Bad news - paper industry

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Exports, June 2008

BC Stats

Bad News for Newsprint Exports
British Columbia exports of newsprint have been trending downward for several years, but they hit a low point in 2007 with volumes dropping 23.0% compared to 2006. Since peaking in 1993, the quantity of newsprint shipped abroad has plunged 66.4%.
Exports of newsprint from British Columbia have fallen dramatically over the last 15years
2500 Thousands metric tonnes % Share 25

BC ranked third in the country in terms of exports of newsprint in 2007
NB 3.5% Que 46.8% NL 8.9%

NS 6.4%

Other 5.4%

2000 BC’s % share of Canadian total 1500

20

BC 11.1% Ont 17.9%
Source: Statistics Canada

15

1000

10

500

5

0 1990 1992 1994 1996 1998 2000 2002 2004 2006
Source: Statistics Canada

0

Newsprintis used mainly to produce newspapers, of which daily newspapers comprise the bulk of the market, with advertising flyers and non-daily newspapers making up a much smaller portion of the demand for the product. It is the lowest grade of paper manufactured from wood pulp and, consequently, brings the lowest price of any paper product. The reasons for the slump in exports of the product from Canadainclude falling demand and foreign competition. The primary market for Canadian newsprint is the United States. In 2007, 56% of newsprint exported from British Columbia was destined for the US. Circulation of newspapers in North America has been on the decline since the 1980s as competition for news delivery has widened, first with the proliferation of all-news cable television networks, then withthe advent of the

The story is much the same across the rest of the country. Overall Canadian exports of newsprint fell 33.3% from 1993 to 2007. The larger decline for British Columbia resulted in a reduced share of total Canadian newsprint exports, from around 20% in the early 1990s, to only 11% in 2007. BC still ranks third among the provinces, behind only Quebec (47%) and Ontario (18%).Page 3 of 7

Exports, June 2008

BC Stats

Internet. The Internet in particular has had a dampening effect on demand for newspapers. Not only are many of the top daily North American newspapers available on-line, but most can be viewed for free and the information can be updated far more quickly than in the print version. Recently, some of the largest dailies in the United States havedecided to make their Internet-version free, including the New York Times, as they realized that they could make more money from advertising on their website if they opened up their readership to a wider audience. It remains to be seen if this will cause further deterioration to the demand for newsprint, but given that advertising dollars are finite and advertisers will likely put their money where itwill get the biggest bang for the buck, if on-line news sites continue to increase their readership, it seems inevitable that advertising revenue for print newspapers will likely decline. If this happens, there could be a reduction in the number of newspapers, which would further reduce the demand for newsprint. Somewhat surprisingly, falling circulation is not a worldwide trend. In fact, outsideof North America and parts of Europe, there have actually been significant increases in newspaper readership. According to the World Association of Newspapers, worldwide newspaper sales climbed 2.6% in 2007 and that excludes free dailies, which boosts the increase in circulation to 3.7% last year and a whopping 14.3% over the last five years.1 The top three newspaper markets are all in Asia: China(107 million copies per day), India (99 million) and Japan (68 mil-

lion). The United States is next, at almost 51 million copies daily, followed by Germany with just under 21 million. Circulation in Asia jumped 4.7% in 2007, in contrast to the 2.1% decline in North America and the 1.2% drop in Europe. The rise of readership in India is reflected in the jump in newsprint exports from BC to...
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