THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, September 27, 1995 TAG: 9509270450
SECTION: BUSINESS PAGE: D3 EDITION: FINAL
SOURCE: BY FARRELL KRAMER, ASSOCIATED PRESS
DATELINE: NEW YORK LENGTH: Short : 38 lines
While newspaper publishers struggle to deal with soaring prices, newsprint manufacturers are breathing a sigh of relief.
For them, it's been a long time coming.
Back in the late 1980s, North American newsprint makers started building new facilities to meet growing demand for paper with more recycled content. That expansion took place roughly through 1991.
Just as the new mills started producing, however, global economic growth declined, newspapers began buying less newsprint and prices plummeted.
What followed for newsprint makers was a disaster that took prices as low as $410 a metric ton from a 1988 high of $610.
``It was probably the most major drop the paper industry has had since the Great Depression,'' says Virgil Horton, vice president of the paper group at the American Forest and Paper Association.
Today, prices are at an all-time high. At $750 to $760 a metric ton, newspapers are contending with newsprint costs that have almost doubled since their recent lows, set in early 1994. For newsprint manufacturers, the increase means they can finally make some money.
The years 1991 to 1994 were painful for newsprint sellers.
``We lost over $100 million in the newsprint business during that period,'' says Burton G. MacArthur, executive vice president at Champion International Corp. ``We lost money for 36 straight months.''
U.S. newsprint mills through July were running at 99 percent of their maximum capacity, Diverio says. Canadian mills were at 98 percent. by CNB