GLTPA's Director's Notes



Although disheartening, Billerud’s announcement not to proceed with a billion-dollar expansion should come as no surprise.  As stated by Billerud President and CEO Ivar Vatne, “After in-depth feasibility studies, evaluations, and supplier discussions, we have concluded that the projected return on investment is not sufficiently attractive to proceed with the conversion of Escanaba to cartonboard production.”  Several people and organizations like GLTPA, MAT, INVEST UP, MEDC and others worked for months supplying letters of support and lobbying efforts to assist in any way possible to make the conversion a viable project.  Their decision is based on economics and perhaps a clear understanding of the United States business climate. The good news is that the mill will remain in operation with smaller investments made for upgrades to supplement the growing containerboard industry.


At the direction of a small group of squeaky wheels, current and past administrations with their executive order pens bypassing Congress, continue to do nothing short of slowly dismantling the forest industry and demolishing the forests themselves. Clearly some administrations like the current one operate more on human emotion than science but no administrations in recent history since President Theadore Roosevelt have stepped up to fully support the forest industry. The push to revamp Forest Service Forest Management Plans to include “Old Growth” and “Mature” forests along with EPA rules such as “The Good Neighbor Plan, “and “PM 2.5,” have contributed to further deterioration of the wood consuming infrastructure, increased the cost of doing business exponentially, and eliminated access to forests in dire need of forest management to remain healthy. All evidence of the current unstable business climate.

The cost of equipment, parts, labor, trucks, and general living expenses have increased a minimum of 36% or more within the last 4 years and costs continue to rise annually with no end in sight.  All of which has been experienced by every forest industry association member throughout the United States.  Increased costs of constructing a new production line are one thing Billerud has mentioned consistently in its presentations and again in their recent press release announcing the cancellation of the Escanaba mill conversion.  Imagine budgeting $1 billion for a project only to have the cost increase by 36% before completion.  That’s like ordering a new forest machine without knowing what the price is until it is delivered and being locked into a binding contract to accept it.  It is this type of uncertainty that deters investment by industry and individuals.

In addition, forests and fields in the United States must now compete with billions of subsidized dollars authorized by the federal government for their very existence.  Think about it, how many thousands of acres have been cleared or consumed by solar panels, wind turbines, and housing, two of which have been subsidized under the falsehood of “saving the planet.”  If these alternate forms of energy had to perform competitively to sell electricity, they couldn’t do it.

The lack of tariffs on foreign products coming to the US is atrocious. American Loggers Council reported the U.S. is now the number one importer of softwood lumber.  According to the Environmental Investigation Agency (EIA) the U.S. is still a number one importer of Russian Birch. How is this possible?  Didn’t FSC and PEFC declare that any timber originating from the Russian/Ukraine invasion be declared “conflict timber?” Didn’t the European Union ban all timber imports from a Russian origin, and didn’t U.S. legislators strip Russia of its most favored nation status causing tariffs to increase by 50 %?  This may all be true however, Russia’s birch according to EIA, is now going from Russia to China to Vietnam to the U.S.  The term used for this wood is “Baltic Birch” which is apparently untraceable. If the EIA can trace it why can’t the U.S. government?

A long-time trend is foreign companies purchasing U.S. companies to get around tariffs. Canada owns multiple U.S. sawmills which is about buying out the competition to own the market. According to the Billerud press release and supported by market reports, they are shipping containerboard to the U.S., but it will not be produced here. While this is going on, U.S. companies are being forced into compliance with more regulation like the European Union Deforestation Rule which will be an additional cost making the U.S. less competitive.

On the paper side Green Bay Innovation Group has consistently reported that China either owns multiple American paper companies or China is suppling thousands of tons of paper to U.S. consumers without appreciable tariffs.  China has banned logging of its forests, so where is its wood coming from? The Chinese government is replacing multiple antiquated paper mills with state-of-the-art facilities whereby production is increased making them more efficient. How much support does the paper industry receive from the federal government or in some cases state government? I do not know but all indicators are that it’s little to none. Remember the Park Falls Paper Mill? I rest my case.

According to a LinkedIn post by Marcello Collares’, Sales, Strategy, New Business Vice President at Fisher International, Inc. “The American Forest & Paper Association (AF&PA) has released the 64th Paper Industry Annual Capacity and Fiber Consumption Survey, providing data on U.S. paper industry. “Four machines totaling 2.1 million tons of containerboard and packaging paper capacity started up during 2023, all using 100 percent recycled fiber. However, more than 1.7 million tons of capacity, mostly using wood fiber, was permanently removed in 2023 as the industry faced demand weakness from customer destocking and economic headwinds.”  That helps explain why Michigan loggers cash flow, conservatively, dropped around $60 million since 2021 and that does not include income lost since the closing of Wisconsin Rapids.

While the U.S. is falling behind for the various stated reasons, Brazil, Chile, and others are expanding. On May 2nd, 2024, “PaperAge” reported that CPMC signed an agreement with the State of Rio Grande do Sul, Brazil for a project to include a new pulp mill.  The project, as stated in the article, is an investment of approximately $4 billion.  On April 26th, 2024, “Tissue Online” reported that Eldorado announced R$ 25 billion investments for the construction of a new mill in Brazil. The facility will increase production from 1.8 million tons to 4.4 million tons of pulp. The construction will create 10,000 jobs with an additional 2,000 jobs when the project is completed. Included with the addition of the mill in Mato Grosso do Sul, Brazil, the company plans to build a 90-kilometer railroad. Another LinkedIn post from UPM states the following “Exciting news! UPM’s first pulp transport by rail ran successfully in Uruguay this week when a train consisting of a locomotive and 14 wagons travelled from the Paso de los Toros pulp mill to UPM’s port terminal in Montevideo. This was also the maiden voyage of the Ferrocarril Central, Central Railway project of the Uruguayan Ministry of Transport and Public Works.”

On February 2, 2024, another article in “Tissue Online” states the following. “New pulp capacity additions in the global market, such as UPM’s new mill in Uruguay, Arauco’s Mapa project in Chile, in addition to the imminent start-up of the Cerrado de Suzano project, are already being reflected in China, the destination of most of the raw material exported from Brazil and responsible for setting the price trend in the sector. The commodity has been tight for approximately eight consecutive months and is currently losing strength in the Chinese market, although it is still holding up in Europe and the United States. Despite this context, producers claim that there is room to implement the increases announced for the first months of the year. Among them, Suzano recently announced a pulp price adjustment for February, although only for the European and North American markets. The company’s new mill, located in Ribas do Rio Pardo (MS), will have an installed capacity of 2.55 million tons and is expected to start operations at the end of the first half of the year.”

“The company will add a significant volume to the supply, which generates an expectation of price volatility, even with a gradual entry into the market. By 2024, Suzano expects to sell around 700 thousand tons of the new mills production.” In addition to building new mills, “Valor International Business” reported that Suzano made a $15 Billion offer to purchase International Paper which is an American company. The article states the potential purchase is “a significant step in its internationalization strategy.” Based on experience what this means is that more U.S. pulp capacity will be lost and will be supplied by their new, more efficient mills in Brazil.

While some may read this as a lot of negative news, it is intended as a long-overdue report to show that we truly are in a global market which is something the GLTPA Board of Directors knows and understands better than most because they are more exposed to it. Ever hear that saying that states “There are three types of people in the world, those who make things happen, those who watch things happen, and those who wonder what the hell did happen.”  An example of those trying to make things happen are folks like the GLTPA/FISTA Boards and Timber Professionals Cooperative Enterprises. Those who are watching things happen are the bystanders waiting for someone else to make the first move, and those who wonder what the hell did happen are those who do not like change and sit around reminiscing and wishing things could go back to the way they were 20 or 30 years ago.

While it is human nature to protect one’s own piece of the pie as it stands today, the world around us is capitalizing on U.S. inefficiencies, and gaining market share of pulp production which should be based in the United States just like the softwood lumber production which is now imported at the highest amount ever.  Why aren’t U.S. companies buying Brazilian or Chilean companies?  Whatever the reason, the tide needs to turn if there is any hope of having healthy forests for the future.

Uruguay starts a new rail system with special cars for hauling pulp to the port for global shipment. Meanwhile, the Great Lakes Region struggles to replace short line rail after a major carrier decides running coast to coast is more profitable. Truck weights are all over the board. According to internet information, Finland weights run from 61,600 lbs. on 3 axles to 167,200 lbs. on High-Capacity Vehicles.  Canada hauls from 102,300 lbs. on a tractor semitrailer to 138,380 lbs. on a truck and full trailer. Brazil hauls 88,000 lbs. on a Tractor Truck, 125,400 lbs. on a B-Train, and 162,800 lbs. on a Long Combination Vehicle.  The only weights found for Uruguay and Chile was that they are placing 99,000 lbs. in intermodal containers for transport. And of course, Michigan comes in 164,000 lbs.

I have always been a firm believer that if a person or organization is looking for a certain result, the prudent thing to do is find someone who has that result, do what they did, and get that result. Since Brazil seems to be leading the pack, maybe it’s time for a group of loggers, mill representatives, and trucking specialists to go to Brazil together and see what they’re doing firsthand.  Granted, the Great Lakes Region will not be able to grow the timber as fast, but the trees must still be harvested, transported, and made into something before real value is added.  Although depleted in comparison to ten or twenty years ago, the Great Lakes Region is fortunate enough to have forests, a mill infrastructure, and logging capacity left.  Based on the examples within this message, internationalization is in full swing.  The choices are that we can either make things happen or watch things happen for a while longer and hope the tide turns on its own, or wind up sitting on the porch reminiscing about the good ole days.

Until next month,




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The Great Lakes Timber Professionals Association (GLTPA)

Provides proven leadership in the Lake States Forest products industry for over 70 years. GLTPA is a non-profit organization proud to represent members in Michigan and Wisconsin and is committed to leading Forest Products Industry in sustainable forest management.

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