North American Tissue Producers Invest Over $1.3 Billion in New Machinery

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Within the paper industry, producers of tissue products have been the most active in terms of capital spending and the installation of new machines. During the period of 2001 through 2004, North American producers will have made over $1.3 billion in capital outlays towards grassroots mills, new paper machines and converting lines, and rebuilds of existing machines. Though some older, inefficient mills have recently shuttered, advancements in technology and growing regional markets will continue to fuel capital spending. For instance, Georgia-Pacific Corporation (NYSE:GP)(Atlanta, Georgia) permanently idled two paper machines in Maine, but will relocate and upgrade the machines to another G-P mill in New York, meanwhile, serving the same customer base.

Click on the table at right to view a listing of tissue expansion projects under construction between 2001-2004.

One of the projects, which will begin construction this summer, is the addition of a third tissue machine at Procter & Gamble Paper's (a subsidiary of Procter & Gamble (NYSE:PG)(Cincinnati, Ohio)) tissue and towel complex in Cape Girardeau, Missouri. The new thru-air-dried machine will come online late 2004 or early 2005.

Because tissue products are generally considered to be a necessity, compared to other paper grades, the strength of the economy weighs little when it comes to consumer demand. Globally, tissue production averages around 25 million tons annually, of which North American mills accounts for nearly half.