Thursday, February 19, 2009

Newsprint companies face crisis

The publishers of daily newspapers in the US reduced their use of newsprint by a total of 1m tonnes in 2008, a 16.3% reduction on the previous year. But newsprint remains costly, having reached a high point of $758 in December.
It fell to $720 in the second week of this month but industry experts believe it will rise again as north American manufacturers cut back on production. In Europe, where newsprint consumption dropped by 3% last year, capacity is also being reduced.
North America's largest newsprint company, AbitibiBowater, has seen its share price fall dramatically from its $3.33 high two years ago to 24 cents in December. Now at 60 cents, it faces being delisted by the New York stock exchange. The company is now trying to sell off assets to meet upcoming payments on a debt of $6bn.
This iinformation is culled from a lengthy analysis by Philip Stone, who concludes his piece by remarking on "the ultimate irony" that Google is buying a newsprint mill in Finland, not to produce newsprint of course, but to turn it into a data centre.

Source: Greenslade Blog

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