Demand for boxes has Fibre humming
Wednesday, August 4, 2004 7:22 AM PDT
By Courtney Sherwood
Printable version
E-mail this articleContinued strong markets in corrugated boxes are good news for Longview Fibre Co., which has taken advantage of seasonal demand to restart one of its three idle paper machines and hire and call back 30 workers.
High demand and low supply of corrugated medium, the paper that makes up the core of cardboard shipping boxes, means that Fibre's "business is the best it's been in years," said Steve Chercover, wood products industry analyst with the Portland brokerage firm D.A. Davidson & Co.
"Liner board and (corrugated) medium demand are very strong right now," Chercover said. "Demand is high, the best we've seen in years. Inventories are low. I don't see that changing over the course of the next year or so."
North American box makers reported increases in shipments in the second quarter of 2004 over the first quarter of the year, according to an article published Tuesday on paperloop.com, an online affiliate of trade magazine Pulp and Paper. Box prices rose between 1 percent and 3 percent in the quarter, paperloop.com reported.
Nevertheless, some of the 30 workers that Fibre called back in May to restart its No. 4 paper machine are nervous. The machine makes corrugated medium.
Don Mickelson, 58, was working on paper machine No. 4 when it was shut down in 2002. During the two-year shutdown he worked entry-level jobs at the plant, despite his 40 years' experience in the paper industry. He said his salary decreased by nearly $20,000 per year during that time.
Now that he's working as a machine tender on No. 4 again, he fears that the machine could be shut as soon as the end of August.
"Are you glad to be back on the job?" Mickelson asked. "Yes. I'm glad to be back on the job. It's bittersweet. How long is it going to last? I've been down for two and a half years. Now I'm back. In another month I could be back doing those entry-level jobs."
"There's a strain, not knowing if they're going to keep it running," said Terrey Tift, 55, a machine tender whose experiences mirrored Mickelson's.
When No. 4 was shut down, Tift saw her salary decline from $25 an hour to $16 an hour as she was given entry-level responsibilities, she said. "It was a big adjustment."
Now that her salary and responsibilities have increased, Tift said she and her husband, also a machine tender on No. 4, are trying to save money to prepare for another possible shutdown.
Although the demand for corrugated medium is high now, local workers' worries are not entirely unwarranted, analyst Chercover said.
"The fact that they shut it down a few years ago probably indicates that it's an expensive machine to operate," he said. "It's probably going to be the first to be shut down again when the demand goes down."
During the second fiscal quarter of 2004, Fibre's paper and paperboard net sales were $54.4 million, compared to $47.5 million during the same period a year earlier. Demand for paperboard, a category which includes corrugated medium, increased by 127 percent during the quarter, according to Longview Fibre's most recent quarterly report.
"Business is somewhat better," said Curt Copenhagen, Longview Fibre spokesman, "but how long No. 4 machine will run depends on market conditions."
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