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*- _o Newprint is produced on the above fourdrinier, manufactured by

Beloit Corporation. The Twin-wire configuration shown below is a Bel-Baie III machine also produced by Beloit Corporation.

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The above Kraft cylinder board machine at Georgia Pacif
Oregon mill, manufactured by Black Clawson Co.

ic's Toledo,

Other Industry Products

There are several industry segments outside the paper machinery industry as it is defined in the Standard Industrial Classification. These include producers of paper machinery instrumentation and controls, manufacturers of stock treatment pumps and compressors, and producers of paper machine clothing such as nonwoven felts. Other specialized equipment such as bearings, pumps, boilers, and air and water pollution control equipment, which constitute a major portion of mill construction costs, are also produced outside the SIC-defined industry.

One of the most striking technological developments in the industry has been the rise of mill-wide control systems. These systems, first widely applied in Scandinavia, are designed to control all aspects of machine operation in the mill. First introduced about 1975, mill-wide control systems spread to North America over the ensuing 10 years. Two U.S. firms, Measurex Corp. (Cupertino, California), and ACCURAY, Inc. (Columbus, Ohio), have emerged as leaders in this segment of the industry. With substantial growth predicted in the area, ACCURAY became the focus of a hot takeover battle in early 1987. Combustion-Engineering (C-E) emerged the winner over Hercules in the fight for ACCURAY. Other leading U.S.-based participants in this industry segment include the Allen Bradley Co., Bailey Controls, Foxboro Co., General Electric,

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Honeywell, Inc., and Leeds & Northrup. Top foreign competitors
include Valmet and Ahlstrom Automation (Finland), Rosemount
Instruments (Canada), Scanpro Instruments (Sweden), and Siemens
(West Germany).

Demographics of the Industry

According to 1982 Census of Manufactures data, 230 companies produced paper machinery in the United States in that year. This number represents an increase of 37 companies, or 19 percent over the 193 companies reported in the industry 5 years before. A total of 253 establishments were reported in the industry during 1982, an increase of 40, or 19 percent, over the 1977 total. (An establishment represents an individual plant, regardless of ownership.) These figures represent a reversal of a small downtrend in the number of companies reported in the two previous economic censuses. Half of these establishments (126) employed more than 20 persons each.

The industry exhibits only a modest level of concentration. In 1982, the four largest establishments produced 35 percent of product shipments. The 8 largest accounted for 46 percent of shipments; the 20 biggest establishments shipped 61 percent of 1982 product shipments; and the top 50 establishments accounted for 79 percent of all paper machinery industry product shipments.

The production of U.S. paper machinery followed the development of the U.S. paper industry. The principal manufacturers initially located and have largely remained in or near major papermaking sections of the country. This pattern facilitated delivery of the heavy industrial equipment in a largely local market. As the industry has matured and become global, producers have shown little desire to relocate plants from the small northern towns where the industry originated. Production of pulp and papermaking machinery is a capital intensive industry, and firms have sought to expand and modernize existing facilities rather than abandoning entirely the investment in a site. This has not prevented firms from closing outmoded facilities, especially foundries. The presence of plants in the older urban centers of the Northeast has tended to encourage growth in nearby suburban and rural communities. Few new facilities have been built in the South. Corporate headquarters have remained in existing locations, unlike the paper industry which has recently relocated several headquarters into Fairfield County, Connecticut. Even in locating foreign facilities in Canada and the United Kingdom, firms have preferred to locate in mid-sized industrial towns away from the largest metropolitan areas.

Among U.S. States, Wisconsin has long styled itself "The Paper State," where production of paper machinery has gone hand-in-hand with papermaking. Concentrating in the Fox River Valley and metropolitan Beloit (including nearby parts of Illinois), Wisconsin accounts for 32 (or 12 percent) of all industry establishments and 23 (or 18 percent) of those having 20 or more employees.

Its primacy in the industry is clearly shown as Wisconsin accounts for nearly one-third of the value of product shipments and a similar proportion of value added by manufacture. Wisconsin's share of product shipments and value added are three times that of number two producer Massachusetts. The Wisconsin Paper Council, based in Neenah, is a trade association representing both papermakers and paper machinery builders in Wisconsin.

Massachusetts ranks second with 11 percent in number of establishments. The state's 29 establishments account for approximately 11 percent of all product shipments attributed to SIC 3554. Pennsylvania, with 10 percent of product shipments; New York, with 9 percent; and New Jersey, with 6 percent round out the top five producing States. The Ohio segment of the industry is concentrated in the Miami River Valley. Although accounting for only about 4 percent of product shipments, its producers largely concentrate on pulp-making machinery, and are hence much more significant in that industry sector. 4

The major U.S. producers of paper machinery have long located operations outside the United States and Canada. Table 1 highlights U.S. firms' overseas facilities. Foreign operations are most widespread in the United Kingdom, which has approximately 15 U.S.-based firms (some not shown in Table 1). The United Kingdom was a traditional beachhead for foreign operations and has become more significant since the United Kingdom entered the European Community. As noted in Table 1, there are also continental operations, primarily in West Germany and France. Except for Brazil, where domestic operations have been required to serve its own market and financing has made exporting attractive, there are relatively few U.S.-owned manufacturing facilities outside Europe and North America. U.S. production in Japan has been through licensees such as Beloit-Mitsubishi and Johnson-Nippon Joint, and only Perry Engineering, also a Beloit licensee, is of substantial size in Australia. A more detailed listing of foreign and U.S.-based firms in major markets is given in Appendix A.

From Headbox to Reel: A Guide to U.S.-Based Producers

The United States maintains a leading position as a supplier of pulp and paper machinery to Mills worldwide, a position dating from the 19th century. Domestically based competitors offer a range of machinery to meet the paper industries' needs, ranging from woodyard equipment to paper converting machinery. The industry is

* Geographic data are largely drawn from the 1982 Census of Manufactures, MC-82-I-35D, Special Industry Machinery, Except Metalworking Machinery, Table 2, pp. 35D9-11. But see also County Business Patterns, 1986 and previous years, U. S. Bureau of the Census, Washington, DC 20233.

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listing is not intended to be definitive or complete and does not

include some manufacturing plants operated by licensees.

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