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Coated Free Sheet Paper From China, Indonesia, and Korea - page 71 / 198

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There have been a number of changes to organizational and production operations of firms since 2003. Capacity changes4 are shown in the following tabulation:

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As shown above, Pasadena Paper Co. (Pasadena), which was an independent company owned by the Canadian-based Belgravia Paper Co., shut down operations in 2005; representatives of the firm did not respond to a request to contact the Commission.5 Pasadena produced both one-sided CFS for use in labels and privately branded two-sided web and sheets. Both the petitioner and respondents attached to their postconference briefs press reports describing what was initially thought to be a temporary shutdown prior to the landfall of Hurricane Rita in September 2005. Petitioner included in its postconference brief a press report from The Citizen (for Pasadena), dated October 10, 2005, that quotes a letter sent to the 315 employees that were terminated. The letter reportedly attributes the closing to “the continued increase in the prices of electricity and natural gas which have been exacerbated by the recent hurricanes, as well as the loss of business to foreign competitors” (quotes refer directly to the employee letter).6 Chinese respondents and Unisource attach additional articles to their postconference brief (exhibit 22) that refer to the high energy costs but make no mention of import competition.7 The plant was not damaged by the hurricane.

With reference to the Luke shutdown, NewPage announced the permanent closure of the no. 7 paper machine at the plant on November 2, 2005. It reported the sales value of the production volume on the machine to be approximately $***. Employment associated with this system is approximately ***. NewPage included in its producer questionnaire ***.8 ***.9 The Sappi closure of a paper machine (and

11 pulp mill) at its Muskegon mill was reported to have impacted approximately *** employees.10 Linn stated that due to “***” it ***.

West

Parties differ in their assessment of the capacity shutdowns, with petitioner attributing the

closures to foreign competition positive move for the industry. 12 13

while Chinese respondents and Unisource label them as an overdue but Korean respondents state that “these capacity closures are in fact

4 Petitioner states that entire paper machines need to be installed to increase capacity and, conversely, shutdown to decrease it. They add that the need to run machines continuously makes it difficult to adjust capacity on an incremental basis. Petitioner’s postconference brief, pp. 9-10. (As will be discussed later in this section, firms did report being able to boost capacity by coating off-line. Coating off-line is, however, less cost effective than coating on a paper machine.) Petitioner further states that “once a machine has been shut down for several months it becomes very expensive to reactivate it. Thus, capacity that is shut down tends to stay shut down.” Ibid.

5

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Commission staff left a voice mail message on November 3, 2006. Petitioner’s postconference brief, exh. 12.

7 Paperloop.com (dated September 30, 2005 and October 10, 2005); and Associated Press (dated October 7, 2005).

8 NewPage’s producer questionnaire response, question II-2. ***. Sappi’s producer questionnaire response, question II-2. West Linn’s producer questionnaire response, question II-2. 9 10 11

12 In support of its position, NewPage cites the “numerous successful” petitions for Trade Adjustment Assistance. Petitioner’s postconference brief, p. 6 and exh. 2.

13 Chinese respondents and Unisource's postconference brief, p. 29. Unisource testified at the conference that the industry consolidations and rationalizations were to take “antiquated production offline in order to increase the operating rates for their more cost-effective equipment and increase their overall profitability.” Conference

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