Thursday, February 05, 2009

What's wrong with this picture?

There's no smoke/steam coming from those paper mill stacks. The graveyard in the foreground has consumed the paper mill. This particular mill may rise from the dead but it was struggling to survive before the economy tanked.

Unfortunately, this is a common story these days. In my short career (16 years), I've seen the industry go through several market cycles but with each down turn more capacity has been moth balled.

Market conditions can change quickly too. I've seen a huge recycle plant closed that was about 10 years old and I've seen a paper machine closed that probably had less than 700 days on it. Both were economically viable when built but rapid changes in energy costs, taxes and market demand changed that.