Chinese Babies Save US Paper Mill Jobs
China’s surging demand for disposable diapers is helping US paper makers keep open mills that would otherwise be shuttered, throwing thousands out of work.
A case in point is International Paper’s giant mill in Franklin, Virginia. After producing white office paper for generations, it was forced to shut down as the internet continues to destroy the demand for copier paper. The closure cost the town of 8,500 1,100 jobs tied to the mill.
But in mid September a part of the mill was reopened with a fifth of its former workforce to meet the demand for disposable personal-care products like diapers and sanitary napkins from a burgeoning new middle class in China, India and southeast Asia.
Rildo Martini, IP vice president and general manager for pulp, sees “a huge, huge opportunity” in the niche. That’s because, unlike paper which can be manufactured more cheaply elsewhere in the world, including Asia, fluff pulp can only be made from the long, coarse fibers of the loblolly pine, a fast-growing variety that thrives in the American South. Ground, boiled, bleached and pressed, it becomes the puffy white material that provides the absorbing power in diapers and other products.
Fluff pulp accounted for only 2% of IP’s global sales of 450 million tons of paper and pulp in 2011 but, unlike paper, the demand for which is shrinking rapidly, the demand for fluff pulp is growing about 4% a year. What’s more, that demand is projected to continue for generations as several billion people join the middle class.
Other US paper makers have made up for shrinking paper demand by expanding their fluff production. Among them are Georgia-Pacific LLC, the world’s biggest fluff producer, and Montreal-based Domtar Corp.
