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Coated Free Sheet Paper From China, Indonesia, and Korea - page 169 / 198





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substantial volume also flows through distribution. AF&PA data for 2005 would show 58% of coated groundwood sold direct versus only 30% of coated free sheet sold direct.”



Customer and Producer Perceptions


“Coated groundwood is more yellow, rougher surface, lighter weight, and weaker. Coated free sheet is stronger, archival quality, and has a smoother surface.”


“The marketplace views coated free sheet to be a higher quality product than coated groundwood and more suitable for more prestigious applications. Customers view coated free sheet as the preferred substrate for applications such as annual reports, corporate collateral, high end catalogs and magazines, and high impact direct mail. Coated groundwood carries a lower price point and is generally found in larger volume less prestigious applications where appearance and reproduction quality are of lesser importance than coated free sheet applications. Lower end, large volume catalogs and magazines, newspaper inserts, and lower impact direct mail would be examples of end use applications for coated groundwood. As such customers and producer perceptions would view coated groundwood products as of lower quality than coated free sheet.

The differences in production process required to manufacture the two products also results in difference in physical attributes of the product that reinforces the above perceptions. (As noted above, coated groundwood products tend to be of lighter basis weight and possessing of a rougher printing surface when compared to coated free sheet, which results in poorer dot definition and ink holdout yielding an inferior printed image and overall net impact.)”


“Customer and producer perceptions are similar to those discussed in a).


“Free sheet coated is perceived as better quality than groundwood coated.”



“Coated groundwood is generally priced below coated free sheet products in the marketplace. As an example, in August 2006, RISI reports that prices for coated free sheet products ranged from $950/ton to over $1,500/ton, with prices for coated groundwood products ranging from $825 to $940/ton. There


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