 2.1 3.6 6.3 e.8 7.6 7.7 8$S 13.2 13.8 G. Ratio F:E (per cerrb) 25.3 26$5 26$5 17.2 16.3 15.3 3,55 17e 17.7 Li. Ratio F:E excli Bloc /a (per cent) 17.8 17.1 15.9 :16.2 12.0 l1.6 /a i.e., excl, USSR and Hainland China on].y. /b Excludes pulp from materials other than wood, includes rayon puLlp. Sources: 1913-1937: Streyffert, World Timber. 195o-19656: FA, YearbooKci7' Forest Products Statistics. 30. Abouti 90 per cent of total world exports 1/ of woodpulp are accoixnted for by" five countries which iii order of importance are: Canada, Sweden, Fiinland, United States, 2/ and Norway. 31. Approximately three quarters of Canadian exports of woodpulp are sold in the UIniited States. On bhe other hand, Sweden, Finland and especially Niorway, sell more than three quarters of their exports in Europenm markelts. These countries also export a small proportion of tlheir output to deve.loping countries in Latin Afmerica, Asia, Africa, and the Pacific Areca. 1/ T'le ana2ysis of world tvado is based on data for l965. For details on each indi:Lvd.ual coilit-r3r and bhe floT of tradc see Appendix A, Tb,3LcS 5 anrld 6, ¢and Apr.cpCix.u-b B., Part .1 and Part II. 2/ tThites Stateo is one of the a,irain eportors of pulp and pap'>r produots but, it imporbs crein L1argcr qcp1.nubiiU;s and, tlierl7ore, it is a net I:n; ortor 32. The five largest exporters of woodpulp also account for more than three quarbers of world exports of paper and paper products. Canada is also the main exporter of paper and sells more than four-fifths of its exports in the Unitbed States; another 10 per cent is exported to Europe and tlhe remaining 8 per cent is distributed among the devreloping countries. 33. Finland is the second largest world oeporter of paper with a volume of less than half thalt of Canada. About tro-thirds of its paper ex3ports are sold in Elurope wTith West Germany and the United Kingdom as its biggest customers. The rest is sold. in the United States (10%), U.SOS.R. (6%), and other non-European count-ries (17%). 34, Sweden, the third largest exporter of paper, also sells mainly in Western European marlets (83 per cent of the total), especially in West Germany-, the United lingdom and to a lesser extent in France. Only 12 per cent of Swedish paper exports go to non-EDropean markets. 35. The United States is the fourth largest exporter but its trade, in contrast with the otlher main exporters, represents a small port:ion of its total domestic produc*-ion (less than 5 per cent). m'ore than half of United States exports are purchased by Europe (43%) and Canada (8%). The other half is distributed between a Large number of non-Puropean countries. 36. Norway exports a large proportLon of its domestic production although its exports represelnt less than half of the amount exported by the UnIted States. About three-quarers of Nor-wegian paper exports are sold in Euopean cowitries. 37. Canada and. Scandinavia account fo-r practically the entire world surplus of paper (Table 21). Japan produces enoug.ch tio cover domestlic consumption plus a very modest export surplus. United States is both the main producer and importer. Europe excludiing Scandinavia is a net importer w7ith a deficit equal to that of the United States. Asia (excluding Japan), South America, Central America, Africa, anid the Pacific Area all have a deficiit ranging from 0.4 to 1.0 million metric tons each. 1/ 38n The trends in regional demand-supply balances from 195). to 1964-65 (Table 21) indicate that: a) The relative shares of woodpif3lp a-nd paper in total trade :ren.i:.cd about the same le3vel (45 per cen.t and 55 per cent respectiLvely). b) Scand()innvian e-lorts expandeId substantial4r more thma those of Canada, e;sp.ciJal.Iy in paper and paper products4 I/ The U.¢.StR., duiring the Jast dac!d(o,,, has prc-tlcucd synall surpluses or deficits w-hi1cllh orn t;he atxr.i go have b rIh.nLTcc,,- d cubt. c) European inports (excluding Scandinavia) of both woodpulp and paper rose very sharply mainly because of Limited wood resources. For the same reason Japanese imports., though of pulp? only, also show a considerable increas;e. d) United States imports of both pulp and paper remaained at about the sane level but their share in domestic production decined. e) Asia, excluding Japan and Central America showed a sizeable increase in imw-orts despite their vast forest resources (tropical hardiiood mnainnly). f) 'The deficits of South America, Africa and the Pacific Area changed only slighhtly and their imports declined relative to total domestic consumption. Table 21 aances of 6 6 Woodnulp and Pa er, 1954.-55 and 19 4-5 Million Tons 1954-55 1964-65 WJoodpulp Papewraei Tlrotal w WoodpuIpiPT'Mf-r~- 17 ._T_17- 11.9 21A4 Surplus Regions 6.1 7,3 13.4 9.5 Canada 2.0 5.1 7.1 3.3 6.6 9,9 Scandinacvia 4.1 2.2 6.3 6.2 5.3 11.5 -2104 Deficit Regions -6o2 -7.2 -1304 -9.t7 -11,7 -4.0 -1.0 -5.0 -7.1 -4.6 -11.7 Europe, e-cl. Seandi-navia -5.9 United States -1.4 -4.2 -5G6 -1.4 -4.5 -0.1 +0.1 .0 -0.5 +0.2 -0.3 Japan -1.3 Asia, exclutding Japan -0.1 -o°.6 -.7 -0.3 -1.0 -0.4 -0.5 -.9 -0.3 -0.5 -0o8 South America -0,4 0.5 Central kmerica -0.1 -0.2 -. 3 -01 -0.0 -0.4 -. 4 +0.2 -0.5 -03 Africa -o06 Pacific Area -0.1 -0Oo4 -. 5 -00.2 0.110 Source: Appendix B. Per Capita Consumpption of Paper is more 39. The world's average per capita consumption of paper kilograms but it var-ies very substantially from country to than 31 was (Table 22). Consumtion per capita in the United States country ard below 1 222 kilograms in 1964-65, in West Germany 100 kilograms,, per capita kilogram in most developing coultries with less than $100 income. 1/ Table 22 t os n of Pa r, , 1964-65 Kilograms of Area paper per capita GNP per capita, 1965 Range Range North America 139 - 222 $2,100 - 3S,240 Western Europe 13 1555 $ 367 - 2,127 Asia /a 0.8 46 $ 614- 497 Latin America 0.9 - 26 $ 188 - 828 Africa ,-b Ol - 6 $ 40 - 253 and /a E:cluding Japan with a cons-umption of 74 Kgs., $765 GNP per capita. Kgs., and /b Ex.cluding South Africa with a consumption of 32 $523 GNXTP per capita. Source: Appendix A, Tables 7 -bhrough 10. with respect to 40. The elasticity of demand for paper products items as food, income and population is normally higher than for suLch prepared by beverages, clothling, and footwear. According to a study is very the United Nations the value added by the paper industry exbeint to responsive to levels of per capita income and to a lesser It was est-imated that, on the average, for all population size. 2/ by courntries, a 1 per cent increase in per capita income is accompanied industry. about a 2 per ceint increase in the value added by the paper Siritilaorly, a 1 por cent iinorease in popuLation, with income held constant, added. would n-ormally result in a 1.1 per cent increase in the value 1/ Average 196L-65 for a sanr(pl of 105 coumnries. York 1963, p. 7. 2/ United INations. A Stludy of Industrial Growth, ITew - 57 - 41. Both the level and rate of growth in paper consumption are closely related to the level and rate of grouth in national product. Consunmtion of paper is also influenced by habits anid customs of society, income distribution, and degree of literacy. Variations in these factors between countries tend bo affect the responsiveness of paper consumption to the level of national product. For these reasons it was considered appropriate to divide the world into four distinct geographical areas with economic anid social characteristics more closely related than in a worldwide presentation. 1/ 42. For purposes of comparison,, however, the relationship for the enitire world sample was also calculated. The regression (see TPable 11, Statistical Appendix) indicated that about 86 per cent of the fluctuations in paper consumption are accounted for by variations in per capita GNP. Despite the large degree of correlation the location of the obser- vations around the regression line indicates that the standard error of estiimate is rather h:igh (see Graplh VI). The large size of the deviations, especially in low-income countrios, points out the weakness of the worldiwide sample for purpo3es of projecting future demand. Thie four regional equations (see Table 11, Statistical Appendi) provide a more realistic view of the interaction between the relevant variables. 43. The results for the regional equations show that factors other than income play a mor-e important role in detcrmnining paper consimr,ption in developing courtries than in developed countries. Thus the unexplained variance is on.y 8 per cent in the regressi on eauation: for North America anld lesternn Erope as compared with $0 per cent for Africa, h.2 per cent in Latini America, and 23 per cent in Asia (Table 11, Statistical Appendix). This is also confirmed by the larger standard errors of estimate of the developing regions. But on the vlhole the results are statistically significant and show a reasonacble description of the relationship betweein paper consumption and the level of incom-e The scattter dicngr.rr-r shou sying the characteristics of each regioon are portrayed in Grapihs VI through X. l44. The elasticities of demand for paper in the several area,s-, based on a cross-section analysis of courntries at different levels of income, range from 1.29 to 1.66 (Table 11, Statistical Appendix). On the average a given percentage increase in income will normally be acconpanied by a proportionally larger increase in tbhe amount of. paper consumption. of course each individual country may deviate from tho average patterni because of its ovTn pecuLiaritics and stage of developmen. The calculated average values, of the elasticities f or each region are: Area Elasticity World (105 countries) 159 North America & Europo 1.29 Latin Annmrica 1.66 Asia l.43 A:rica 1.50 1/ 7'IJe Cou.tricm, i nclidcd in rerch rogr,iori arind dct,a ucod for thoe calcu.- ;itiolls 'are givon in the 5ati,sltic.l. Airi TLab.'1n s tbvc.vgrt 10. 45. Graph XI shows a comparison of the various estimating equations. Here it can be seen hoow each region is related to the others and to the world sample. The slope of each regression line reflects the value of its e:lasticity. Its relatiive position inclicates the responsiveness of paper consumption to the levels of per capita income in each region. International Prices of Pulo anid Paper Products 46. International trade in pulp and paper products is very competi- tive. Firms competling in this market operate large mills, highly automated and malding maxinum use of the economies of scale in production. Small mills either inytegrated or non-integrated, have significantly liigher costs than large mills and cannot compete in international markets. 47. Keen competition, innovations in production methods, and better admi.nistration have helped to maintain low prices in international markets. TI. fact, average prices, expressed in constant dollars, of United States pulp imports from Canada generally show a gradual downward long-term trend since 1953 (Table 23). 4t8. Competition in woodpulp between major world producers is very intensive. Tariffs on wJoodpulp in developed countries are either non- existent or very low. 1/ Tariffs thus do not constitute a barrier to exports from countries able to produce woodpulp at competitive prices. Unibed Statrps dcmstic prices of woodpulp are practically equal to import priccs (Table 24). in the United Kingdoma prices of imported ioodpulp are also very similar to thiose in the United Stat;es. Variations in the cost of imported woodpulp at the mill seem to be mainly deterilined by differences in inland transport costs and the ability to obtain special discounts on purchases of large quantities. 49. The market for newsprint, a major item in international trade, is also very competitive. There is almos-b complete free trade between North Amer-ica and Western Europoe. 2/ Intiernational competition has helped to maintain newsprint prices in line. Thus the average price of Canadian newsprint in the United States market remained at US$134 per ton betwJeen 1957 and 1965. in 1966 the price rose to US$137 per ton. 3/ Some quotations available for 1968 indicate that major world producers, i.e.,, 1/ There are no import dutics in the United States, United IKingdom and European Free rfrade Association. The Europecan Common Mlarket had a tariff of 6 per cent in 1967 !hlich as a result of the Ken.naedy Round in that year was reduced by 4o per' cent as of July 1, 1968, and it will declinie to 3 per cont by Janulary 1, 1970. Probably by 1972 woodpuLp will be entirely duty free. 2/ Newspr:unt has no import duby in the United States, United Kingdolml allnd European Flriee Trad.e Association. The European 'Common Thirket hz.1 a 7 per cent duty applicable to :imiports ,above a duby-froe quota of 6 25,000 tonls J/fJDomii2ion LJurtcau of ,Statistics, CnnnrdrI. Canada, Scandinavia and United States, were selling newsprint in the United Kingdom and United States markets at prices betw-yeen US$251 and US$J56 per ton (Table 13, St-atistical Appendix). 50. Prices of paper products genera:ly fluctuate more waidely both in domestic and international markets than those for woodpulp. In the United States most prices of major paper products, measured in constant dollars, show a slight decline from 1964 to 1966 and a slow but continuous rise from 1966 to 1968 (Table 25). The largest price increases took place in writin", paper, wrapping paper, some gradies of book paper, and wood bond paper. On the obher hand, alight price reductions occurred in waxing paper, and wrapping tissu3e. 51. Tables 13 and 14 in the statistical appendix contain additional informatioon OI current import and domestic prices in the United States and the United Kingdom for various types of paper and paperboard products (mechanical printings, bleached and unibleached Kraft papers, linerboard, container board, boxboard, etc.). Table 23 Average Value Per Ton of United States Pulp lmports from Canada, 1953-65 U.S. dollars at 1958 prices /a Unibleached & Bleached Sulphite Unbleached Bleached Sulphate Semi-bleached Year Paper Grades Suiphite Paper GCrades S h Nchanrdal l953 146.3 120.8 147.6 115.6 79.7 1954 143 ¢9 1:16 .1 1143e4 1 L7 e8 7 9 . 1955 1-46.4 122.8 149.2 121.8 80.1 L.956 148.1 123.2 148.7 120.6 78.8 1957 149.2 123.3 146.1 110.1 75.4 1958 15J,8 124.7 144.3 103.2 74.6 195;9 147.7 126$5 145.2 102.8 74$5' 1960 141.7 125.8 140.7 109.4 74.8 1961 136.7 110.2 132$5 117.7 73.e 1962 126.6 107o3 128.1 l1.e9 69.7 1963 122$5 105.4 128$5 116.8 66.3 1964 128.9 108$ 135r.7 124.6 69$5 1,965 129.3 1Q7$5 134.4 121.8 69.4 /a Current prices deflated by U.S. -index of 1holesale Prices 1958 - 100, Source: United States Pulp Producers Association. 60 - Table 21, Domestic and Import Prices of Woodpulp in the Unlited States and the United Jingdom (US $ per metric ton), May-Juaie 1968 United States Market /a Unaited Kingdom Type Domestic Canau,"Lan Scandinavian )Sarket /b Bleached Kraf l50-155 155 155 147 Semi-bleached Kraf t; 141-i441419 146-149 Unbleached Kraft 21-130 122-130 127-130 124 Bleached Sulphite 142-147 14 2 -47 JL.2-147 143 U3ableached Sulphite 115-129 125-129 129 129 G3 oundmWrood 85 85 80 /c /a Average deliverod price East of the Rockies. /b Average import price in U.K. ports. /c- Dry groundicood on dock. Source: "Pulp and Paper" (May 20, 1968, p. 48), and ''The World's Paper Thade Review" (June 13, 1968, p. 1506). Table 25 United States - Average W^4holesale Prices Per Metric Ton of Selected Paper Prodicts. 1964-1968 U.S. dollars at 1958 prices /a 1964 1965 1966 1967 1968 Index Price Index Category Price Index Price Index Price Index Price 365.7 99.6 372.14 101.14 Book paper, A grade 367.1 100.0 363.5 99.0 364.3 99.2 14oo.o 102.6 L03.9 103.6 Book paper, 'No. 2 plain offset 389.8 100.0 99.6 100.8 398.2 102.7 Wood Bond 387.6 100.0 384.4 99.2 385.9 390.7 620.14 101.9 6146.3 106.1 viriting paper 609.1 l1o00 613.14 100.7 611.9 100.5 102$5 206.0 1014.3 'rapping paper 197.6 100.0 207.8 105.2 200.0 101.2 202$5 99.4 249.0 101$5 Butcher's paper 245.3 100.0 246.9 100.7 242$5 98.9 243.8 96.3 334.7 97.8 Waxing paper 342.2 100.0 339.1 99.1 3295 96.3 329.5 2.4 96.0 2.5 100.0 2.4 96.0 Wrapping tissue ($ rean) 2.5 100.0 2.5 100.0 /a Current prices deflated by U.S. Index of W1holesale Prices 1958 - 100. US Dpatment Source: "Pulp, Paper and Board", Quarterly Industr- Report, Januaary 1966, 1967, 1968, 1969, o.f Conmerce/Business and Defense Service Administration. GRAPH VI WORLD 62- RELATIONSHIP BETWEEN PAPER CONSUMPTION PER CAPITA, 1964-65 AND GROSS NATIONAL PRODUCT PER CAPITA, 1965 4000 .- - -- §1171] AoFRICA 0USAo ASIA ----- ,-.------. 200.0 ^ * LATIN AMERICA - - 0 NORTH AMERICA AN4D EUROPE SD UK0 DK CNz I0.1...... - EL 80.0 --- II ID 60-...... --~--- .- - -~ ~ ID, -H AS--- - 40.D~ V 1 .1 1-...... 1 HK T/ -t S-1 A -- t QSA 15 30.0 - jAS ------0. UR A ______TA _ _ A OI SP_ i io X lPIi GR s ~ ~ ~ ~ ~ Cov GT 0 HD BZ I0 10- - ---M -, -.------. U..--- !- +I iR - + 8.O ,- i, t t __ _t_ _ ---- t I PR 6.0 -- -I- 3.40~ I ~t-- --~1'-E4Ij~ tI 1WH -Qt X I.I-E 111- - DR t -. --- - -__- U-, z1- -| TH,_t_A CEK--S Y 11t T U - A SLA SYA G 0420 i 1 1I T! T. /E PAE ReAIR I 1 1 I. Ii I 2I I so I * A SU ACM LI SW 1,0 . /E- ---- 0 .- 1 ----- BB .J 'U 8 - A I -- -! . - 1- - ! . t -4..-. F CARM OCA-.IH- - . .6 TZ UG _ OCA . 4 ... ,,Iw" ET A .3711 -.. '1 22* GA tf - 1-t-- -t I~| \ HI...... MA -4 .. .2 |...-- ^-- -. ;I - -tL I ~~CDa , G1 - i LOGARITHMIC SCALES iO 20 30 40 60 80 100 200 300 400 600 8001,000 2,000 3,000 4,000 1965 - GNP PERCAPITA - (J.S. DOLLARS .IRD-- 3d I 63 - GRAPi VII NORTH AMERICA AND WESTERN EUROPE RELATIONSHIP BETWEEN PAPER CONSUMPTION PER CAPITA, 1964-65 AND GROSS NATIONAL PRODUCT PER CAPITA, 1965 _ _ _, 1'-- ' I -.- - - - ._- _____ -1-*------.--.------_ _- _-.-- 7- _ _ USA 0 UK OKCN ____ND 0W 0 SZ D_ __.L __ /RC LUO 2.O6, - rx 1- _-__--l-C GR|-l- - , . o0 6 aPo ___ __0 7-2 ZZIIei-I- -y - Ce IC ______I Y I I I I I POj Z- ,1 _ _ '_ I_ X - _ 0~ X II I - 0- qo 1 16'APITA-U.S1j{l GN P'- l DOLLARS 1E1 -.- ___------_ _---- ___<------__-- l-- o/ Io 6|1ZO 110 (I 6110 11/0I/1 /0 -2 - -- 0, go to qoi 0 /O - 4t0 X 1965 - GNP PER CAPITA-U.S. DOLLARS sm",l ce-: IBRD - 3636(R) -64- GRAPH VIII LATIN AMERICA RELATIONSHI P BETWEEN PAPER CONSUMPTION PER CAPITA, 1964-65 AND GROSS NATIONAL PRODUCT PER CAPITA, 1965 '' 'I- - - 1- -__ . _ - - -_ _ - _- - - IC''.CiV.------. _---_ Z.9 liii- *vz K)6CO -t -- CO PR P LJf IW PR /DR ) I ! -- 1-- -I-- I. -- NCX-WFC I I1IPA I ------I- -- . -- - - _ _ _ ------B -O r - - , O - 1- .- -- IL .S 4t-J _ _ - - - - ___ /0 -20 40 60 so (00o O° qOO 600 /o x 2: 1965 - GNP PER CAPITA- U.S. DOLLARS Source: r BRD 3635(R) AFRICAR RELATIONSHIP BETWEEN PAPER CONSUMPTION PER CAPITA, 1964-65 AND GROSS NATIONAL PRODUCT PER CAPITA, 1965 * .25s), - ~ -...- - - -- a r .9-h -/)- - '0/ ;1- 6. *------.- -- -_ -___-- - 40.0 SA - - --.- X * . l-- - C)! /H* . *-6 0- - _ - _ _. _-. CL If ,1%0= -*--- -- 1---] - 0- T O 4(1 - - ' L7X{W (I IjAN3I I ICI I I 0 E OK -l _ _ _ _ _ GLJ A 0 CCD MI Su SW / UiVX MAQ2 ,'AO2. (,Q6° /00 Zao fL0 oo ie/oo Zdoo;J J.965 - GNP PER? CAPITA U.S. DOLLARS SoJI * \ [E3F L) - 3(-5 F -66 GiUPb l ASIA RELATIONSHIP BETWEEN PAPER CONSUMPTION PER CAPITA, 1964-65 AND GROSS NATIONAL PRODUCT PER CAPITA, 1965 /o tI -- * - ___-- r - - e@ w- (Or e2 .- |----- h--.-- - _ _ __ - A.--.-- ~r 11-- 11-- 1| 1|-___Lll 11 - 1 LE TA -1 -r - - ___ CL, ~ -, 20. -- ___ - --- 0- I IIR --- I;-----/E l- HTttr A I I LAyIN B AAPK ACM I IA .. I.. ___.t..,...... x.J...... -.-. 1E 0 0 Oo £0 0 -JG 0,004 600 /00 -S,x Z/0 1965 - GNP PER CAPITA - U.S, DOLLARS Sourcc: IBRD - 3634(R) - 67 - GRAPH Xi WORLD (REGIONAL COMPARISON) RELATIONSHi P BE TWEEN PA PE R CO NS UM PT 10 N PER CAPITA, 1964-65 AND GROSS NATIONAL PRODUCT PER CAPITA, 1965 400.0 . - - - - ii--ri-tm- 300.0 WORLD 200.0 ------ LATIN AMERICA- 100.0 80.0 ------ 60.0 LO 40.0 - - t____ -- < 20 .0 --tIrlY-T u NORTH AMERICA & EUROPE AFRICA ,,, 10.0 -II II1 - 1 - 0L 8.0 | -... I'-1 J - = Ii - o - 1- 1 1 _ = _ z 4, 0 I m 2.0 z 0 U ASIA IL I 1 101 1 |I111 1 .0 . >r n 1 _ 1___ _ I_ t__ _ _ _I_5 -- tL ,8__ - - t - i - - i§ - - .6 l11 - .4 _ _8 M _--_ .3 _ _ _t{4r-t--| .2 _ _ _ _ _ |_- /I/ LOGARITHMIC SCAL.ES .1~ - L 10 20 30 40 60 80 100 200 300 400 600 800 1,000 2,000 3,000 4,000 1965 - GNP PER CAPITA - U.S.DOLLARS 3OlJURCvE: 13RD - 4624 - 68 STATISTICAL APPENDIX TABLES Page No. TABLE I Chxercal3 Used in the Manufacture of' Pulp 69 2. Inflience of Tyrpe and Size of Pulp and Paper Idills on Fi2ced Investmnent 70 3 Nihf Size Related -o the Cost of aoduction of Newsprint Using Coniferous Pulp-wood in the USA and Latin Anaerica 71 4 Cost Strxture in Developing Countries - Relative importance of Various Cost Items in the Production of Pulp and Paper foar a YNll of 100 TorLs Daily Capacity 72 j "World &orts of' WoodpuDp by Country and Area, 1965 73 6 .Exorts of Paper and Paper Products by OECD CouLtries, 1965 74 7 I,.QRVT1T ATIRICA ndh TESTERN TfOETTFPE - Per Capita Consumtion of Paper and Board 1964-65, and C1oss National roduict, 1965 75 8 LATIN AIERICA - Per Capita Consuption of Paper and 'Board. i964-65 md aross iltional Produc-tX. 1265 76 9 ASI1A - Per Capita Consumption of Paper anL Board, 1964-6S5 and Gross Waional Product, 1965 77 10 ARICA Per Capita ConsQ2ption of Paper axd Board, 1.9614.65 and Gross NTational Product, 196¢.l9787 78-79OSNa;O =;S 95 l CorrelatLion Between Paper Gao-suptioaQY 19aL-65 and Gross National Prc1uct, g96- CalouvJzted Regression 3qua-tions 80 12 Pulp comd Pric's in. the United StatesJ, by Selected Species, 1950-67 81 13 Prices of' Paper Products in the United Kingdom, August 31968 82 14 UnLit-ed Statcs - Amxounced Pap3rboard PI-ices, Delivered Pric;cs2 fcr -ieelk orx)Ied Tusdy-,y August 13, 1968 83 AkPENDIX A Table 1 Chemicals Used in ti,ie Manufacture of' *ul /a Chemicals (pounds per ton of air-dry pulp) Kind of stic Salt Hydrated Soa Kind of pulp wood Soda Cake Limestone lime Chlorine Sulffur ash Sulfite: Unbleached Softwood - 135.9 - - 108.7 - Bleached ...deo... 9.1 - 149.5 36.2 514. 117.8 - SulRfate: Unbleached ...do.,,. - 815 27.2 - - - - Bleached ...do... 27.2 90.6 29.9 27.2 72.5 - - Unbleached Broad leaved - 72e5 24.5 - - Bleached ...do... 27.2 81.5 27.2 18.1 54- 4 Sulfate semichemical /d Softwood - 40.8 13.6 - - Do. /d Broad leaved - 36.2 12.2 - - - YNerutral sulfite semiichemical:Ab ... do... - 123.2 Unbleached .,.do... - - - 25.4 Bleached ... do... 19.00 - 36.2 1234.2 48.9 208.h Cold soda chemimmchanical:/b Unbleached soda7c ...do,.. 90.6 ------Bleached ...do... 27.2 - 27.2 18.1 54.4 72.5 /a The amounts given have general application only. They wil vary from mill to mill. Original figures in pounds per ton were converted into kilogr'ams. /b Without recovery of chemicals. /c Complete alkali recovery and lime reburning. /d Recovery of chemicals integrated -1ith that of a sulfate mill. Source: IRawri aterials for INore Paper,"t FAOQ, Forestry and Forest Products Study No. 6, April 1, 1953 (Columbia University reS3s, Liternational Documents Service, New York, N.Y.). APPENDIX A Table 2 Influence of Type and Size of Pulp and Paper Mills on Fixed Investment Costs are in U.S. Dollars D A I L! C A P A C I T T I N ME T R I C T 0 N S 200 Metric Tons 50 Tons 100 Metric Tons 25 Metric Tons -etric Total Fixed Total Fixed - Total Fixed Total Fixed Cost Investment Equipment Cost Investment In:vestmant FEcitment Cost Ir estment Equipment Equippment Cost Pe y FAS Pozt Total Per s Port Tta Per Daily FAS Port Tatal FAS Port. Total Per Daily Ton of Shinnent M=on Ton of Ship=nt Mill ion Ton cf ShIpment PEIfion of ShiFaent MiLlion Ton Million : $100 -. ______Million $ $ $1000 __l__cn T $COI ______0 Non -integrated unbleached 135 11.0 21.1 105 4.6 8.8 175 7.0 13.h cnezical puin 3.0 5.8 235 -Uleached 190 15.5 29.8 150 '.on-inaegrated 6.3 12.1 210 9.9 19.0 cheical puljp 4.2 8.1 325 180 1h.7 28.2 1140 6.0 11.5 230 9.3 17.9 Inegrated unbleached paper 3.9 7.5 300 18.5 36.9 185 11.8 h1.8 295 11.8 23.5 235 rnterated ileached paper 5.1 9.8 350 pulp. The equipmnent costs are based on an plant is included in the case of mills manmucturing bleached lzte: T,L' ahove mills are self-comItained in porer5 electrolytic of These estimates do not include working capital. Niorth American prices, export boxed, delivered to the port shipmsnt. 1960. Pulp and Paper Development in Asia and the Far East - Tokyo, 17-31 October, Sot.rce: Secretarial Paper VIII (a) Presented at Conference on APPENIIX A Tabnle 3 Mill Size Related to Cost of Prodvuction of Newspri-,. Using Coniferous ?ul;D)oc'i in U.S.A. and Latin Aknerica (.A.)/ (U.S . Dollars) and Taxes Total In ex Newsprin V ar,ab-e Direct Cost R.elatively Fixed Cost Interest,, Profits Ton I0'o Ton3 eer Dav Pe TFOn Per Ton PeronPer - U.S. U.S. L.A. _ _U.3. L 4.A1-. L.A. . 166 100 100 100 L5 70 2d c 71 71 lLh 1260 L' 89 88 230 25 2? 56 56 117 lLO0 84 82 300 70 23 21 L9 IJ 77 Lc 1±5 70 22 19 LL 1- 111 133 80 106 129 78 74 500 15 70 20 1B 1 Li 1954±). 1/ 3 .k- EconomiOdCs of Newscrint Production by P.R. Sandwell (October insurance, proper:y Capitc-. charges" cver depreciazion to the extent allwed by incore tax laws, of borrowed funds taxes and dividencJs fi-gured at 65. The assumption made regarding the proportion minimun pre-profi: to equitvt is not indicated. Apparently nc allowance has been maie fcr certain reservations. -72- APPENDIX A Table 4 Cost Structure in Develoin_ Countries - Relative rtance of Various Cost Items in the Production of Pulp and Paper f or a Mill of about; 100 Tons Daily Capacity ---- Percentage of the Total Production Cost at the Mill----- Fibrous Other Power Labor Super- raw Chemi- Mater- Steam incl. vision Capital Process materials cals ials & Water repair overhead Costs Non-' eated Unble ached sulphate pulp (conifers) 50 4 3 2 7 6 28 Bleached sulphate pulp (conifers) 43 12 3 4 6 5 27 Bleached sulphate pulp (broad-leaved wood) 35 14 3 5 8 6 29 Bleached sulphate pul p (straw) 32 15 3 5 8 7 30 Integrated Mechanical pulp 4° - 3 21 7 5 24 Chemical ground wood 29 12 3 18 7 5 26 Unbleache& NSSC pulp (broad-leaved wood) 36 3 4 12 9 5 31 Bleached NSSC pulp /a (broad-leaved wooTJ 32 18 3 10 7 4 28 Newsprint, mechaniical pul]p 39 - 4 15 9 5 28 NSSC /b- corrugating board 31 3 5 13 9 5 34 /a Total percentages for this process add up to 102 in original data. /b `tith recovery of chemicals: NSSC - neutral sulphite semi-chemnical process. Source: "Unasylva" (FAQO), Vol. 16 W , No. 67, 1962, p. 179. Table 5 World Exports of W4oodpulp, 1965 (1,000 m.t. air drry- weight) South s-orts from: Canada Sweden Finland UrLi tled States Norway Austria Portugal ASrica Imports by: !-t;>h A.irerica anad a 70 United States 2,555 173 111 1 1 15 Europe 578 2, 864 1,643 591 836 146 136 111 Latin !rnerica Central America 19 11 6 49 South -America $8 89 66 120 1 Asia 214 92 69 394 11 2 Africa 9 37 22 10 3 18 Pacific Area 62 55 53 24 6 LJ.cS.S.R 19 148 14 8 Total exports 3,495 3,342 2 ,118 1,273 154 146 137 866 N.:ote: Totals may not add because of rounding. Source: FAG, -Yearbook of Forest Products Statistics, 1966. Table 6 orts of Paper and Papaer Produacts /a by OECD Countries (1,000 metric tons) United West Ecports from: Canada Finland Sweden States Nor-wJay Austria Germany NI4etherlands rimorts by: N-orth lmerica 5,577 227 25 117 8 1 3 1 Canada = - - 117 - - United St,ates 5.,577 227 25 - 8 1 3 1 European OECD and Finland 604 1,686 1, 516 610 483 236 155 44F7 '.-T. Germ:iny. h3 576 503 167 155 155 - 179 Unitued lingdon 523 361 320 248 135 7 12 80 France - 169 167 34 4o 4 35 34 Othcr Europe 37 580 526 Japan 11 - - 6 - - 1 Othe- Western Hemisphere 297 158 .79 417 2$ 5 24 1 U.S.S.R.a 167 1o4 4 - - Yu7os1av,-ia 6 2 1 6 1 2 - Europe non-OECD 24 70 1.8 4 6 29 4 - Otherb/ 301 255 193 295 118 48 II'! 22 Total 6,791 19,835 1,456 654 317 177 480 a! Refers to newsprint, printing and writing paper, fiberboard, and other paper and paperboard. b/ Associated overseas countries and territories. Note: Totals wpy not add because of rounding and differences in reporting. ,Source: FAO, Yearbook of Forest Products Statistics, 1966. -75 APPENDDX A Table 7 North America and Wlestern Euhrope /a -Per Capita ConsHML3tion Gross National Product 1965 1964 1965 1964-65 1964-65 GNP per capita Cou ntry Code t Kgs. per capita U.S dollars U.SA. USA 478.5 501.3 489.9 221.9 3,2)40 Sw4eden SD 320.0 363.0 341.5 154.7 2,127 -Canada CN 305,0 310.0 307.5 139.3 2 ,100 U.K.. UK 2644.0 260.0 262.0 118.7 1,550 Denmark DK 2)46.0 2550 250.5 113e5 1,735 Switzerland SZ 221.0 255.8 238.4 108.0 2,150 Netherlnrds ND 220.0 231.0 22155 102.2 1,360 W. Ger,any WG 208.3 233.8 221.1 100.2 1,625 New Zealand NZ 202.0 231,0 216.5 98.1 1,794 Australia AU 199.0 223.0 211.0 95e6 1,754 Noirway NO 205.0 216.1 210.6 95.)4 1,618 Finland FI 177.3 198.0 187.7 85.0 1,5)48 Belgium - Luxembourg BL 171.0 180.0 175.5 79.5 1,677 France FR 157.0 158.5 157.8 71.5 1,615 Iceland IC 157,0 157.0 157.0 71.1 1,630 Ireland ID 130.0 13)4.0 132.0 59e8 830 Austria AS 122e0 124.0 123.0 55.7 19076 Ital,y IT' 96.0 97.0 96.5 43.7 962 Spain SP 45.5 51.0 48.3 21.9 575 Yugoslav-ia YUJ 44.0 51.0 47.5 21.5 468 Greece GR 38.5 40.0 39.3 17.8 597 Portugal PO 29.0 29.0 29.0 13.1 367 /a Includes also New Zealand, Australia and Yugoslavia. Souroes: "Pulp and Paper," Vol. 39, No. 29, July 19,1i965, and Vol. 40, No. 29, July 18, 1966. Population, Gross flational Product, and Gross NIational Product by Country, 3RlD - Econloics Dep arr-unt, Compar Da, -76- APPE1IND( A Table 8 LATIN AM4ERICA -Per CapaCnupino ae arnd Boar 19614-65 and Gross National Prodict19l65 1964 1965 1964-65 1964-65 GNTP per capita County Code -erc ita - Kgs. per capita U.S3.dollars Costa Rica CR 82 82 82 37e15 380 Argentina AR 57 57 57 25.82 764 Uruguay UR 50 58 514 24.b6 549 Venezuela VZ 57 48.5 52.7 23.87 828 Chile CH 33.9 50.1 42 19.03 1484 Mexico NX 37 38.2 37.6 17.03 434 Panama PM 314.5 314.5 31 e5 15.63 461 Colombi.a Co 28 37 32,5 11 .7 2 262 Guate-mala GT 12 142.5 27.2 12,32 301 Honduras HO 24 214.5 24.?2 1096 201 Brazil BZ 22.2 21 23.1 10.146 224 Peru PR 18 19 18.5 8.38 305 DoI:o.inican Republic DR 10.7 10,7 10.7 4.85 2314 El Salvador ES' 9.8 9.83 9.8 4.44 249 Nicaragua NC 9.5 9.5 9.5 4,30 317 Paraguay PA 5.1 5.1 5.1 2.31 201 Bolivia BO 3e3 3.14 3.3 1.lt9 1148 Ecuador EC 2 2 00e91 188 Sources: "Pulp and Paper," Vol. 39, No. 29, July 19, 1965, and Vol. 40., No. 29, July 18, 1966. Population, ( ross Nationial Product,_9 and (C'oss Nationa Poduct CouLry, IBRD - EcoIomics Department, Comrparative Data Division, July 27, 1967, -77- i APPENDIX A Table 9 ASIA /a Per Capita Conspion of Paper and Board, 4-65 and Gross National Product,_16 1964 1965 1964-65 1964-65 GNP per capita Country Code - lbs. per capita - Kgs. per capita U.S. dollars Japan JA 163 162.3 162.7 73e70 765 Horng Kong IHK 103 99 101 45.75 497 Israel IS 84 83.8 83.9 38.01 1,129 Lebanon LE 50 45.6 47.8 21.65 447 Taivan TA 47.8 41.3 44.6 20.20 203 Cyprus- CY- 16 32 24 10.87 638 Malaysia MY 21 21 21 9.51 262 Philippines PH 14 14 14 6.34 146 S. Vietnam SV 12 13.6 12.8 5.80 108 S. Korea SK lO.9 11.3 11.1 5.03 121 Iraq IQ 10 10 10 4.53 223 Jordan Jo 9.2 10.4 9.8 4.44 218 Turkey TU 9.7 9.2 9.5 4.30 234 Ceylon CE 7.14 7.8 7.6 3 .44 140 Thailand TH 7.7 7.5 7.6 3.44 117 Syria SY 5 9 7 3 17 191 Iran m- 5 5.5 5.2 2.36 226 India IN 3.2 3.3 3.3 1.49 88 Laos IA 4 2.5 3.2 1.45 64 IMalagasy ML 1.6 3.8 2.7 1.22 79 Burma BR 2.5 2.5 2.5 1.13 64 Pakistan PK 2.5 2.5 2.5 1.13 85 Cambodia CM 3 2 2.5 1.13 119 Yemnen YE 2.2 2.2 2.2 1.00 88 NIepal NE 2 2 2 0.91 66 Indonesia IA 1.7 1.8 1.75 0.79 85 /a Includes Cyprus and Turkey. Sources: ItPulp and Paper," Vol. 39, No. 29, July 19, 1965, and Vol. 40, No. 29, July 18, 196.6. PopuP.tion Grwss National Prodlict, and Gross flatl;ial- Product by Coumbrv, IBRD - E'co1nornic5 D ),IaL'tme1t1, Com.parative Data Uivi3ion, July 2 ,'196 -. 78- APPENDIX A Table 10 AFRICA -Per Capita Consmtion o er and Board 196!4-65 and Gross National Product, 1 1964 1965 1964-65 1964-65 GNP per capita Country Code - lbs. 2er capita U.S. dollars S. Africa SA 70 70 70 31S71 523 U.A.R. (Egypt) E 14 13 13.5 6.12 151 Tunisia T 13 12 1.2.5 5.66 201 Morocco M 10.14 12.1 11.2 5.07 179 Algeria A 11 8.9 10 C4.53 211 K6nya K 8.9 9.5 9.2- 4.17 85 Rhodesia R 8 8 8 3.62 221 Ghana GH 8 7 7.5 3.40 226 Senegal S 7 7 7 3.17 168 Ivory Coast IC 6.8 6.14 6e6 2.99 212 Angola .N 8 4.2 6.1 2.76 91 Sierra Leone SL 3.8 4.3 4 1.81 137 Zambia ZA 1 6.7 3.85 1.74 198 Gabon G 3.5 3.5 3.5 1.59 253 Somalia So 2 4 3 1,36 54 Swaziland SW 2.5 2.6 2.5 1,13 235 Liberia LI 2.5 2$5 2.5 1.13 185 Sudan SU 2.4 2.5 2.5 1.13 95 Guinea GU 2.1 2.2 2.2 1.00 73 Burrundi BU 2 2.2 2.1 .95 47 Nigeria NI 1.8 1.8 1l8 .82 78 Congo (Leopoldvill-,3) CL 1.7 2 1,3 .82 65 C. Af rican RepuLblic CAR 2.5 0.87 1.68 0,76 77 lozambiqae 140 1.5 1.7 1.6 .72 67 - 79 - APPEIDDI A AFRICA -(CONTINUED) Table 10 AFRICA - Per Cita Cons tion of d Board 4-65 and Gross NTational Product, 19665 1964 1965 1964-65 1964-65 GNP per capita Country Code -lb prapi -pit U.S. dollars Caineroon CA 1.5 1i5 1.5 .68 106 Tanzania TZ 1.3 1.59 1.45 .66 68 Congo (Brazzaville) CB 1.3 1.5 1.4 .63 116 Uganda UG 1.3 1.57 1.4 .63 101 Togo TO 1.1 1.3 1.2 .54 93 Rwalnda RW 1 0.9 0.95 .43 49 Malawi NW 0.6 1 0o8 .36 40 Ethiopia ET O e75 0.75 0.75 .34 54 Gambia GA 0.7 0.7 007 .32 76 Dahomey TIH 0.64 0.6 0.6 .27 62 Upper Volta UV 0.4 0.3 0.4 .18 52 Maluritania Iv3 0,4 0.3 0.4 .18 151 Chad CD 0.31 0.3 0,3 .14 66 Niger NG 0,2 0.2 0,2 .10 71 MaLL MA 0.14 0.4 02 .10 61 Sources: "Pulp and Paper,2' Vol. 39 Nto. 29, July 19, 1965, and Vol. 40, N1o. 29, July 18, 1966. Popu1ation Gross Natiornal Product., and Gross National PFroduct by CotuLtry, IBRD Fconoacs Department, Comparative Dataii 80 - APPPEND]I A Table 11 Correlation Between Paper Consuxpion_ 1964~-.65 and Ciross National Product) 1965 1/ Number of- 2 2/ Area outries uation R Value Percenrt World 105 log Y = -3,078 + 1.59 log X .857 ,3184 +106 (.06) - 51 N.Anerica and Western E=ope 22 log Y = -2.175 + 1.29 log X .921 081 23 (G08) - 18 Latin America 18 log Y = -3,219 + 1 .`6 log X .576 e295- t 97 (.34) -4-, Asia 26 log Y = -2.578 + 1 .l3 log X .772 .270>03 + (.16) - Africa 39 log Y = -3,028 + 1050 log X .h96 .)3J35,-3 (.19) -2'. / Standard 1rror of Estimate. 2/ In Logaritams. 3/ Calculated at the rman value of y. Note: Coefficients are adjusted for degrees of freedom. The correlation coefficien.ts are statisticaily significant. Source: Calculated from data showni i n Tables 7 tirough lo1 APPENDDI A Table 12 Pulpwood Prices in the United Stat, b Selected Species,, 195-67 (Dollars per stardard cord, including bark) Nidsouth Visconsin Southeast Chlips-So-ut'iern __uce_ Rourid7ood -__ pine Aprpce Southern ine Hardwoods Southern Dinie Hardwoods______Curent 1957-59 C ent197-59 Cren tA 9 Curent 1957-59 Current 1957-59 Current 1957-59 Current 1957--59 Year dollars dollars /1 dollars dollars /1 dollars dollars /1 dollars dollars /1 dollars dollars /1 dollars dollars /1 dollars dollars /1 -950 19.50 22.1±5 9-50 10.95 11.90 13.70 - 12.15 1)4.00 10.65 12.25 - 19,1 22.50 23.25 10.50 10.85 13.80 14.25 - - 14.25 114.75 13.00 13.145 - n91c, 25.00 26.60 12.25 13.05 13.90 14.80 - - 14.30 15.20 12.90 13.70 - - 5, 23.25 25.10 12.00 12.95 13.90 15.00 - - 14.25 15.35 12.80 13.80 - 2'5.25 26.10 12.50 13.45 14.00 15.05 - - 14.30 15.40 12.85 13.85 - - t Q> 24.75 26.55 11.50 12.35 14.40 15.L5 - - 114.60 15.65 12.90 13.85 - - 1-6 26.00 27.05 12.25 12.75 15.40 16.oo - - 15.65 16.25 13.50 14.05 - - 9 26.00 26.25 117.5 11.85 15-50 15.65 13.35 13.50 15.30 15.1k5 13.35 13.50 14.25 1i.14o c:>^ c^s 26.25 26.15 12.00 11.95 15.50 15.45 13.45 13.40 15.30 15.25 13.10 13,05 14.3G 14.25 H 9 26.25 26.10 11.50 11.45 16.00 15.90 13.70 13.60 15.70 15.60 13.10 13.00 14.30 14.20 1 1>4 26.75 26.55 12.00 11.90 16.45 16.35 13.60 13.50 16.05 15.95 13.10 13.00 14.40 114.30 1961 27.25 27.15 13.00 12.95 16.55 16.50 13.50 13.145 15.85 15.80 13.05 13.00 14.50 14.45 1962 *27.25 27.10 12.75 12.65 16.55 16.45 13.40 13.30 15.80 15.70 13.20 13,10 14.60 14.5o 1963 25.75 25.65 13.75 13.70 16.55 16.50 13.45 13.40 15.75 15.70 13.10 13.05 14.40 ILa.35 19614 - - - - 17.00 16.90 13.60 13,55 15.90 15.80 13.15 13.10 114.30 14.25 1965 - - - - 17.65 17.20 114.35 114.00 16.30 15.9C 13.80 13-.45 14.40 14.05 1966 /2 - - - - 18.80 17.75 14.90 14.05 16.85 15.90 15.05 14.20 15.15 14.30 1967 72 30.75 29.00 15.50 14.65 19.00 17.90 15.00 214.15 17.00 16.05 15.25 1.140 15.25 14.h0 /I Darived by dividing price in current dollars by the Breasu of Iabor Statistics wholesale price index of all ccrrodities (1957-59=100). /2 PrelIminary. Source: Tha Demand and Price Situation for Forest Products, 1967. U.S. Dexartment of Agriculture, forest Sedvice (Miscellaneous Publication lio. N6ovesder 1967), p. 62. - - 82 APPENDIX A Table 13 Prices of Paper Products in the United Kingdom, August 1968 /a Country of Ori-in Product Britain Canada Scandinavia U.S.A. 1n U.S. $per metric ton Newsprint 156 /b 156 /c 151 /d 156 Mechanical printings, 70% mechanical content, D.C. 26 3/4 lbs. on reels 10 lots and over, deLivered 170 to 172 MG poster, min. of 10 tons, reels not less than 15 in. wide and 18 inches in diamoeter, standard substances 306 - in.sheets of-standard sizes 333 MG Kraft - bleached 276 /e 236 /f - unbleached 237 /e 207 /f Unglazed Kraft - bleache. 274 /e 229 /f - unbleached 238 /e 200 /f MG sulphite - bleached 260 / 285 /h 254 /i - unbleached 235 /i /m Kraft linerboard 154 /k 158 /1 157 16Jl /n Folding boyboard 224 /o 238 / Semi-chemical flutting 118 / 108 /r Grease-proof, pure grade A, DC 16 lbs., unbleached large reels, m-inimum 1 ton shipments, c.i.f. U.K. ports 296 - sheets, depending on size 350 DCO17/18 lbs., as above reels sheets 326 to 342 - * (less 2 per cent if cad) /a Tho prices quoted are intended only as a guide. They incltAe shipping rebates but no other discounts. /b Any quantity in reels, n.et delivered. Ic Any quantity in reels, delivered. /d Reels, delivered, /e DC 29 lbs. and up. Order of 20 tons and over, delivered England and Wales in lots of not less than 5 tons; on large reels. /f DC 29.lbs. and up; 20 ton orders, large reels; cif., U.K. ports. Unbleached less 2 per cent if cad. /g DC 29 lbs. and up, large reels, lst grade, 20 tons and over, delivered. /h DC 29 lbs. and up, larpe reels, 2nd. grade, 20 tons and over, delivered. /i 550gsm, 10 ton shipments, reels. /v: Price in the United States numrket in March 1968. /k 32-90 lbs. per 1,000 sq. ft., water finish or dry finish reels., cif., U.K. ports. /1 25-32 lbs. per 1,000 sq. ft., water finish, as in A (reduction of $2.40 per ton for dry finish) (less 2 percent if cad). /m h2 lbs. per 1,000 sq. ft. import duty paid. /n ','6 lbs. per 1,000 so. ft. import duty paid. /o Reels, 10 ton lots and over, bleached, lined, cifo price. /p 3lhects, as in /o (less 2 porcent if cad). /a Delivered price for 3,000 ton contracts. /r Basic cif. pricet. 2oXiirc. P'Taper IRullTt.:t Jni, Augw;t 1968. APPEMDIX A Tabl 14 Unitod Staton A=ounc5d P2perbo,ard Prilces DeIJverod Prices, for woek ondod TuasdM, Augimt 13, 1968 Where two prices are show, they- inxlicate a rMoan , or larger is ton price &rdasa1ler _(bela $10) is 14SF (Thousand Squaro feet) price New Middle South & North West Market Areas Englanid Atlantic So. Cent. Central Coast Container Board Grades 42// Fourd. Kraft Test Liner * $ 2.68 $ 2.68 $ 2.68 $ 2.68 $ 2.68 127.50 127.50 127.50 127.50 127.50 26jf .009 Semi-chemical* $ 1.56 $ 1.56 $ 1.56 $ 1.56 $ 1.62 120.00 120.00 120.00 120.00 J212.25 22.261# .009 Chip Rolls * 110.00 110.00 110.00 110.00 Boxboard Grades Plain Chip Sheets 100.00 100.00 100.00 107e50 108,50 No. 50-90 10-ton lots - - 107.50 112.50 - Filled N4ews Sheets $100.oo 100.00 105.00 112.50 No. 50-9() 10-ton lots 105.00 105.00 - 117.50 - .O2O WThite Lined cyl. Shoets 70 Bright /a $ 6.57 6.57 6.57 6.57 167.50 50-ton lots 160.00 160.00 160.00 160.00 - 60 Brighit /b $ 5.80 5.80 5.80 5.80 157.50 50-ton lots 1~5.00 145.00 145.00 145.00 - Match. Clay. Ctd. (Gy3.2:l:vh 80Bright .02O $ 7.07 7.07 7.07 7.07 - 50-ton lots 17a.50 172.50 172.50 172.50 - .015 Solid R1. F. Kraft, 78 Bright $ 7.8? 7.82 /c 7.82 /c 7.82 /c 7.82 /c 6611 Sheets 50-ton lots 235. )00 7 35.00 235.00 23500 - 235.00 ' inatirorboard Notes: Other Fourd. Kraft Liners: 261/ (.009 or linrer), $1.79; 33#, $2.27; 38#, $2.48; 47#, $3.C-; 6 00 9/i, :IL. 4,; 90#/ 7 .0130 Jute lIner; 954f - JIQ#/ ... Other . 9--Bogus 26-28 lb., $1.48/1.5c. Premiums? lb. Chip, $115/ton. Btuxboard N:ote-: /a P'qu.ivalent to former W.P.C. News. /b Equivalent to former B.M.L. Chip Addedi pxer torn for snalleir quantities (other than solid bleached grades): On 50-ton lot base-- $f lor 25/50 tons; $20 for 10J/25 tons; ard $17.50 for 3/10 tons. On 10-ton base--$2.50/5.00 fcr 3/9 tons; ar;o f5./lu.0Ofor 1-:3 to2s. 6-2' Brightness (G.E. or equiv. is BASE on other th^an s-'lt c,. t oards--wlth 70 Br. lo.s $l0u/ton; 69 Br. less $15/ton; and 60 Br. lese $ 2 0-25/ton, /c elther calloer s--.'' Lese $l147/'l.8; .0?0, plus $2.30/2.36; .026, plus $5.28/5.30. In solls "I"t .min. kiaui. ietss $;Ui.z/0.7o7 p(,r M.Sq. Ft. ($20.00 per ton). Uncoated, 21." or wider. Suh^, ct to gcrrjz&v kiownhly (di3COLult,5. Source: "Official Board Markets' (1"The Yellow Slheet"), Vo. 44, No. 33, August 17, 1968. -84 - Appendix B V.Awd-wid P,,Ip and Pxpor Conswuaption by PgA8ea 19189_ (Thousand Ptsric tcnse) pat. oo,.pProdUcti-a and CmvVas,tLCtI 191,8 1950 1952 19513 1954, 1955 1956 1957 1958 1959 1960 1961 1962 1963 i's64 1965 Unite,dtates-30, Woo,dPU1Pir cto 11678 13471 11c066 15910 16563 18816 20077 19777 19773 22066 22967 24062 25320 27326 29420 31' lto)d.Alp E.-.:rt 85 87 192 117 401 571 177 572 467 592 1036 1069 1076 12,90 1133 132.. WuaodpulpIMports 197h 2361 1756 1.958 1861 2008 2117 1912 1906 2206 2161 2240 2585 2519 2669 28113 A rctonu tin 13567 15518 15630 17721 18023 20250 21717 21117 21211 23680 21092 25233 26829 28555 3055 31725 Baac.- 1889 -2077 *-i.561 -1811 -1.360 -11.1 -86 -1340 -1411 -1614, -1125 -1171 -1509 -1229 -1236 -lS2li 'roduction o pulp, 60 50 10 Io 10 10 b 2 0 loo,,dpulp irdcan 6963 7162 7886 8235 8775 91209 9738 9158 9197 9827 10397 10571 11007 11317 12452 12872 1,'oodp.lp Exports 1631 1662 '1751 1761 1978 2116 21.51 2071 2013 2223 2360 2603 2762 3030 3299 31.95 Vh:oodpulpImports 30 33 50 39 h7 5I 58 59 19 60 58 56 57 68 68 95 Anuci-entconouMctiun 5362 5833 6185 6513 6844 71-17 7612 7116 7233 7666 8095 8027 8302 8355 9221 9162 Balance +1601 +1629 +1701 +1722 -1931 +2092 42096 +2012 .1964 .2163 +2302 .2517 .2705 +2962 93231 .3111, I1. America- Net Positim, -228 -448 '137 -89 471 +658 456 .672 +523 .549 .1177 .1376 .1196 +1733 +1995 .1891 As.oipuip routon 1130 2112 3111 3809 181 5180 5166 5703 !807 6350 6911 70o96 7237 7510 7812 8222 V.lsoApulpExports 56 209 162 233 316.7 371.0 388.3 392,0 435.5 175.1 544,.7 525.0 526.2 561.7 600 677 W.odpulp Is-ot3 1796 2872 2638 3109 0 8 4602.t 1679. 4858.. 1760.8 5157.0 6217.9 6138.7 6118.8 7061i.9 7651.8 71~5.5 Apparent Consumption 2870 5105 5917 6685 8561.I 9111.1 9756.07 10169.5 10132.3 11031.9 12581.2 12709.7 121159.6 1401s.2 119)3.8 i51.. Waance. -171 -2663 -2476 -2876 -3717.1 -1231.4 -1290.7 -4166.4, -1325.3 -1681.9 -5673.2 -5613.7 .-5622.6 .6503.2 -7051.8 6818.5 i~odther th- Pulp, 926 1000 968 961 1028 1081 115 1228 1231, 1130 Pur.n. - Slt Position .1080 .950 418o.o 4800.1 +252.0 -16.0 .185.0 -58.0 -:39.0 +78.0 -154.0 .621.0 -100.0 -690.0 -696.0 -62,.1- WoedpulpProduction 5460 6088 5919 6221 7296 7892 8193 8629 812 8951 10171 11000 11109 12095 13533 11,31 WoodpulpExporlts 2884 3701 3028 3767 10O51.3 1303.0 4559.7 1192.0 _1376.5 1841.9 5332.3 5091.0 5315.8 5921.3 6513 635' WosdpulpImports 101 88 72 90.9 82.2 87.6 81.0 83.6 90.2 85.0 113.1 101.3 93.2 111.1 157.2 167.5 ApsarentconsumptIoo 2680 2175 2963 25114.9 3326.9 3676.6 3717.3 1220.6 111,.7 1191.1 1951.8 601-0.3 5886.1 6281.8 717i..2 8121.5 Balance .2780) .3613 +2956 3676.1 .3969.1 41,25.1 +1475.7 +4I:38.4 41286.3 -1759.9 +5219.2 +4989.7 +5222.6 +5813.2 6355.8 618..5 Asia ax. Jopac "op1pProduction 10 21 50 63 231 235 292 279 353 181 7f3 822 900 969 987 10`7t Vodpulp Excorts ------7 2.2 .5 .7 2.1 - 1. Wo.dp.lp I Mports, 19 16 11 19 59.1L 56.8 59.2 91.11 105.1 176.2 221.0 298.0 383.0 3,61.3 346.1 315.3 ApparentConsumption 29 37 61 82 293.4 291.8 351.2 370.2 158.1 657.2 926.8 1119.5 1282.3 1328.2 1333.1 1333.9 Balance -19 -16 -114 -19 -59.4 -56.0 -59.2 -91.2 -1o5.1 -176.2 -218.8 -297.5 -382.3 -359.2 -316.1 -2-*.- Woodrulp Production 1,10 719 124,0 1507 1625 1899 2193 2162 2363 2999 3521 11119 1202 1571. 5320 516. 1WoodpulpExports - - 2 - .1 1 - .3 5 5.2 20.8 16.5 6.7 3.2 0.3 7.2 W.lodpulp Imports 21 64 56 121 112.6 83.2 13,1.8 188.6 52.6 90.8 138.0 177.0 227.0 171.7 527. + 1,-%. ApparentWntosstm Lio 13 783 1291v 1628 1737.5 1978.2 2331.8 2650.3 2110.6 3071.6 364112 14271.5 1172.3 5082.5 5517,6 565b.5 aane-21 -61 -54 -121 -i12.5 -79,2 -141.8 -188.3 -17.6 -75.6 -117.2 -155.5 -221.3 -168.5 -527.6 -1 ' 'oomdnsi Froduction 70 165 180 190) 2a 201 223 211 293 333 120 565 566 713 819B Wsodp,uIp xports, ------0.1 114.0 37.3 32.8 18.5 26 L. *WoodpulpIr'.ots~ Po 210 250 190 138 128 330 380 332 363 312 365 317 310 357 36: Apparent .surtin 151 105 130l 380 61 629 553 624 625 695.s, 718.0 8Y2.7 851.2 1001.5 1179, IV' Bane-8.3 -210 -253 -190 -138 -h28 -330 -380 -332 -362.9 -298 -327.7 -284.2 -291.5 -331 4-2 CetalAerica 14oodpulp Pr.,lor-tion 70 70 70 70 79 82.5 118 .3 133.3 112.2 160.5 171.5 387.0 203.7 219.1 239 IL' Wo,dnulp Exports - - - 2.0 1.5 9.6 9.6 7.6 3.7 1.0 - 0.3 1.3 - - Woodm,lpIMport:s - - 61 71 60 86 101 68 69 78 85 121 66 96 112 112 Apparent Cursumrption, 70 70 134 112 134.5 158.9 209.7 193.7 207.5 231,h. 259.5.: 307.7 268.i, 315.4 351 X1 BalanCe 0 .3 -61 -72 -55.5 -76.4 -91.4 -60.1 -65.3 -71.0 -85.0 -120.? -61.7 ..96.0 -132 41L2 Africa. 1Loodpubn Production 20 30 .30 50 50 57 62 81 90 87 110 153 lBS 3213 3S0 53', 1s~,Aiu1p Ecpa,-t - - - - .1 1.1 35 50 66 67 88 102 137 211) 262 32, T-sdpulp r. orts, - 11 1.0 20 27 33 40o 16 Iso Is7 S8 77 85 92 AS 85 Apparent Consumption 20 Iso Iso 70 76.0) 88.9 67.0 77.0 61.0 67.0 80.0 128.0 333.0 176,.) 183 351 Balance. -26.9 -31.9 -5 +14 .26 .20 .30 .125 .52 .152 .27' 1'erific 'reo Vuo.dpulp Pr6duction 130 150 220 230 304 355 191i 517 541 596 582 610 637 755 127 LS2. uo.dpulpExpr,.ts - - - - 19.9 27.8 18.1 66.0 70.1 78.5 71.3 61.6 71.3 61.2 67 v'&odpulr Imports 60 Iso 60 Isn 78 90 86 108 ia 336 172 20?1 1,i 224 22. 27- kvoarent Consumption 130 190 280 270 362.1 117.2 531.9 559.o 571.9 653.5 682.7 752.1 706.7 911.8 582 hI. Blne-60 -111 -60 -40 -55.1 -62.2 -37.9 -42.0 -33.9 ..57.5 -100,7 -112.1 -69.7 -159.8 -iSS -199 W-)odr'olp?ro_duction 87 1536 2000 2167 2312.5 2160.2 2610.1 2771.2 2922.6 3o54.1 3212.2 311.6 3716.5 3507.1 1, 130.0C .. 5. VsOlmulpf9xports .a n.e. - 21 103.1 137.1 115.8 ISO.5 218.9 203.4 213.7 265.8 266.7 215.3 2U 41 2-'..' losidpaip Iq-otn nn. n.. 12 27 37.0 31.1 65.1 99.2 85.9 (J.1.o 8.8 107.1 308.3 81.5 v23.! 116- Ar-p.r*nt. Corumw,ptiun n.a. 'I.a.. 7032 2170 2276.1 2360.2 2529,7 2722,.S 2789.6 2911.7 3051.3 3281.2 3558.1 3719.6 3989 1 .. i.. iaacn.. na-. -12 -3 .66,4 +.100.0 .80'.1, .51.3 +133.0 +139.1 +160.9 +158.4 +158.1 +163.9.0 'l1409 . sc a A1ince -en, t,et axporte.s or tanrts -) 5 O,r.m+a' .. i'1A-.rM-tIontu at tho T9sitx..' 'Wiam'r, 'eii?,-i. ?es-At, ,i.tlati.c A~'S-"a a0' 91113. Sia., Italy, 1965. Faad a,. Agi reO.t R.anii..s,n .5 the '!nited 'nisu_a_orsatoflos P'rcoi,ot. iSt+ti.Uca VW~, W'aulaton, 1950. ______l ar+ .. et B.see i..C,.~.a Ic,eitl , ~$ RB se, TIta Y, 1951. 5 ______5m e sn o S e., I .. -, I. C aI , 1' , L-an ILal , 3952. 1 ______leri' atiree Pr.',''..3..(L'222 ' fit-, It-ely, 1953. ______Yerh'h 5' 'o1ij.oi. Attt1o hm,'- Italy, 1966 World-videPu3L aid Paper Cee ption by Memions, 1948-1965 (Thousand -rtrictor ) Port II. Pner Productior end Conv!SNtion l 1959 1960 1961 1962 1o63 196-14 1.-5 19 1950 1952 1953 1954 1955 1956 1957 1958 Uoit.ed ,Latats 32381 34109 35588 37823 3?631 20669 20852 22766 24382 27363 28523 27838 27911 30859 3L352 Paper f'rociicti,n 21040 35563 366214 3841.5 39772 42211, L4257 24826 24958 25087 27154 28532 31631 33198 32054 31871 35178 .1aper Conauzoption -4216 -3960 4319 -4311 -4233 -4340 -4184 -43 1 -4626 I,alance -3786 -4289 -4235 -4388 -4150 -4268 -4675 7378 7561 5816 6385 6220 5880 6410 6604 6659 6773 6720 Newsprint Consuzption 4751 5292 5477 5464 5492 Crnada 7706 7552 7359 7790 8124 8175 8273 8446 9215 ('4tl San,er Production 5501 6190 6535 6629 6943 7260 2262 2161 2177 2380 2442 2441 2590 2643 2823 2846 vanerCon3umption 1434 2653 163J 1716 1932 1996 5444 5391 5182 5410 5682 5734 5783 5803 63'2 67f7 Balance 4067 4537 4905 4913 5011 5264 2132 996 769 1174 1222 1091 1370 1501 i442 1619 2001 11. A erica - Net Position 281 248 670 524 861 r.e Scandinavia M ex- 20883 22208 21276 10939 12406 13481 14138 16430 15524 16521 18404 19314 19674 Paner Production 4124 8346 9746 22266 23275 24921 26667 27113 8716 10143 11426 13238 214713 15445 18176 17407 18614 21112 Paper Cnasumptiuno 4599 -2102 -2708 -3125 -3601 -4038 -445; -8637 -475 -370 -403 -487 -872 -1232 -1307 -1746 -1883 balance 3012 3010 3211 3612 2635 3505 3795 40h5 t415 Ile..osrintConsun=tion 781 1169 1987 2280 8041 2576 281.3 41292 +1150 +997 +1123 +1001 a1036 4794 +823 +809 *715 durpe - Vet Po.ition +945 +1560 41310 +1490 +1228 +1113 Scandinavia 6471 6699 7375 813. 9616 2874 2904 3221 3636 4024 4255 3223 4671 5112 5861 Paper Praduotion 2586 1887 2152 2310 2304 2514 2871 328i 1266 944 1191 1244 1536 1679 1656 373 1791 Paper Conaunption 2599 2850 2880 3225 3709 4161 43'5 4861 5268 5352 Balance 3420 1930 1713 1976 2100 2345 Asia ex. Ja.ren 3235 3515 3848 4261 4441 4593 123 147 213 217 3169 1234 1447 1796 2285 2895 Paper Productilcn 4623 5S144S,541 626 786 1733 1893 2094 2474 2902 3584 3978 4331 Paper Consuption 421 436 -742 -816 -776 -882 -977 -298 -289 -413 -568 -564 -658 -646 -678 -617 -690 Balanrc 422 478 524 589 615 681 64o 755 776 7' Ne.sprint Consumption 216 144 128 139 350 404 6553 7587 7, ' 1773 1937 2224 2592 2993 30o4 3931 4642 5536 5827 Paper Production 447 883 1357 5296 5636 63U4 7474 7,3:' 449 854 1344 1755 1877 2144 2484 2885 2933 3782 4467 Paper Connumption +108 +108 +107 +119 +1714 +240 419Q1 4206 +21. O2. Balance -2 .29 +13 .18 *60 +80 South America 1357 1421 180 26ei 1-%., 200 560 540 708 788 916 928 1066 1139 157 Pacer Prod-lcti on 240 1755 2022 1S73 2-42 21 :2 410 530 9-90 860 3140 1301 1450 1547 1671 1668 PMer Cosurmption -534 -619 -605 -529 -548 -665 -552 -562 -5 '2 4 3 alance -170 -330 -130 -32r1 -432 -513 1415 489 So5 470 548 596 527 533 5c:S 'lews.r+nt Corasunioriin 130 260 360 300 337 382 e.ntral Ame4rica t, - 251 282 314 366 395 441 511 546 572 611 Paper Pr1-iuction 349 - 179 187 837 861 -j 1' 10 311 326 437 481 612 660 694 747 797 Paper On.iion 345 -?26 -261 -282 -297 -412. -444 -4 -10 +132 -139 -186 -19Y -298 -294 -299 -3"6 Balanco 145 136 148 165 160 183 1l2 1-7 1 i Consumpti ;n 5 5 114 109 101 100 133 Africa 483 691 783 6 5 160 290 212 245 294 305 327 356 385 415 Paper Productio,n 20 20 870 908 1120 1252 '1'- 390 510 530 565 627 633 676 724 721 844 Paper 0nourati on 125 -365 -459 -455 -425 -429 -46 '-, -105 -370 -350 -340 -353 -382 -339 -371 -149 balance 127 135 14 162 177 160 237 2t4 179 wsprint Consu Ttion 73 90 90 70 87 107 129 Ps.'iic Aroa 842 862 884 134O 1143 12.52 210 290 270 330 457 488 6Co 634 695 746 gaper Production 1081 1025 11-12 1336 1193 1306 1I4 ,i 6. 450 640 750 520 779 896 940 919 -5 :Sarer Zor.anpqtion -340 -285 -386 -279 -330 -44 -31)4 -262 -271 Balamcc -240 -350 -260 -190 -322 -408 335 325 430 336 382 438 366 376 Iewsprint Consunption 170 210 240 180 266 350 341 3724 3A82 4703 44 511l - 114 2075 2290 2321 2461 2550 2876 3067 3256 Faper Produ-tion 3107 3260 3426 3759 3985 L221 44 . Consumption n.a. 1194 2105 2351 2407 2499 2696 2940 ener -64 -l4o -I4 -15 -35 -3 -21 +35 . Belance n.&, - -30 -61 -86 -38 -46 to ne.4eprint, eth-r p.pe, pgpyt>oa,d fhrbod. L1 Peper refere Itcly, 19{5. t P .. tt tIti. A Tqn-Yc.sr a.-..r- i5.- Free, and AgrPiulture :'rNan1ai-c.n or the United wetionm, F-;r aiourco: FooI let. 1z,S , IJ ;j. Itrlr>t Food and Africulturm Oraniz.rtion of the Unitod M,ttos, .2 Fev.rc !Jc.3-.sn r5..nc3. - eenbrIckof Foroet ProdeotStatetiee 12a. 1eo, Italy, 1951. -YEerbok of Frwe' t Prcdocto vttietie152, I2aROW,Itely, 1952. lo&tuoek ofFc.reetIorodts Statieti1e 155Jd Ro0, ItAly, 1953. - - bo 1. R c, ItaL%, 1954. *y+r.b cL n-rZ,tt pz. r1t. oati 1, SI'65Rano, ItAly, 1955. ,Y".rl.+rr of Y'er Jnt-lr 0?arndtl,;5c-rn A ;lon, Italy 1966 86 APPF.ND1 C THE, KI2AFT PULPING PROCESS General In the following paragraplhs a very brief desoription of the Krcaft or sulphate pu-lping process is given. Tne description is initended for those with no previous lznowlA.-.Ige of the process and will initroduce some of the berms used in the chemical pulping industry. Prearation of the Wood The Kraft pulping process uses bark-free wood converted into chips, each about 16 mm in length. nine particles which will pass through a , rim hole are screened out and discarded. Oversized chips are also separated by screening but are rechipped and returned to the screens. Cooking The chips are charged continuous2;y to a pressure vessel called a Kaxw Continuous Digester oxr into batch digesters. Cooking liquor called 'White Iiquor, is charged at the same time and the mixture is heated by steam and kept under pressure for a pre-deterntned time during which the lignin, which binds the cellulose fibres of the raw wood together, and certain undesirable components of the wood, a-re dissolved leaving the useful cellulose fibres themselves xrelatively untouched. Thie mixture of cellulose fibres and liquor is continuously discharged into a Blow Taik, whence it is pumped first to Screens lwhich renuo,re knots and large bundles of uncooked fibres and then to a series oS rotating drum filters called Washers. Here the liquor, now discoloured by the lignin dissolved in it and hence called Black Liquor, is separ,ated from the fibres (pulp). The pulp is washed several times until the black liquor has been removed and partly replaced by water and is then screened again to remove dirt and small uncooked bundles of 2Libres. The pulp is then ready for the bleaching processs descr-ibed later. Blathe Recoery Boiler The black liquor contains the chemicals which were originally in the white liquor and it also contains tble lignin from the wood. The liquor is now evaporated until the concentration of lignin is high enough to enaOble the mix&tare to burn. It is then spraycd against the walls of the combtv-,ion c'Dayber of a specia2L:yP de!sig(.MŽ_Id boiler called a Recovrery Doiler, Stealmi1 is 8eA;ed in the boiler and is used botlh to generate electric pomcr and to provide -steami bo the di,ester for heating (cookidnig) as well as to ot-ho !rroccl-L.-os- whore steam is rCquircod. The. chcrtiialls contai-jod in the ThLZk liquor bc;c3n moltan a'fcrizay21 a 3T,.;-ot wIhich is dravnlnd contImously fVrurii the bo'thom of the combuotion C1rIb)x, -87- Recovery of Chemicals The molten mixture of chemicals or Smelt is dissolved as soon as it is discharged from the combustion chamber of the Recovery Boiler. Because the solution has a greenish colour it is called Green Liquor. The tank in wihich it is dissolved is called the Dissolving Tank. Th.soLuble componenits of the green LLiquor are removed in the Green Liquor Clarifier, and the dregs from-a the clarifier are in turn washed as free as possible from the chemicals that are going to be used again, in a Dregs W4asher. Because of changes iwhich have taken place in the composition of the chemicals during combustion in the furnace, further treatment of the green liquor with burned lime is necessary to convert green liquor to white liquor for coolding. The burned lime is added to the green liquor in a Slaker Classifier, and during the process the burned lime, which is Calcium. Oxide, is cornverted to Calcium Carbonate. The mxLture of calcium carbonate and liquor is passed through Causticizixig Tanks where the chemical reactions are conmplet,ed. The mixiwze then passes to a lXhite Liquor Clarifier in which the liquor and insoluble calcium cabonate are separated. To complete the conservation of chemicals, the calcium carbonate from the wihite liquor clarifier is separated irn a Yiud Washer and washed free of other chtemoicals. It is then given a final wash and is thickened on a ILimo, 34ud P1.1ter and fed to a Lime Kiln in which it is converted back into burln-ed line for reuse in the slalter classif:er. Chemical Losses and Make-up Ih the processes described in the foregoing paragraphs small quantities of chemicals a:e lost at various stages in the process. For example it is not economical to completely free the brown stock from the cooking chemicals at the washers and consequently som.e of these chemicals are carried through to the Bleach plant and are not available for recovery. Some chemicals are lost in the form of dust and gasses from the Recoveiy furnace and from the limLe ILln stacks, alhough the mdn possibl dust in each case is rei-ioaved by special equipment before the gasses pass to the atmosphere. Some of the chemioals are changed into insoluble compounds, which are lost in the dregs washer arid from the slaker classifier. Chemicals lost; fro^m the Bleach Plant are used in an odor and effluen:t cantirol system to neutralize and ronder harmless chemicals entering the mill r' c from other parts of the Plant. * - 88- 'The losses are made up in part from chemicals which are by-products of '4,he bleach liquor preparation and in part by the addition of salt cake to the recovery furnace aind fresh lime rock to the kiln. BLEACHINGT, DRYflG AID PULP FINSHIMI Bleaching The pulp leaving the washers in the digester plant is broTw,ln in color and contains maW impurities which must be removed by bleaching before it. can be used for dissolving pulp or for papernrgrade pulp. Bleacling is carried out in five mr six stages and the chemicals used are -Chlorine Caustic Soda, Chlorine Dioxide, Sulphur Dioxide and Sodium Hypo-clorite. Tlese chernir- are prepared for use in a specia1 section of the Bleach Plant callmd the Chemical Preparation PLmat. Sheet Forxning and DL-ying Bleached pulp is passed throuah presswe screens and centrifugal cleaners to remove all traces of dirt acctmulated during the process and is then formed into a continuouLs wbc- on the Fourdrinier, the principal element of which is an endless moving fine screen. Water is partially removed from the web by drainage through the screen and partially by squeezing the web between press rolls. The web is then dried by passing it over rotating stoawnm-heat!ed cylinders. The. maclhne embodying the Fou.drinier, presses and drying cylinders is called the Pulp Dryer. Pulp Finishin gL Pulp finislhing consists of ciutting the pulp into sheets, staclkng the sheets in piles weighing apros:1illately 4$50 pounds per pile,, wrapping the stacks, compressing them, and tyinig the resulting package with wire to form bales. The equipirmt consists of a Cutter axnd a Finishing Lins all of wihich are designed to carry out the finishing operation autam-ati- cally. Finished bales are lowered to the warehouse :from which they are shipped. Source.: Sandwell and Comparn T±IitLI ied. , -89- B3LIG0(RAPHY INTERNATIONAL ORGANIZATIONS Nations). Economic Commission for Latlin America (United ElPaQ la Celulosa en America Latina: Situacion Actual y Tendencias Fufturas de su Denandca Produccion d= e Ilntercamibio tSantiago deCile Febrero:0 Sb) Exports to Prospects for Latin A-merican Pulp and Paper Overseas (Santiago de Chile, January 196677) and Paper Progrmnming Data and Criteria for the Pul Indiusty (Santiago de Chile, Decern1ber 19i (New York, 1963)o 3ar s in Latin America in F'A.0 . (United Nations), l er Developar (9) Africa the Near East, Vol. I and IIg Volums Yearbook of Forest Prodiuct Statistics, Annual Nos. 80-81, "'Unasylva"l, Vol. 16, Nho. 67 , 1962; Vol.e20, 1966; and Vol. 21, No. 84, 1967. No. 16 Wood: World Trends and Prospects, Basic Study 1/18), Forestry and Forest Products I-ndustries (ID/0OIF. June gl96TT~ and Organization for Economic Co-operation Developrent. Pu:Lp and Paper Statistics, 1965e BOOKS and Paper. The State Guthrie, John A., The Economics of Pulp College of Washi= hILbnan (Waeri7TI0;Ongt Thqnirnr & Co., Ltd.., SmaLl Pulp Mills., An Economic 0 Sandwell jrio n Publitshccl by the Oroi (Paris3 1960). Publishers Sven, A. Iydholn, PuIpinrg Procevsses lnterscience (NIew York, 196r)). Chaxzq aLn.d A-utrormtion in the Weinberg, E,'5 pact o.f Teclioloi.c.ll . j,rt i-ltn of Pulp and_aptir CtrGburiTti 1962). CO-i (S.-)lor 1§TD e.C OOctober 90 OTHER British Columbia Hytro and Power Authority. The Pu and P er I ia (Vancouver, octbr967 Canadian Pulp and Paper Association. Reference Tables (Montreal, July 1967). Miller Freemaan Publications. "Pulp and Paper", Vol. 39, July 19, 1965, and Vol.4.l, No. 29, July 17, 1967. United States Department of Agriculture, Forest Service. The Demandl and Price Situation for Forest Products 1967 (Mice 5~~ ction NTo.. :L0U67, 4vereI-19-(t7 United States Pulp Producers Association. Wood Pl3Sttistics, 31st Edition (October 1966) -