A Competitive Assessment of the U.S. Paper Machinery Industry

Major U.S. Paper Machinery Plants
Outside United States & Canada. . . . . . . . . . . .
Foreign Paper Machinery Producers
in the United States. . . . . . . . . . . . . . . . . . . . .
U.S. Shipments of Paper Machinery: 1958–86
Employment in Paper Machinery Industry. . . .
Paper Machinery Industry Output per
Production Worker Man-Hour: 1972-86. . . . .
Measures of Productivity Improvement
Compared to all U.S.
Manufacturing: 1978-85. . . . . . . . . . . . . . . . . .
Net Sales and Income of Selected Paper
Machinery Manufacturers: 1980-86. . . . . . . .

New Capital Expenditures: 1967-86. . . . . . . . .
U. S. Trade in Paper Machinery: 1982–87. . . .
Materials Consumed: 1982. . . . . . . . . . . . . . . . . .

Cost of Materials: Historical Trends. . . . . .
Prices of U.S. and Imported Steel: 1978–87
Prices For Carbon Steel, Composite, and
Plate, United States, Japan, and West
Germany: 1980, 1983, 1986. . . . . . . . . . . . . . . . .
Hourly Compensation Costs For Production
Workers In Manufacturing, Selected

Countries: 1980, 1985-1987. . . . . . . . . . . . . . . .
Long Term Government Bond Yields: 1980-86.
Central Bank Discount Rates: 1982–87. . . . . .

Paper Machinery Price Indexes: 1984–87. . . .
Operating Capacity for Paper Machinery:
1981-86. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -
World Market, Market Share of Five
Leading Exporting Nations: 1981-85. . . . . .
World Trade in Paper Machinery: 1981-85. . .
Paper Machinery:
U.S. Imports 1982-1987. . . . . . . . . . . . . . . . . .
Major U.S. Export Markets: 1982–1987. . . . . .
Major U.S. and Foreign Facilities in
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shipments, Exports, and Imports
of Paper Machinery in Canada: 1983–87. . .
Holdings of Valmet Paper Machinery, Inc. . .
Finnish Trade in Paper Machinery: 1982-86.
U.S. Paper Machinery Trade
With Finland: 1981-87. . . . . . . . . . . . . . . - - - -
Swedish Production of Pulp and Paper
Machinery: 1983-85. . . . . . . . . . . . . . . . . . . . . .
Sweden-U. S. Trade in Paper Machinery:
1982-87 . . . . . . . . . . . . . . . . . . . . . . . . - - - - - - - - -
French Paper Machinery Shipments: 1981–85.
France, New Capital Expenditures: 1981-85.

Fig.

Fig.
Fig.
Fig.

(LIST OF TABLES CONTINUED)

Table 32 Italian Imports & Exports of Paper
Machinery: 1981-85. . . . . . . . . . . . . . . . . . . . . .
Table 33 U. K. Paper Machinery: Production, Imports,
Exports, and Consumption: 1981-86. . . . . . .
Table 34 Swiss Paper Machinery Trade: 1981-85. . . . . .
Table 35 Pulp & Paper Mills in Latin America: 1987.
Table 36 U.S. Exports of Paper Machinery
to Mexico and Selected Latin American
Countries: 1982–87. . . . . . . . . . . . . . . . . . . . . .
Table 37 Worldwide Brazilian Paper Machinery Trade:
1981-86. . . . . . . . . . . . . . . . . . . . . . . . • - - - - - - - -
Table 38 U.S.-Brazil Paper Machinery Trade: 1981-87
Table 39 Pulp & Paper Mills in Asia: 1986. . . . . . . . . .
Table 40 Japanese Paper Machinery Industry: 1981-85
Table 41 Japanese Paper Machinery Trade Trends:
1981-85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - -
LIST OF FIGURES
1 - Generalized Flow Chart of the Pulp and
Papermaking Process. . . . . . . . . . . . . . . . . . . . . . . . . . . .
2 - Comparison of Paper Machinery Shipments. . . . . . . . . . .
3 - U. S. Balance of Trade in Paper Machinery. . . . . . . . . .
4 - U.S. Paper Machinery Exports & Exchange Rate

Index of the U.S. Dollar. . . . . . . . . . . . . . . . . . . . . . .

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EXECUTIVE SUMMARY

The U.S. paper machinery industry is a long-established sector facing increasing competition in growing domestic and world markets. Though perhaps not as highly visible as some other sectors, this industry enables the production of paper products essential to the communication, educational, personal, industrial, and national security needs of our nation. The industry embraces the production of machinery for the manufacture of pulp and paper from the woodyard through the pulping process to the manufacture and finishing of paper. Machinery ranges from pulp refiners and fourdrinier machines to dryers, calenders, and winders.

This study evaluates and ranks the major competitive factors affecting the U.S.-based producers in this industry and offers an assessment of the U.S. industry's competitive situation in comparison with producers based outside the United States. Key price-related competitive factors, ranked in order of importance, are the value of the U.S. dollar, export financing, costs of production, tariffs and the terms of trade, and product liability. Nonprice factors include aftersales service, product quality, and nontariff barriers -- none of these factors pose serious problems for the U.S. paper machinery industry. Two fundamental factors which underlay productivity and product quality are investment, and research and development.

The United States imported its first paper machinery in 1827 from Britain. Several leading U.S.-based paper machinery manufacturers began production before the Civil War. The paper machinery industry is mature, characterized by substantial investment in plant and equipment. The great size of this machinery and the large capital investment in plant and equipment has kept manufacturing plants near many of the first sites occupied by the industry and limited domestic expansion outside the small northern towns where the industry first settled.

The U.S. paper machinery industry is modest in size. The industry is composed of approximately 230 establishments, with total employment of 15, 400. Paper machinery product shipments totaled an estimated $1.44 billion in 1987, with exports of $308 million exceeding one-fifth of production. Even with a large North American market, the industry remains dependent on a good export performance to maintain upward growth patterns. Following a sharp drop in 1983, when industry shipments declined from $1.4 billion to $1.15 billion in 1 year, industry shipments rose to an estimated $1.74 billion at the end of 1987. Nevertheless, the United States is the world's leading producer of paper machinery. U.S. domestic production of paper machinery is greater than that of West Germany and Finland, the major European competitors, and about four times greater than that of Canada. However, although the overall value of shipments is

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A Competitive Assessment of the U.S. Paper Machinery Industry, Volume 61