1. MARKET PULP FACTS

2. Market Pulp Overview Market size Production Consumption Pricing
Historical
Projected
Cost Structure
Trends

3. 2000 Global Pulp Market Size by Capacity
Affiliated Pulp Market
5,000-10,000 mm MT
$2,650,000- 5,300,000mm
Market & Integrated Pulp
C = 182,818 mm MT
$95,000,000 a mm
(Production = 168,000 mm MT)
Market Pulp
C = 45,609 mm MT
$24,000,000 mm
(Production b = 42,000 mm MT)
a Based on the 5-year average price of all pulp grades in USA and Europe ($530)
b Production is based on capacity * utilization rate
2001 Expected World Capacity = 47 million metric tons.
Source: RISI 2000

4. Market Pulp Market by Region
Market Pulp Capacity (in 000s tons) North America = 20,000 tons
Europe = 14,000 tons
Latin America = 6500 tons
Asia = 3800 tons
Other * = 1,700 tons
Total = 46,000 tons
* Other includes Africa and Oceania
Market Pulp Revenues (in 000s of dollars)
North America = $11,000,000
Europe = $7,000,000
Latin America = $3,000,000
Asia = $2,000,000
Other = $1,000,000
Total = $24,000,000
Source: RISI 2000

5. Market Pulp Flows in thousands of MT Zone 1 Zone 2 Zone 3 6,000 6,200
Total North American Market
Pulp Capacity: 20,000
Net Exports : -8,500
Total European Market
Pulp Capacity: 14,000
Net Imports: 6,000
Total Asian Market
Pulp Capacity: 3,800
Net Imports : 6,500
6,000
6,200
6,200
Total African Market
Pulp Capacity: 800
Net Exports : -150
Total Latin American Market
Pulp Capacity: 6,500
Net Exports: -3700
Total Australasian Market
Pulp Capacity: 900
Net Exports : -150
Source: RISI & PPPC

6. Market Pulp Market by Pulp Grade
Global
Market Pulp Capacity (in 000s tons)
NBSK = 12,000 tons
SBSK = 9,000 tons (Fluff Pulp = 2,700 tons = 30%)
NBHK = 5,000 tons
SBHK = 3700 tons
BEK/Tropical = 9,100 tons
Other = 7,200 tons
Total = 46,000 tons
Source: RISI 2000

7. Market Pulp Market by Pulp Grade
North America
Market Pulp Capacity (in 000s of tons)
NBSK = 8,000 tons
SBSK = 4,600 tons
NBHK = 3,000 tons
SBHK = 1600 tons
Other = 2800 tons
Total = 20,000 tons
Source: RISI 2000

8. Market Pulp Market by Pulp Grade
Europe
Market Pulp Capacity (in 000s tons)
NBSK = 4,000 tons
SBSK = 2,000 tons
NBHK = 2,000 tons
SBHK = 1,200 tons
BEK = 2,000 tons
Other = 2,800 tons
Total = 14,000 tons
Source: RISI 2000

9. Market Pulp Market by Pulp Grade
Latin America
Market Pulp Capacity (in 000s tons)
SBSK = 1,700 tons
SBHK = 500 tons
BEK = 3,700 tons
Other = 600 tons
Total = 6,500 tons
Source: RISI 2000

10. Market Pulp Market by Pulp Grade
Asia
Market Pulp Capacity (in 000s tons)
SBSK = 100 tons
Tropical Hardwood = 3,400 tons
Other = 300 tons
Total = 3,800 tons
Note: Capacity in Oceania and Africa (in 000s tons)
SBSK = 600 tons
SBHK = 400 tons
Other = 700 tons
Total = 1,700 tons
Source: RISI 2000

11. Market Pulp Production

12. Market Pulp Producers Global Market
About 150 pulp producers world wide
Top Pulp Producers (000s tons)
1- International Paper (2,890)
2- Weyerhaeuser (2,180)
3- Sodra-Cell (2,070)
4- Tembec (1,925)
5- Georgia-Pacific (1,815)
Source: RISI 2001

13. Market Pulp Producers North American Market
About 46 producers in North America
Top Pulp Producer (000s tons)
1- Weyerhaeuser (2,180)
2- International Paper (1,865)
3- Georgia Pacific (1,815)
3- Parsons & Whittemore (1,100)
Source: RISI 2001

14. Market Pulp Producers European Market
About 64 pulp producers
Top Pulp Producers (in 000s tons)
1- Sodra-Cell (2,070)
2- Stora Enso (1,565)
3- UPM-Kymmene (945)
4- ENCE (890)
5- Rottneros Bruk (755)
Source: RISI 2001

15. Market Pulp Producers Latin American Market
About 16 pulp producers
Top pulp producers (000s tons)
1- Arauco (1,530)
2- Aracruz (1,300)
3- CMPC (950)
4- CVRD (900)
Source: RISI 2001

16. Market Pulp Producers Asian Market
About 20 pulp producers in Asia
Top pulp producers (in 000s tons)
1- April (950)
2- Donghae Pulp (500)
3- Kiani Kertas (350)
4- Advance Agro (275)
Source: RISI 2001

17. Affiliate Pulp Producers
Total Global Affiliated Pup = 5-10 million metric tons
Europe = million metric tons
North America = million metric tons

18. Market Pulp Producers Global Market by Pulp Grade
Top Pulp Producers for Softwood (in 000s tons)
1- Weyerhaeuser (SBSK = 1,170; NBSK = 985; Total = 2,155)
2- International Paper (SBSK = 1,300; NBSK = 625; Total = 1,925)
3- Sodra Cell (NBSK = 1,500; Total = 1,500)
4- Canfor (NBSK = 1,325; Total = 1,325)
5- Georgia Pacific (SBSK = 1,200; Total = 1,200)
Top Pulp Producers for Hardwoods (in 000s tons)
1- Aracruz (BEK = 1,300; Total = 1,300)
2- APRIL (Tropical hardwood = 950; Total = 950)
3- CVRD (BEK = 890; Total = 890)
4- ENCE (BEK = 890; Total = 890)
5- International Paper (SBHK = 470; NBHK = 330, BEK = 15; Total = 815)
Source: RISI 2001

19. Market Pulp Producers Global Market by Pulp Grade
Global Sulphite Capacity = 1,440,000 tons
Global Unbleached Kraft Pulp Capacity = 2,150,000 tons
Global = Mechanical Pulp Capacity = 3,735,000 tons
Source: RISI 2001

20. Market Pulp Producers North American Market by Pulp Grade
Top Pulp Producers for Hardwood (in 000s tons)
1- Weyerhaeuser (SBSK= 1,170; NBSK = 985; Total = 2,155)
2- International Paper (SBSK = 820; NBSK = 625; Total = 1,445)
3- Canfor (NBSK =1,325; Total = 1,325)
4- Georgia Pacific ( SBSK = 1,200; Total = 1200)
5- Tembec (NBSK = 680; Total = 680)
Top Pulp Producers for Softwoods (in 000s tons)
1- Parsons & Whittemore (SBHK = 425; NBHK = 250; Total = 675)
2- International Paper (SBHK = 340; NBHK = 330; Total = 670)
3- Georgia Pacific (SBHK = 205; NBHK = 410; Total = 615)
4- Smurfit Stone (SBHK = 255; NBHK = 215; Total = 470)
5- Bowater (SBHK = 175; NBHK = 260; Total = 435)
Source: RISI 2001

21. Market Pulp Producers European Market by Pulp Grade
Top Pulp Producers for Softwoods (in 000s tons)
1- Sodra Cell (NBSK = 1,500; Total = 1,500)
2- Stora Enso (NBSK = 840; Total = 840)
3- Metsa Botnia (NBSK = 505; Total = 505)
4- UPM-Kymmene (NBSK = 360; Total = 360)
5- Iim Pulp (SBSK = 330; Total = 330)
Top Producers for Hardwoods (in 000s tons)
1- ENCE (BEK = 890; Total = 890)
2 = Stora Enso (NBHK = 440; BEK = 285; Total = 725)
3- Portucel (BEK = 625; Total = 625)
4- UMP-Kymmene (NBHK = 580; Total = 580)
5- Sodra Cell (NBHK = 470; Total = 470)
Source: RISI 2001

22. Market Pulp Producers Latin American Market by Pulp Grade
Top Producers for Softwoods (in 000s tons)
1-Arauco (Radiata Pine = 1,090; Total = 1,090)
2-CMPC (Radiata Pine = 545; Total = 545)
Top Producers for Hardwoods (in 000s tons)
1- Aracruz (BEK = 1,300; Total = 1,300)
2-CVRD (BEK = 900; Total = 90)
3- Suzano (BEK = 410; Total = 410)
4- Votorantim (BEK = 400; Total = 400)
5- CMPC (BEK = 350; Total = 350)
Source: RISI 2001

23. Market Pulp Producers Asian Market by Pulp Grade
Top Producers for Softwoods (in 000s tons)
1- Toyo Paper (SBSK = 45; Total = 45)
2- Nippon Paper (SBSK =30; Total = 30)
3- Daio Paper (SBSK = 15; Total = 15)
Top Producers for Hardwoods (in 000s tons)
1- APRIL (Tropical hardwoods = 950; Total = 950)
2- Donghae Paper (NBHK = 445; Total = 445)
3- Tanjugenim Lestari (NBHK = 425; Total = 425)
4- Kiani Kertas (NBHK = 350; Total = 350)
Source: RISI 2001

24. Market Pulp Consumption

25. Pulp Use in End Products
Grade of Pulp
Coated Free Sheet
Uncoated Free Sheet
Coated Ground Wood
Uncoated Ground Wood
News Print
Tissue
Diapers
Annual Reports
Art Paper
Xerographic
Formbonds
Envelopes
books
Magazine
Paper inserts
High-quality
newspaper
Newspaper
Mechanical
50%
85-100%
90-100%
NBSK
42%
25%
30%
SBSK
Or (25%)
Or (30%)
SBSK – Fluff Pulp Only
40%
NBHK
43%
60%
75%
SBHK
BEK 1%
Or (75%)
Other
14%
15%
15-20%
0-15%
0-10%

26. Market Pulp Consumption by End Product Global
Graphic Paper & Tissue Paper Capacity (in 000s tons)
CFS = 28,012 tons
CGW = 17,507 tons
UFS = 55,703 tons
UGW = 14,962 tons
Newsprint = 42,737 tons
Tissue E = 22,000 tons
E Tissue Capacity is estimated from Bank of America Pulp and Paper Quarterly
Source: RISI 2001 & Bank of America 2001

27. Market Pulp Consumers Global Market for Graphic Paper
About 500 paper producers worldwide
Top Producers of Graphic Paper (in 000s tons)
1- Stora Enso (11,844)
2- UPM-Kymmene (10,452)
3- International Paper (8,307)
4- Abitibi Consolidated (7,733
5- NSI (7,415)
6- Nippon Unipac (6,023)
Source: RISI 2001

28. Market Pulp Consumers Global Market for Coated Free Sheet Paper
About 20 big producers of Coated Freesheet Paper
Top Producers of Coated Freesheet (in 000s tons)
1- Sappi (2,987)
2-M-Real (2,395)
3-Stora Enso (2,391)
4-Nippon Unipac (1,688)
5-Mead/Westvaco (1,500)
Source: RISI 2001

29. Market Pulp Consumers Global Market for Coated Groundwood Paper
About 20 big producers of Coated Groundwood paper
Top Producers for Coated Groundwood (in 000s tons)
1- UPM-Kymmene (3,602)
2- Stora Enso (2,963)
3- International Paper (1,394)
4- NSI (988)
5- Burgo (926)
Source: RISI 2001
Source: RISI 200?

30. Market Pulp Consumers Global Market for Uncoated Freesheet Paper
About 20 big producers of uncoated freesheet
Top Producers for Uncoated Freesheet (in 000s tons)
1- International Paper (5,554)
2- Domtar (2,095)
3- Nippon Unipac (1,574)
4- UPM-Kymmene (1,520)
5- Stora Enso (1,514)
Source: RISI 2001

31. Market Pulp Consumers Global Market for Uncoated Groundwood Paper
About 20 big producers of uncoated groundwood
Top Producers for Uncoated Groundwood (in 000s tons)
1- UPM-Kymmene (2,005)
2 Stora Enso (1,792)
2- Abitibi (1,566)
3- NSI (1,547)
4- Myllykoski (814)
5- Nippon Unipac (657)
Source: RISI 2001

32. Market Pulp Consumers Global Market for News Print
About 20 top big newsprint producers
Top Producers for Newsprint
1- Abitibi (6,127)
2- NSI (4,840)
3- Bowater (3,609)
4- Stora Enso (3,184)
5- UPM-Kymmene (2,375)
Source: RISI 2001
Source: RISI 200?

33. Market Pulp Consumers Global Market for Tissue
About 10 big tissue producers
Top Producers for Tissue
1- Georgia Pacific (7,700)
2- Kimberly Clark (3,960)
3- Procter & Gamble (3,080)
4- American Tissue (880)
5- SCA (880)
Tissue production is estimated as the global capacity * market share
Source: Bank of America June 2001

34. Market Pulp Consumption by End Product North America
Graphic Paper & Tissue Paper Capacity (in 000s tons)
CFS = 6,112 tons
CGW = 5,292 tons
UFS = 15,522 tons
UGW = 5,465 tons
Newsprint = 16,016 tons
Tissue = 8,415 tons
Source: RISI 2001

35. Market Pulp Consumers North American Market for Coated Freesheet Paper
About 18 top CFS producers
Top Producers for CFS (in 000s tons)
1- Westvaco/Mead (1,652)
2- Sappi (1,035)
3- International Paper (1,311)
4- Stora-Enso (784)
5- Potlatch (445)
Source: RISI 2001

36. Market Pulp Consumers North American Market for Coated Groundwood Paper
About 15 top CGW producers
Top Producers for CGW (in 000s tons)
1- International Paper (1,261)
2- Stora Enso (1,183)
3- Mead (615)
4- United Paper Mills (520)
5- Repap (505)
Source: RISI 2001

37. Market Pulp Consumers North American Market for Uncoated Freesheet Paper
About 40 top UFS producers
Top Producers for UFS (in 000s tons)
1- International Paper (4,578)
2- Domtar (2,309)
3- Boise Cascade (1,579)
4- Willamette (1,410)
5- Weyerhaeuser (1,385)
6- Georgia Pacific (1,349)
Recently announced asset sales between GP and Domater and NSI and Pacifica have been incorporated
Source: RISI 2001

38. Market Pulp Consumers North American Market for Uncoated Groundwood Paper
About 22 top UGW producers
Top Producers for UFS (in 000s tons)
1- Abitibi (1,677)
2- NSI (746)
3- Bowater (683)
4- Stora Enso (631)
5- Kruger (431)
Recently announced asset sales between GP and Domater and NSI and Pacifica have been incorporated
Source: RISI 2001

39. Market Pulp Consumers North American Market for News Print
About 21 top Newsprint producers
Top Producers for Newsprint (in 000s tons)
1- Abitibi (5783)
2- Bowater 3,692)
3- Kruger (1,084)
4- NSI (1,043)
5- SP Newsprint (950)
Recently announced asset sales between GP and Domater and NSI and Pacifica have been incorporated
Source: RISI 2001

40. Market Pulp Consumers North American Market for Tissue
About 10 top Tissue producers
Top Producers for Tissue (in 000s tons)
1- Georgia Pacific (2,964)
2- Kimberly Clark (1,466)
3- Procter & Gamble (1,165)
4- American Tissue (375)
5- SCA (368)
6- Kruger (275)
Source: RISI 2001 Bank of America June 2001

41. Market Pulp Consumption by End Product Europe
Graphic Paper & Tissue Paper Capacity (in 000s tons)
CFS = 11,511 tons
CGW = 9,759 tons
UFS = 12,900 tons
UGW = 7,053 tons
Newsprint = 14,022 tons
Tissue E = 5,800 tons
Source: RISI 2001 & Bank of America

42. Market Pulp Consumers European Market for Coated Freesheet Paper
About 20 top CFS producers
Top Producers for CFS (in 000s tons)
1- M-Real (2,395)
2- Sappi (1,960)
3- Stora Enso (1,610)
4- CVC Capital (1,184)
5- Burgo (970)
Source: RISI 2001

43. Market Pulp Consumers European Market for Coated Groundwood Paper
About 17 top CGW producers
Top Producers for CGW (in 000s tons)
1- UPM-Kymmene (3,130)
2- Stora Enso (1,890)
3- M-Real (1,135)
4- Burgo (926)
5- NSI (790)
Source: RISI 2001

44. Market Pulp Consumers European Market for Uncoated Freesheet Paper
About 20 top UFS producers
Top Producers for UFS (in 000s tons)
1- M-Real (1,480)
2- Stora Enso (1,442)
3-UPM-Kymmene (1,170)
4- Portucel (823)
5- AWA (651)
Source: RISI 2001

45. Market Pulp Consumers European Market for Uncoated Groundwood Paper
About 20 top UGW producers
Top Producers for UGW (in 000s tons)
1- UPM-Kymmene (2,000)
2- Stora Enso (1,220)
3- NSI (800)
4- Myllykoski (550)
5- Holmen (425)
Source: RISI 2001

46. Market Pulp Consumers European Market for News Print
About 17 top UGW producers
Top Producers for Newsprint (in 000s tons)
1- Stora Enso (2,995)
2- UPM-Kymmene (2,375)
3- NSI (1,990)
4- Holmen (1,115)
5- SCA (555)
Source: RISI 2001

47. Market Pulp Consumers European Market for Tissue
About 7 top Tissue producers
Top Producers for Tissue (in 000s tons)
1- SCA (1,276)
2- Kimberly Clark (928)
3- Georgia Pacific (870)
4- M-Real (464)
5- CartoInvest (406)
Source: Bank of America June 2001

48. Market Pulp Consumption by End Product Latin America
Graphic Paper & Tissue Paper Capacity (in 000s tons)
CFS = 508 tons
CGW = 259 tons
UFS = 3,356 tons
UGW = 227 tons
Newsprint = 1,410 tons
Tissue E = 60 tons
E Tissue Capacity is sourced from Jacobs Sirrine
Source: RISI and Jacobs Sirrine

49. Market Pulp Consumers Latin American Market for Coated Freesheet Paper
About 18 top CFS producers
Top Producers for CFS (in 000s tons)
1- Votorantim (155)
2- Suzano (75)
3- Celulosa Argentina (45)
4- Kimberly Clark (45)
Source: RISI 2001

50. Market Pulp Consumers Latin American Market for Coated Groundwood Paper
About 8 top CGW producers
Top Producers for CGW (in 000s tons)
1- International Paper (190)
2- Klabin (50)
3- Carton S. A. (10)
Source: RISI 2001

51. Market Pulp Consumers Latin American Market for Uncoated Freesheet Paper
About 50 top UFS producers
Top Producers for UFS (in 000s tons)
1- International Paper (387)
2- Ripasa (291)
3- Suzano (270)
4- Bahia Sul (220)
5- Votorantim (177)
Source: RISI 2001

52. Market Pulp Consumers L.A. Market for Ucoated Groundwood Paper
About 10 top UGW producers
Top Producers for UGW (in 000s tons)
1- Ledesima (75)
2- Venepal Saca (25)
3- Celulosa Argentina (21)
4- Agaprint Informatica (20)
Source: RISI 2001

53. Market Pulp Consumers L.A. Market for News Print
About 9 top Newsprint producers
Top Producers for Newsprint (in 000s tons)
1- Durango (420)
2- CMPC (200)
3- Pisa (195)
4- Papel Presa (150)
5- Papeles Bio (120)
Source: RISI 2001

54. Market Pulp Consumers L.A. Market for Tissue
CMPC produces 60,000 tons of tissue paper a year
Source: RISI 200?

55. Market Pulp Consumption by End Product Asia & Oceania
Graphic Paper Capacity (in 000s tons)
CFS = 9,754 tons
CGW = 2,179 tons
UFS = 22,663 tons
UGW = 1,965 tons
Newsprint = 10,620 tons
Source: RISI 2001

56. Market Pulp Consumers Asian & Oceanian Market for Coated Freesheet Paper
About 20 top CFS producers
Top Producers for CFS (in 000s tons)
1- Nippon Unipac (1,667)
2- Oji Paper (1,333)
3- Daio Paper (491)
4- Mitsubishi (432)
5- Hokuetsu (431)
Source: RISI 2001

57. Market Pulp Consumers Asian Market for Coated Groundwood Paper
About 7 top CGW producers
Top Producers for CGW (in 000s tons)
1- Nippon Unipac (750)
2- Oji Paper (616)
3- Daio Paper (133)
4- Mitsubishi (132)
5- Hokuetsu (120)
Source: RISI 2001

58. Market Pulp Consumers Asian Market for Uncoated Freesheet Paper
About 20 top UFS producers
Top Producers for UFS (in 000s tons)
1- Nippon Unipac (1,574)
2- Oji Paper (787)
3- Advance Agro (361)
4- APRIL (350)
5- UPM-Kymmene (350)
Source: RISI 2001

59. Market Pulp Consumers Asian Market for Uncoated Groundwood Paper
About 8 top UGW producers
Top Producers for UGW (in 000s tons)
1- Nippon Unipac (512)
2- Marusumi (236)
3- Oji Paper (204)
4- Daio Paper (153)
5- Hokuetsu (92)
Source: RISI 2001

60. Market Pulp Consumers Asian Market for News Print
About 20 top Newsprint producers
Top Producers for Newsprint (in 000s tons)
1- Nippon Unipac (1,354)
2- Oji Paper (1,290)
3- Pan Asia Paper (1,275)
4- Daio Paper (600)
5- Aspex (430)
Source: RISI 2001

61. Price Discussion Price Drivers: Consumption/Demand Price Indicators:
Shipments
Inventories
Capacity/Supply
Price Indicators:
Magazine Ad Pages
Economy
Source: RISI 2001

62. Cost Discussion

63. Cost Discussion

64. Cost Discussion

65. Cost Discussion

66. Capacity Growth

67. Cost Structure by Region Freight Costs by Delivery Region
Source: Jacobs-Sirrine

68. Threats to North American Softwood Market
BEK (discussed on following slide)
Improving technology permits greater substitutability of softwoods by less expensive hardwood grades
TMP- (Thermomechanical pulp) because it can be produced onsite and can displace softwoods although this is a very low percentage.
Recovered Paper especially in newsprint
Greater use of minerals (clay and carbonate) replacing virgin fiber especially in supercalendered paper because surface is smoother and has higher printing quality
To be added

69. BEK
BEK threatens both the softwoods and hardwoods as it refines more readily than other hardwoods making it a more cost-effective substitute for softwoods
Unique quality characteristics (such as longer fiber length than other hardwoods) make it the preferred furnish for use in copy paper (high opacity) and tissue (softness)
Brazilians use 100% BEK in production of copy paper and Europeans moving in the same direction
1.5 million metric tons of BEK capacity expected to come on line during 2002 and 2003 (all in Brazil)
Brazilian BEK mills are world’s lowest-cost producers and currently stand at a cash cost of approximately US$170 – 180/metric ton