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Non-Tech : Ask The Paper Expert -- Ignore unavailable to you. Want to Upgrade?

To: Ron Mgrublian who wrote (4)	2/15/1999 1:37:00 PM
From: Edwarda	Read Replies (1) \| Respond to of 15

Of course the theory is through economies of scale and larger market share manufacturers can better control pricing and become more profitable thus adding shareholder value. I think it is safe to say this will indeed happen. The difficulty for the paper industry is that there is simply too much capacity in a number of key grades to allow for pricing power at anything except the peak of the cycle. The industry needs more than consolidation alone, which is no panacea. IP's acquisition of Union Camp and other similar consolidations it do suggest that with fewer players there is a higher likelihood of market-related downtime. However, I still maintain that the industry needs more combinations on the order of Smurfit Stone, which removed board capacity from the total world system and focused the company on profitable facilities. The comparison of WY vs. IP, which was in the context of answering a question of relative stock performance, was to point out the difference in corporate strategies. IP remains (woefully) focused on being the largest rather than on being the most profitable in the industry.