PULP AND PAPER

Hawke's Bay Tribune, Volume XXIII, Issue 77, 13 March 1933, Page 9

PULP AND PAPER

DOMINION POSSIBILITIES 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 Britain are leaders, the 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 I his are two. For success you have to have in juxtaposition the water power t'or generating electricity, us 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 tho presence of water power that can be economically harnessed to the needs of tho industry. There are mills that produce for their own purpose more units of electricity than are generated at A rapuni. 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. PRODUCTION FIGURES. The quantity of pulp made in Canada in 1930 was 3,619,345 short tons, of a value of 112,355,872 dollars, or approximately £6 per ton. It is the immense capital figures that must startle those used to dealing in less spectacular finance. The properties of one of the moderately-sized 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 has been noted that the movement is toward 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 22401 b, and with such production it pays to be self-contained as far as possible. This output entails a four-unit plant, each with a daily capacity of 100 tons. The cost of such a plant, with its accessories, even 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 tho 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 be 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 home consumption. This, at the present time, represents only about 20 per cent, of the normal annual output of a modern plant. POSSIBILITIES IN N.Z. In New Zealand practically all the the materials used in tho manufacture of chemical wood pulps would have to be imported. The price of mechanical wood pulp, also delivered at. United Kingdom ports, according to “The World’s Paper Trade Review,” varies from £2 to £2/12/6 for that 50 per cent, moist and from £5/10/- to £6/15/for the dry. There have been several tentative proposals to manufacture newsprint in New Zealand, but the total consumption of the country is so small, comparatively, that if all other factors were favourable, an export would be essential to success. And it is not to be expected that this country could enter into unprotected competition with the immense organisations and aggregations of capital on the other side of the world. There is a mill in the Dominion producing kraft paper (used largely for wrapping parcels), but here consumption is entirely local and there is a duty of £lO (with surtax £8) per ton on the imported article if of British origin. Foreign is subject to a duty of £.lO/10/- ; plus surtax. It seems certain that this class of paper could not go in competition abroad, where the price is below £2O per ton, f.0.b., Canadian ports.

It will be seen that'there are many points to consider in examining the possibilities of establishing a pulp and paper business in New Zealand, besides the suppl yof wood. Principal artiong them are water carriage, cheap water power, abundant finance, and, most important. of all, some assurance of profitable outside markets.