Can you see me in the picture?

Newspaper woes send Longview plant seeking new customers
Sunday, February 1, 2009 12:14 AM PST
By Erik Olson @ TDN

The struggles of the newspaper industry are cutting into the core business at Longview’s Norpac newsprint plant, but the company is trying to “book” other business to compensate.

U.S. demand for newsprint — the paper newspapers are printed on — dropped 20.2 percent in October from the previous year, which was down 10.7 percent from 2006, according to the Pulp and Paper Products Council.

In response to declining revenues, many newspapers, including this one, are printing fewer pages and narrowing down “the web,” or width, of the paper.

“Narrower webs, reduced paper basis weights and fewer printed pages per newspaper all contribute to the current drop in demand for newsprint. The recent drop in advertising expenditures is also a major contributor to decreased paper demand,” Anthony Chavez, a Weyerhaeuser Co. spokesman, said Friday.

Norpac, also known as North Pacific Paper Co., opened in 1979 as a joint venture between Weyerhaeuser Co. and Japan-based Nippon Paper Products.

Weyerhaeuser initially controlled 80 percent the mill, but now the two companies have equal shares. Some of Norpac’s paper is sold in Japan, but figures were not available.

The mill, which employs about 500, is the largest newsprint manufacturer on the West Coast. Customers include the Seattle Times, the Wall Street Journal, the Gannett newspaper chain and Lee Enterprises, which owns The Daily News. The company’s average production is about 2,900 metric tons of paper per day, with a maximum production of 4,000 tons per day.

About half of its output is newsprint, and the other half is paper products used to produces paperback books, comic books and publication-grade paper, Chavez said.

The company’s foray into producing book paper five years ago has been growing, especially when it stumbles on a hit, Chavez said. Paper for the paperback copies of the “Twilight” novel series — a teen vampire thriller that got a boost from a movie last summer — was manufactured at Norpac, Chavez said.

“Breaking Dawn,” the third book in the trilogy, sold 1.3 million copies on its first day out last summer, and an additional 3 million copies have been ordered.

It’s a stable product line for Norpac, said Paul Latta, a forest-products industry analyst with Seattle-based McAdams Wright Ragen brokerage.

“It doesn’t seem like books are going to disappear soon,” Latta said.

However, the success of Norpac still is linked closely to the newspaper industry, which is struggling against the recession and Internet competition. Two Norpac-supplied metro daily newspapers — the “Seattle Post-Intelligencer” and the “Tucson Citizen” — are expected to close this spring unless an unlikely buyer emerges.

Nationwide, daily newspaper circulation fell 4.6 percent from March to September last year, and the rate is growing, according to the Audit Bureau of Circulations, which releases figures every six months.

Reducing news space, eliminating sections and cutting the number of pages of newspapers is becoming an industrywide trend, said Rick Edmonds, a media business analyst for The Poynter Institute, a St. Petersburg, Fla.-based journalism think tank.

“That all adds up to a fairly abrupt fall of demand,” Edmonds said.

Lee Enterprises, which owns 52 other daily newspapers in addition to The Daily News, cut its newsprint consumption 24 percent. Norpac produces newsprint for nine of those papers.

The cuts in production costs save newspaper companies money, but they can’t continue indefinitely or else readers will be turned off by the lessened value of the product, he said.

“My sense is that the industry itself realizes that (newspapers are getting) dangerously small,” Edmonds said.

Businesses are cutting their advertising budgets during the recession, which has hurt newspapers, Latta added.

“To the extent that the economy recovers, I suspect we’ll see a stabilization,” Latta said. “The newspaper industry is in a structural change because of the Internet.”

Readers are moving away from the printed newspaper, but they might come back, Latta said. After the VCR was invented in the early 1970s, movie theaters suffered a severe decline but rebounded as people rediscovered the joy of seeing films on the big screen, he said.

“Maybe the newsprint industry is in a similar sort of hit,” Latta said. Readers could grow tired of looking at computer screens all day in a decade, he added.

Newsprint demand isn’t slumping everywhere. Internet service is less prevalent in South and Central American countries and more regulated in Asia, leaving more people relying on the printed product for news, said Martin Hamel, vice president of the Pulp and Paper Products Council, a trade group based in Montreal.

“Long-term, the prospects are (in Asia and Latin America) better,” Hamel said. link, I am not in the picture.