PULP AND PAPER.

Auckland Star, Volume LXIV, Issue 16, 20 January 1933, Page 2

PULP AND PAPER.

POSSIBILITIES IN N.Z. FACTS FROM ABROAD. COSTS AND MARKETS.

(By L.C.W.)

Pulp and paper manufacture are among the world's greatest industries. In Europe, Scandinavia and Great j Britain are leaders, t-lie former in pulp 'and paper, the latter mainly in the conversion of imported pulp into all classes of paper and allied products. Across the Atlantic, Canada and the United States monopolise the business, and the former now exports more than the rest of the World combined. The reasons for tin's are two. For success you have to have in juxtaposition the water power for generating electricity, as well as river or Sea transport for the raw material and finished product, and large and accessible areas of suitable forest. Canada is a country that fulfills these requirements almost 100 per cent. The location of a mill is mainly determined by the presence of water power that can bo economically harnessed to

tho needs of the industry. There are mills that produce for • their own purpose more units of electricity than are generated at Arapuni. Canada is the best country to examine in any attempt to gauge the elements that constitute the essentials in a successful development of this industry. Several of the large companies in the United States have adopted a policy of shutting down tlieir old home mills and building new mills in Canada to equal or exceed their previous production. In 1930 there were 32 mills making pulp only, 40 combined pulp and paper mills, and '28 mills making paper only. But tho present trend is towards the building of the larger combined mills of the type known as ''self-contained newsprint mills," and toward the merging of individual companies into a comparatively email' number of large groups.

Production Figures. The quantity of pulp made in Canada in 1930 was 3,019,345 short tons, of a value of 112,355,872 dollars, or approximately £0 per ton. It is the immense capital figures that must etartle those used to dealing in less spectacular finance. The properties of one of the moderately-eized combined mills, according to the 1932 balance-sheet, are valued at over £5,000,000, and with all these assets tho profit shown was only just over £40,000, owing to depressed trade conditions. It ha 3 been noted that the movement is towards the combined pulping and newsprint mill, and the reason for this is that the output that is necessary for economic newsprint production is 100,000 tons per annum, of 22401b, and with such production it pays to be self-contained as far as possible.! This output entails a four-unit plant, I each with a daily capacity of 1001 tons. The cost of such a plant, j with its accessories, oven in England where the machinery is made, would be £1,750,000. Such a mill could not be erected in New Zealand for less probably than £3,000,000. Canadian and English opinion is agreed on the point that production on a lesser scale has become an uneconomic proposition, and that those engaged in manufacture in a small way, in almost all cases, will bo eliminated by competition. At present it would be difficult to suggest any reasonable outlet for tonnage which might be manufactured in New Zealand in excess of homo consumption. This, at the present time, represents only about 20 per cent of the normal annual output of a modern plant.

Output and Prices. No large mill anywhere is now working to capacity, and in some cases plants that ran from midnight Sunday, to midnight Saturday, year in and year out, are now only running half-time. It is the colossal nature of the enterprise that anyone viewing the matter from the | standpoint of New Zealand possibilities, must consider. In Newfoundland a sixunit plant has timber limits up to two and a half million acres. It was in Newfoundland that a disastrous attempt was made _to establish a mill with British capital just after the close of the war. Some millions of pounds wei'e lost in the enterprise. Of course, there are a Variety of products, more especially various klhds of building boards and materials which are based on wood pulp. The World's Paper Trade Review of August 10 gives the prices for various descriptions of chemical pulp delivered at English ports as follows:—

Sulphite, Bleached Spl. Qualities ...... £9 15 15 0 Bleached Ist CJuals. 0 15 o—lo 15 0 Easy Bleaching Quality 8 5 0 — S 15 0 Strong Best Grades 7 10 0— T 15 0 Sulphite "News' or C > ? t^ on £ Quant* - 7 0 0—750 Sulphate, Easy Bleaclilug, Ist Quals. , 8 0 0— 8 5 0 Kraft, Prime Quals. . 7 5 7 15 0 Kraft Special 7 5 0— 7 15 0 In New Zealand practically all the materials used in the manufacture of chemical wood pulps would have to be imported. The price of mechanical wood pulp, also delivered at tJnited Kingdom ports, according to the same trade journal, varies from £2 to £2 12/G for that 50 per dent moist and from £5 10/ to £C 15/ for the dry. lliere have been several tentative proposals to manufacture newsprint in New Zealand, but the total consumption of the country is_ so small, comparatively, that if ail other factors were favourable, an export would be essential to success. And it is liot to be expected that this country could enter into unpro-

tected competition with the imm.. organisations and aggregations 3® tal on the other side of the world, n? is a mill in the Dominion produZ kraft paper (used largely for wMnni!! 8 parcels), but here consumption ft 1 tirely local and there is a duty 0 f fin (with surtax £8) per ton on th e 8 ported article if of British oriS" loreign is subject to a duty of fin plus surtax. It seems certain that ttU class of paper could not go in comnJtion abroad, where the price is below £ per ton, f.0.b., Canadian ports. It will be seen that there are n™ points to consider in examining 7 possibilities of establishing L g and paper business in New besides the supply 0 f wood. ftinS among them are water carriage X water power, abundant finance Zi P most important of all, some assign!' of profitable outside markets.