This is a good news/bad news story.
No matter where you live in Northwestern Ontario, the forest product industry is important to the local company (as the biggest earner of foreign exchange, it’s a big part of the national economy, too).
A basic change has happened in the industry–recycling old newspaper (ONP).
In the early 1980s, recycling paper became a necessity. American state governments decided to reduce the waste stream going into landfill sites. Paper took 18 percent of the space.
Publishers were told they had to recycle paper. The publishers told Northwestern Ontario and other producers to add 20-40 percent recycled paper to the virgin fibre.
Today, ONP is collected in the U.S., hauled to Canada, repulped, de-inked, and added to virgin fibre. The finished product is shipped back to the U.S.
When state governments began pressuring publishers, it was predicted that new mills would be built near the urban ONP supply. It’s happening. An example is Connecticut Newsprint LLC. Plant construction begins in mid-1998, and production in mid-1999.
ONP will be its only raw material. ONP will be “harvested” in Connecticut and adjoining states. The finished product will be sold in the U.S. northeast and mid-Atlantic states.
Connecticut Newsprint LLC’s competitive advantage is big. Here are examples:
- Transportation
- ONP collected in the U.S. is hauled to Canada. About 15 percent of ONP’s bulk is waste that becomes a Canadian disposal problem.
- Some Canadian producers cut haulage costs by using the return haul for ONP. Even so, transportation costs will be much cheaper for the new Connecticut mill.
- Manufacturing cost
- Using trees requires a large harvesting system to feed the mills. Once at the mills, virgin wood must be boiled in a chemical bath to free the fibre. ONP only has to be processed to remove ink.
- All other preparation was done the first time around. While de-inking ONP isn’t simple, it isn’t as costly as using virgin fibre.
- Public relations
- All tree-based paper companies have an ongoing public relations problem. Cutting down the forests is unpopular. Compare that to the public reaction to recycling waste into something useful.
- In addition, less land has to be dedicated to landfill sites.
This is both good and bad news for Northwestern Ontario.
The good news is that fewer trees have to be cut. The waste stream is reduced so humans live lighter on the Earth. Pressure on the forest decreases. Outdoor tourist businesses, environmentalists, and wilderness advocates will be pleased.
ONP is cheaper to process than virgin wood so costs are lower for NWO producers.
The bad news is low-cost urban mills threaten jobs here. Loggers don’t cut and haul ONP. Nor do governments collect stumpage fees for ONP. Cost pressures also threaten mill jobs.
Our old mills have to complete for improvement money with new mills in the urban forest. Anything that displaces Canadian products in foreign markets is a serious problem.
There is a downside to everything–even something as popular as recycling.
Cliff McIntosh is a futurist, organization effectiveness advisor, author, and president of Quetico Centre.
