REVIEW: Canadian P&P lost $175M in 2003
February 10, 2004 By Pulp & Paper Canada
The Pulp and Paper Products Council’s year-end industry review reported that based on preliminary data, it is estim…
The Pulp and Paper Products Council’s year-end industry review reported that based on preliminary data, it is estimated the industry lost $175 million on its pulp and paper operations, excluding unusual items.
The soaring loonie and higher transportation costs contributed to a further deterioration in the industry’s financial performance.
Canadian pulp and paper shipments increased 0.4% in 2003, to 30.7 million tonnes, but domestic sales fell 2% compared to 2002.
Increased sales offshore helped compensate for the declines in North America. Shipments overseas rose 4.3%, supported by a recovery in newsprint shipments to Asia and a 39% increase in market pulp shipments to China.
In spite of the slightly higher volumes, the industry’s financial performance weakened due to the rising loonie.
Shipments to the U.S. dropped 1% due to weak demand and an increase in paper imports from offshore. The only gains in the North American market were in shipments of mechanical printing papers to the U.S.
Capacity to manufacture pulp and paper increased 0.5% in 2003, with machine closures largely offsetting efficiency gains and incremental additions.
Pricing marginally improved. The average U.S. dollar product price increased by 6%, but was more than offset by a 12.4% increase in the average value of the Canadian dollar.
Capital employed in the pulp and paper sector totaled approximately $32 billion in 2003.
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