An Assessment of the Economic Contribution of Pulp, Paper and Converting to the State of Wisconsin Prepared for the Wisconsin Economic Development Corporation by the Wisconsin Institute for Sustainable Technology August 5th, 2019 Acknowledgements This report was prepared by the Wisconsin Institute for Sustainable Technology, a unit within the College of Natural Resources at the University of Wisconsin-Stevens Point. The institute is grateful for the assistance of the Wisconsin Paper Council, which facilitated connections with many professionals within the paper industry, including partnering to host two events at which preliminary results were shared with industry representatives and state and local policy makers, and where further insights were gained from attendees; a special thanks to Scott Suder, president of the Wisconsin Paper Council. In addition, the institute thanks the many professionals within Wisconsin’s pulp, paper and converting industries who graciously shared their time in face-to-face and phone interviews, provided details on their operations and offered their insights on the state of the industry. The Wisconsin Economic Development Corporation funded this research and report. The report could not have been completed without the help of each of these individuals and organizations. 2 Contents Acknowledgements .................................................................................................................................................. 2 Executive Summary .................................................................................................................................................. 5 Structure of this report ............................................................................................................................................. 7 Introduction ............................................................................................................................................................... 8 North American Industry Classification System ................................................................................................. 8 Paper Manufacturing ........................................................................................................................................... 8 Pulp, Paper and Paperboard Mills (NAICS 3221) ............................................................................................ 10 Converted Paper Products (NAICS 3222) ......................................................................................................... 10 Diversity of pulp and paper grade production in Wisconsin ............................................................................ 12 Economic impact or economic contribution ..................................................................................................... 12 Specialty paper ................................................................................................................................................... 13 Wisconsin’s Paper Manufacturing Industry in the National Context ................................................................... 16 Industry shipments ............................................................................................................................................ 16 Paper manufacturing employment ................................................................................................................... 17 Paper manufacturing payroll ............................................................................................................................. 18 Paper industry facilities by state: pulp and paper mills ................................................................................... 19 Paper industry facilities by state: converting facilities .................................................................................... 20 Exports of Wisconsin’s paper manufacturing sector ....................................................................................... 21 Manufacturing sector employment in Wisconsin ............................................................................................. 24 Total employment in Wisconsin’s paper manufacturing industry by year ...................................................... 25 Employment within mills (pulp, paper and paperboard) ................................................................................. 26 Industry compensation ...................................................................................................................................... 28 Average pay by sector ........................................................................................................................................ 28 Economic Contribution of Wisconsin’s Paper Manufacturing Industry, by County ............................................ 30 Paper manufacturing establishments .............................................................................................................. 30 Distribution of paper manufacturing industry employment in Wisconsin ...................................................... 32 Paper manufacturing as a proportion of all manufacturing ............................................................................ 33 Number and distribution of pulp, paper and paperboard mills ...................................................................... 34 Pulp, paper and paperboard mill employment distribution ............................................................................ 35 Employment change within paper mills 2015-2017 ....................................................................................... 36 Number and distribution of all converting establishments ............................................................................. 37 All paper converting employment distribution ................................................................................................. 38 Paperboard container manufacturing employment distribution .................................................................... 39 Employment trend in paperboard container manufacturing .......................................................................... 40 Employment change in paperboard container manufacturing from 2015 to 2017 ..................................... 41 Paper bag and treated and coated paper manufacturing employment distribution ..................................... 42 3 Employment trend in paper bag and coated and treated paper manufacturing ........................................... 43 Stationery product manufacturing employment distribution .......................................................................... 44 Employment trend in stationery product manufacturing ................................................................................ 45 Employment change in stationery product manufacturing from 2015 to 2017 ........................................... 46 Sanitary paper product manufacturing employment distribution ................................................................... 47 Employment trend in sanitary paper product manufacturing ......................................................................... 48 All other converted paper product manufacturing employment distribution ................................................. 49 Employment trend in all other converted paper product manufacturing ....................................................... 50 All Wisconsin and County-by-County Economic Contribution Data ..................................................................... 51 Key findings of the economic contribution of the paper manufacturing industry in Wisconsin ................... 52 County-by-county tables of economic contribution data ................................................................................. 54 Insights into Wisconsin’s Pulp, Paper and Converting Industries: Results of Interviews and Surveys ........... 96 Taking the Temperature of the Pulp, Paper and Converting Industries .......................................................... 101 Adaptation and Innovation: Brief Examples in the Industry ............................................................................. 105 The Appleton Coated – Midwest Paper story ................................................................................................ 105 Domtar looks to new market opportunities ................................................................................................... 106 Convergen Energy ........................................................................................................................................... 107 Channeled Resources ..................................................................................................................................... 108 Terms and Definitions ......................................................................................................................................... 110 Sources ................................................................................................................................................................ 111 4 Executive Summary Wisconsin’s pulp, paper and converting industries generated $18.16 billion in economic output and employed 30,262 workers in 2018. Collectively, the paper industry is the fifth-largest manufacturing sector in Wisconsin. Wisconsin’s paper industry is significant not only within the state: