Wisconsin has a large number of corrugated plants in Wisconsin, USA, and International based companies with plants in Wisconsin. However, we have seen China and Indonesia based companies purchase USA companies and we expect the acquisitions will continue. We have seen Asian companies control upwards to 35% of the USA recycled pulp market and with Paper Excellence recent conversion of a printing paper machine to packaging, it will increase to 40-45% of recycled pulp putting pricing pressure and availability on USA based companies. We have seen Asian companies dominate the uncoated FREE SHEET market share at 35% plus in the USA. The Asian and Indonesian companies are integrated companies owning their own pulp manufacturing capabilities and ownership of major pulp mills across the globe! They will be able to import pulp into the USA at low costs that American manufactures will not be able to compete! We can anticipate the Asian and Indonesia based companies will be purchasing more companies in the USA especially in converting and packaging! We have seen USA companies shut down older plants and add new plants in the USA.
The Amazon effect has had a substantial impact on corrugated packaging. It should continue to grow! Unfortunately, 44% of products sold on Amazon in the USA from Asia are TAX FREE! 70 to 80% of Walmart products are coming from Asian Companies.
This past 5 years has been a bright spot for Wisconsin and USA Paper, Pulp and Corrugated Industries! However, we are experiencing weakened demand for corrugated boxes and other products. We saw in the fourth quarter a drop in containerboard production. We are seeing in the first 6 months of 2023 more downtime, shutdowns of older facilities and companies putting on hold expansion plans. We have seen downward pressure on OCC prices in 2022 averaged $132 a ton and in the last quarter OCC has taken a major dive. However, we have not seen a substantial price drop for corrugated products!