Impact of Forest Bio Y on the Economics of Corrugated Box

The impact of wood quality on pulp and paper manufacture is underemphasized by mills, bu potential for improving mill economics, product quality and product differentiation. Increases higher specific gravity, decreased lignin content, and reductions in basis weight due to lower angle (MFA) represent opportunities for wood quality improvements to positively impact p manufacturing. To estimate the economic potential we determined the value to t provides important in pulp yield due to cellulose microfibril ulp and paper a kraft linerboard mill of changes in model that includes economic impact of of a box plant. The weight. Sensitivity analysis of the box plant model with reduced linerboard basis weight shows that for each 2 lb decrease, box plant n cost decreases by 1.2%. Based on empirical data obtained with young loblolly pine trees, we predict that when the average MFA is decreased from 30 to 18 degrees the basis weight of 42 lb/msf linerboard can be reduced ight would increase d cost savings and tree properties – in particular, decrease in microfibril angle with a multidimensional cash flow loblolly pine plantation forestry and pulp and paper mill costs. We have now extended the wood quality changes in linerboard to a box plant, using a newly developed cash flow model box plant model makes a total of 36.5 million medium, large, and jumbo (1:2:1) boxes per year. There is a significant impact on box plant economics as a result of reducing linerboard basis productio to 36 lb/msf and still meet the short span STFI requirements. Such a reduction in basis we annual box plant net income by 9%. The details of our approaches, assumptions, estimate potential impacts of biotechnology on box plant profitability are presented. Introduction The United States produces the most corrugated boxes in the world. Products in this area are di combined board, folding cartons and set-up boxes. In recent years, these products have accoun than half of the industry’s total paper and paperboard production (1). In 1999, 30.1 percen corrugated was produced in the United States but overall pulp and paper industry production h second half of 2000. During 2002 and 2003, the paper and paperboard sector faced the same o including a soft U.S. economy, weak prices, continued downtime and higher manufacturing co countries (1). vided between ted for slightly more t of the total world as declined since the bstacles as in 2001, sts in the developed In recent years there has been significant merger activity attempting to counteract overcapacity to better match ess of linerboard and n the last five years. rfit Stone Container a 72% market share viewed their overall operations, closed some mills, and shut down inefficient machines to bring supply more in line with demand. But as industry removed capacity, demand dropped, exports declined, and imports increased such that overcapacity in the United States still exists (3). It is clear that paper companies in the United States are at a point where they must find new ways to increase their profitability. The present research focuses on one of the most important branches of this industry: corrugated containers. Since up to 60% of the total cost of corrugated container manufacturing is the raw material, an approach for evaluating the impact of wood and fiber traits on the production costs of this product was developed (Figures 1 and 2) (4). A potential long-term solution to decreasing raw material costs is to apply biotechnological methods to improve trees for pulp and paper production. By using this approach companies can not only cut costs in the supply and demand to help stabilize price fluctuations and thereby improve global competitiven box makers. Specifically, the market picture for the corrugated container industry has changed i As a result of mergers, acquisitions and consolidations, the industry’s “Big 5” producers – Smu Corp., International Paper, Georgia-Pacific, Weyerhaeuser, and Temple-Inland in 2002, had compared with only 45% in 1993 (2). With this larger market share, these companies have re production of combined board but also, generate better quality products. For example, if compressiv increased (e.g., by decreasing wood microfibril angle), significantly less fiber could be used in th compressive strength defines the ability of a container to sustain the loads imposed from warehouses. The cost modeling presented was accomplished with a forest cost model for lobl based on the growth and yield equations developed by e strength were e finished box since stacking boxes in olly pine plantations the University of Georgia, an integrated kraft pulp and linerboard mill model and a box plant model developed by Jaakko Pöyry Management Consulting (JPC) under t to the Institute of Paper Science and Technology (IPST).