[intro music] [orchestral music] >> Narrator: The paper historian, Dard Hunter wrote that, "If man may now be considered as having reached, a high state of civilization, his gradual development, is more directly due to the inventions of paper and printing, than to all other factors."

The paper making craft did in fact, encourage the development of the printing press, for it provided a material which could feed such a press, much readily than either parchment or linen and Johannes Gutenberg's perfection of a movable type press, in the 15th century, would forever change world communications and begin the transition from the middle ages, to modern times.

[orchestral music] But Gutenberg's printed Bible, would also challenge the paper makers.

By the close of the 15th century, almost every country in Europe was printing books and large quantities of paper were being consumed, for the very first time.

Paper making became a significant industry and spread into new areas of the continent.

Paper makers met the challenge of this new market, for their papers, by developing the faster methods, for beating the fibers into pulp and by inventing a paper machine.

[music crescendos] Variations on this Fourdrinier machine, are still used in Wisconsin's Fox River Valley, where paper making evolved into the number one industry, but today this industry faces new challenges.

Modern inventions, threaten some present markets for our paper and the future availability, of the resources needed to make paper is uncertain.

How is the Fox Valley paper industry, responding to today challenges?

And how is it preparing for the challenges of tomorrow?

[guitar music] To manufacture paper or anything else, you need to have a market and since Wisconsin, manufactures the greatest variety, of paper products in the world, future markets would seem to be secure, but it's not that simple.

Personal, sanitary paper products, dominate the Fox Valley's paper industry.

Products like facial tissue, toilet paper, paper diapers, and feminine hygiene products.

Unlike business papers, which depend on the general condition of the economy, these consumer papers have a perpetual market and still individual brands, are subject to the whims of the consumers, looking for a softer or sweeter smelling product.

Consumer trends can change.

A case in point, Kimberly Clark Corporation of Nina, invented the sanitary napkin after World War I and dominates this market and sanitary napkins today, account for 60% of the menstrual care sales but sanitary napkins had been losing sales to tampons, for decades.

>> Historically, there was a trend of growth, for tampons in which they did take sales from napkins, up until approximately two years ago, when the effects of the toxic shock syndrome, began to reduce tampon sales and of course in the process, increased sanitary napkin sales, fairly significantly, to compensate.

>> Narrator: Nevertheless, Kimberly Clark developed its own tampon, in response to the market.

Another trend which could affect all paper makers, who produce sanitary papers, is the growing generic choice, now available in most stores.

Valley mills, have generally been upgrading the paper they produce and these low cost generic papers, would seem be a step backwards.

>> Well generic papers originally took, oh, maybe 12 to 15% of business across the board, in our product lines.

That percentage has declined and, would still be currently around 10%, so that the established brands have lost some business, to generics.

We have brought onto the market some brands, Summit is, is the name of the brand, both a towel and a toilet tissue that responds to, to that segment of the market.

Our pipe machines are very flexible and, we can vary the, the ingredients or the furnish as we call it, that goes into the paper and we can also vary the, the finished product specifications.

So we do have a wide range of quality parameters and cost parameters that we can react to.

[machine sound] >> Narrator: Newsprint, has been one of the fastest growing markets, for paper in recent years.

Though the Fox Valley, began its paper industry making newsprint, none is made today in all of Wisconsin, but MidTec Paper Corporation in Kimberly, does make paper used for advertising inserts, placed inside newspapers.

With rising postal rates these inserts, have increased tremendously.

There's some question about the future, of this delivery system though.

Cable television's chief proponent, Ted Turner, has predicted that the newspaper in its present paper form, won't be here 10 years from now, but will be transmitted electronically.

[upbeat music] What you're seeing is the Leader Tele-A-Cable, an electronic newspaper of sorts, begun by a well established Eau Clair newspaper and appearing on cable TV.

Presently this is only a headline service, which also offers the time, weather and advertisements, but a two-way system is being developed whereby viewers, might be able to call up any information, available from the newspaper.

This is only one example of many, electronic newspapers in development.

>> Even the, even some of the very small local newspapers, over, over the past 10 years have been going to, electronic means for composing their newspapers.

They have in-house computers, reporters type their stories into video display terminals.

So a good deal of the technology for the newspapers, is already there.

>> Narrator: This same to technology, threatens several of our other current paper markets.

Cable's ability to narrow cast to a small audience, rather than broadcast to millions, could change the body of magazines as well.

Today there are thousands of special interest magazines.

Tomorrow there may be just as many special interest, TV programs, coming to us over a cable or on a cassette tape or video disc.

Playboy Magazine, whose paper happens to be made by MidTec and other Wisconsin Mills, is already producing cable TV programs.

>> We see a decline in the large, unit magazines in the future, not a demise of them but a decline of them and a greater proliferation of individual products, individual magazines with smaller circulations.

>> [Computer in robotic voice] Some people say I will be, bringing you newspapers and magazines in the future.

>> Narrator: Personal or home computers, also use a television monitor and they're already offering news and other information.

Currently these computers are somewhat expensive and complex to be embraced by the average consumer and less than 5% of American homes now have them, but new liquid crystal book sized display screens, are being developed and computers might also have the potential, of a replacing paper magazines.

>> I don't see like a computer actually replacing books ever.

You do not comprehend as well, while reading the screen for whatever reasons, perhaps it's, it's the color of the screen.

The resolution is definitely not as good as print would be.

It, it doesn't look like something that would happen.

>> Narrator: Businesses no longer need to be gargantuan, to have computers.

Computers with greater and greater capacities, are becoming available to smaller and smaller businesses.

As these businesses become interconnected by computer, how will the market for business papers react?

The Fox River Paper Company in Appleton, makes spine writing papers, used by businesses to communicate with one another.

For the most part, this century old company, relies on the prestige power of a paper, containing cotton fibers and having an individual watermark, but will computers make such correspondence obsolete?

>> A good portion of the paper that's, the kinds of paper that we make, are consumed by law firms and accounting firms.

People who must have written documents, they can't rely on, on words flashed on a screen, they've got to have permanent record of, what's happened in the event that litigation ensues or where problems arise in a contract and, we really don't see a lot of change in that occurring, over the years.

>> Narrator: In the past, technology has lost paper some markets and created new ones.

Traditionally it's created more than it's destroyed because technology has often uncovered, better uses for paper, but will this tradition hold true?

Whatever technological eras come and go, the packaging era will likely continue.

Through the years, plastics made from petroleum byproducts, have impinged on paper's packaging market.

As a result, that market has been stagnant for some time, bread wrap, egg cartons, milk cartons and garment bags, were all made from paper at one time.

When plastics could be made thinner, many packages shifted to plastic.

The shifts were made because of quality improvements or lower cost.

Soaring costs of petro chemicals could force a shift, away from plastics for some packaging needs.

Historically the Fox Valley paper industry, has a proven track record for adaptability to new markets.

In fact, the paper industry here, was begun by flour millers, searching for a more profitable use for their water power.

[rustling sound] >> Paper has been called the one item most used by man and nowhere is the demand for paper greater than in the US.

Markets may come and go but for many purposes, there simply will never be anything cheaper or more replaceable than paper.

If we accept the fact that paper in one form or another will always be needed, and that the Fox Valley is likely to adapt to those needs, then the most important question becomes, will the Valley be able to compete with paper makers around the world?

All paper mills have suffered from rising costs in energy and wood pulp but US paper makers have suffered the least.

>> You know, of all the products, that are made in the United States, there are very few that we can still say, we are the world's lowest cost producer and the paper industry is one that can say that, with great confidence.

>> Narrator: As Japan plans to phase out, much of its paper production, US exports of paper recently rose, more than 40% in a single year.

So it's unlikely that this country's paper industry, will suffer the Japanese competition faced by the auto and steel industries.

>> They suffer from one really serious drawback.

They have a very limited raw material base.

They have really pretty much depleted, their timberland stock.

[quiet music] >> Unfortunately, Fox Valley mills, export very little paper and while the US may be doing well, in keeping operating costs lower than other nations, the valley itself has some disadvantages to overcome, as it competes with other areas of the US.

Wisconsin's pulp and paper industry, uses more energy than any other state industry and energy costs have risen up to 35% in a single year.

Historically, the paper industry settled in the Fox Valley because of cheap energy, namely the water power of the Fox River.

Today, the water is still needed to make paper, but the river's water power, accounts for an insignificant amount, of the total energy used.

In fact, the Fox Valley is now at a disadvantage, in energy sources, compared to the paper industry of the Southern states.

[machine whirs] The most significant new energy source, for the paper industry turns out to be its own wastes, bark, sawdust, unusable wood fibers and spent pulping liquors.

These waste can be burned in boilers, to produce the steam used to dry paper.

They can supplement expensive coal, oil or natural gas.

Valley mills are turning to these fuels if they have them.

Unfortunately, these wastes are byproducts, of the pulping of logs into usable paper making fibers and most Valley mills purchase their pulp already made, from other companies.

Those mills which do their own pulping have this advantage and are trying to use these so-called hog fuels, to the fullest.

>> We are currently working two major projects.

One is a project to burn all of our combustible trash, that we generate in the Green Bay division and we're also developing a project, which will burn all of the bark, that we generate from debarking the wood, that we use in our pulp mill.

The combination of those two projects, will allow us to achieve 23% of our fuel needs, being met by waste fuels.

In this particular area in Wisconsin, there is a large supply of waste fuels from other industry, such as saw mills and other industries that do produce wood products that, local companies could go out and purchase and use for their own benefit, where a company is not able to use it totally internally.

>> Narrator: While the US paper industry, is generating 50% of its own energy, Wisconsin is lagging behind at just over 20%.

How serious is this imbalance?

>> That may not continue for long there's great interest in, in using all of that wood that comes in, in the product they make, if they do that, they don't have the, the liquors to burn.

There are also other competitors for that, for that same wood supply.

Chemicals from wood is a very real possibility and the, the economics of that situation are getting closer and closer to the point where, there'll be a whole new industry and they're competing for the wood supply, to make chemicals out of it.

So I think that there's, there's an, there's an advantage at, at the present time, but it's probably not, not very long lived.

>> Of the purchased fossil fuels, coal is the cheapest.

Valley mills use coal if their boilers are set up for it and more are expected to convert their operations to coal, in the future but coal has its problems.

It's the dirtiest fossil fuel to burn and produces the highest level of, sulfur dioxide gas emissions.

The Green Bay area, is the first in the Fox Valley, to be classified as a non-attainment area.

This means the area doesn't meet Federal Standards, for sulfur dioxide emission levels.

>> The standard that's being violated in Green Bay, is a health related standard and has, has some adverse impacts on people with, congenital respiratory diseases such as asthma, emphysema, that on, on days where we have high SO2, these people will at the very least have trouble breathing and if you have concentrations of, of SO2, that are significant over a period of time, you will have increased morbidity among this, group of the population.

>> Paper mills aren't the only offenders.

In fact, all the mills combined, contribute about as much sulfur dioxide, as Wisconsin public services polonium plant alone, but emission restrictions and solutions to this problem, will affect these mills.

>> Well, the sulfur dioxide problem in Green Bay, one of the, the main solutions that will be used, in achieving the air quality standards, will be going to the lower sulfur coals.

No two coals are alike and that about the only thing that's, the same about any two piles of coal is that, they're both black and that any company in going to a lower sulfur fuel, would have to take a look at whether or not, their boiler was compatible with that lower sulfur fuel, to begin with.

The second thing is that, lower sulfur fuels will probably be higher in costs, than whatever fuels, the companies are using at the present time.

>> Now in the, in this particular area, we're working in a collaborative fashion, with some other industries, both paper and, and other industries, and are currently working with the DNR, to come up with a satisfactory solution to that problem, that will meet the, the Clean Air Acts and certainly will meet our obligation to the public, to properly handle any discharges that we have into the air.

>> Narrator: Wisconsin mills, have made great strides in conserving energy.

The energy needed to make a ton of paper in Wisconsin, has decreased by more than 13% in the last decade, while production rose almost 23%.

New experiments offer further hope, both the Institute of Paper Chemistry in Appleton and the Forest Products Lab, of the US Forest Service in Madison, are researching the ability of pressure, to remove water from the pulp as a supplement to steam.

With rising energy costs, transportation fees necessarily go up and Valley paper makers import 60%, of their needed soft woods and all of their coal from, outside Wisconsin.

Wood costs are themselves on the upswing.

The south has a climatic advantage, of being able to grow trees faster than Wisconsin, yet Northern Wisconsin sawmills, have provided a good resource for wood chips and the Forest Products Lab, is developing a process which, might allow Wisconsin paper makers, to utilize their surplus of hardwood trees.

[machine hums] Tree cloning may be an answer to a predicted tree shortage, of the 21st century.

If this method of reproducing forests, from the single cells of super trees does become practical, it would benefit both the north and the south.

>> The cloning procedure that we're working on for trees, looks technically very feasible because it, in fact has been worked out for tobacco and carrot, for example and it's a method that we know will work.

It's, we have to work out the, the proper procedures for, for forestries at this point.

>> Narrator: Paper companies are themselves planting and managing tree plantations.

Consolidated Papers, owns more than, 200,000 acres of forest land in Wisconsin.

This company also assists private land owners, in managing their forests.

>> And if we practice the proper forestry, which I call multiple use forestry, we, we can put in these plantations, so that they don't cover the hundreds and thousands of acres in a solid block, but there will be diversity, diversity by age classes, diversities by shape and the intervening areas of openings and hardwood timber and that's what we need for, a pleasing aesthetics and for suitable wildlife habitat.

>> Narrator: Not all Valley mills rely on wood, as their chief raw material, recycled fibers, now supply a quarter of Wisconsin's paper make fiber needs, yet this is far short of the 37% recycled paper, we achieved as a nation, during the wood shortage of World War II, Fort Howard Paper Company of Green Bay, uses roughly 90% recycled fiber and that fact has been credited, with helping the company to become one of the world's, low cost paper makers.

Despite Fort Howard's success, no increased interest has been found to recycle paper, during the last decade.

Collecting and deinking waste paper costs money, and the shortened recycled fibers, simply aren't suitable for all products.

Labor expenses have reflected the rise in inflation and the cost of living.

In the 1960s, you could say that labor expenses, were generally higher here than in the south, but today both Nekoosa Papers and Fort Howard, report that they pay identical wages for similar jobs, in their Wisconsin and Southern mills.

That doesn't always hold true, for salaried employees however because of Wisconsin's high personal income tax, a mill here may have to raise the salary, of upper level employees to recruit them or transfer them from other states.

>> In my viewpoint, Wisconsin, from a purely business point of view, is not a desirable state to do business and now, we like to talk about, the things we're doing for industry and so on, but I think the facts clearly indicate to the contrary, this, the tax climate here is horrible.

We find as we try to grow our business, for instance, that we have to add people from, various parts of the country, to get the best people available.

We find that we are forced to pay, substantial premiums over the marketplace, to make up for the individual tax structure in the state.

>> The moves we've made, to radically reduce the income tax in this state, has been such that they will have less problems with that.

Plus they're getting a new breed of executive.

You know, these people from the sixties, are now moving into the eighties and on that basis, they are getting executives who in many cases, are not just talking about income tax, they wanna know about schools, they wanna know about the quality of life, for their children, the quality of life for themselves and that's all obviously important to people in this state and that becomes a plus.

[tinkling music] >> Narrator: The two largest paper mills in the Valley, have taken some extraordinary and expensive steps, to keep their employees healthy and content.

Kimberly Clark spent an initial, two and a half million dollars, to build this health services center and Fort Howard which incidentally doesn't have a union, has given bonuses of nearly 20%, of its employees annual wages.

>> I think the single biggest reason, for the success of the paper industry, is the people in this part of the state.

I've in the course of my years at Fort Howard, I've had the opportunity to visit mills, throughout this country and in various parts of the world.

and I wouldn't trade the people that we have here, in our company but in this part of the country, for any that I've met anywhere in the world, they're truly outstanding people.

>> Valley paper makers, tend to be more experienced than Southern paper makers because the industry is more than a century old here.

You can find fourth generation paper makers in Valley mills.

Being an old established industry, can have its drawbacks though, many of our machines are narrower and slower than the new paper machines.

>> We're sitting down here, with this machine that's got 143 inch deck, gonna go at 700 feet a minute and all the people that you have to have, to run that machine, all of them, you can't compete, with somebody else that put the machine down there, that runs 1300 feet a minute and ours run seven hundred, it just and that's what you're running into in our, in our field today of making paper and I think today, if you wanna compete with people, you have to have the faster machines and the more new machines we get in, if we, if we get another one, you're gonna lose people, but you're gonna gain production.

>> Narrator: Small machines, force a mill like Fox River Paper, to make small quantities of paper for very specific uses, like the individually watermark, fine writing papers and this restriction limits the markets open to such a mill.

>> Certainly the, the slowness and the, narrowness of our machines, restricts the kinds of things we can do.

We certainly can't compete in commodity grades of paper, that require, you know, high speed, very wide machines supported by wood fiber as a base, there are a number of grades, that can't be made on those big machines, specialty grades of a number of different varieties, that are made on these small machines, that's why they continue to exist.

>> Narrator: As we've seen, Wisconsin doesn't have the ideal climate to make paper, nor does the state have the ideal business climate.

A recent study ranked Wisconsin only 31st most attractive, among the 48 contiguous states for general manufacturing.

So will Wisconsin's paper mills pull up stakes and migrate to the Sunbelt?

Mill officials say the capital investment here, is far too great for that to happen, yet when you read that American Can Company, has sold its paper operations in Green Bay, to the James River Corporation, is it a bad omen?

>> These are good businesses for American Can.

The decision to pull out of the paper business, was a decision to, to fund a strategic redirection of, of the company.

Were, as a company in two capital intensive businesses, cans and paper and we wanted to be in only one, plus some new areas and the paper business is a business that can be sold.

It's a popular business, strong, profitable, and brings the best price, so the paper division was the one to go.

James River is a very young company and by far, the fastest growing company in, in the paper industry.

They've grown from 6 million in sales just 13 years ago, to next year they'll be 2 billion.

So they've got quite a record and they're, also have quite a commitment to the paper industry.

>> Narrator: Indeed there are some very good omens, Wisconsin paper makers, recently committed 250 million dollars, to expand their capacity to make paper and this comes during a sluggish economy.

Leadership of the Valley mills would also seem to be strong.

The Wall Street Transcript, named the two Fox Valley mill presidents, as the top two outstanding chief executive officers, among all the paper products companies in the US.

No one we talked with expressed any doubt, that the paper industry would be able to meet its challenges and to remain king in this, the Valley of Paper.

>> And I would say that the quality of the life, in this state, I would say that the, productivity of the workforce, which is still I think, out racing almost anywhere else in the nation and then the fact that they've got this investment here and are in fact refurbishing it, all of that suggest to me, that the very reasons they came here originally, are the reasons they're gonna stay here.

[upbeat outro music] [tinkling music]