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Sun, Sep 26, 2021 17:41
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Clearwater Paper to pull back on production

LEWISTON, Idaho (From news reports) -- Clearwater Paper is expecting to take temporary downtime in the coming weeks at unspecified locations of its tissue operations.

It's too soon to know how Clearwater Paper's Lewiston mill will be affected, said Shannon Myers, Clearwater Paper's spokeswoman.

Demand for toilet paper, one of Clearwater Paper's products, skyrocketed in March 2020 when the COVID-19 pandemic started and precautions to slow the spread of the illness were instituted.

Now Clearwater Paper executives believe that the market has more than a month's supply of excess tissue goods inventory.

Consumers are using what is stockpiled in their pantries before they buy more, so the stores that Clearwater Paper supplies are not ordering as much.

The downtime will serve two purposes, said Clearwater Paper President and CEO Arsen Kitch in a conference call for stock market analysts Wednesday after the company reported it had a net income of $12 million in its first quarter.

"It's to match up with demand in the second quarter, which is weak, but also to start reducing some of our own inventory overhang in our system, and frankly, with record pulp prices, this is the right time to take these curtailments across our system and not make inventory we don't need," he said.

The sluggish demand for tissue is anticipated to be short-lived, Kitch said.

"We expect long-term consumption growth to continue between 1 and 2 percent per year with private brands continuing to gain share," he said. "...We're continuing to monitor channel and customer trends to ensure that we're aligned with areas in the market with the highest growth prospects."

The dynamics are different in the markets for paperboard, Clearwater Paper's other product, which is used for packaging and paper dishes.

Clearwater Paper has increased paperboard prices, Kitch said.

"We continue to observe strength in demand from our folding carton customers and are starting to see a recovery in food service segments," he said. "Demand for food packaging products and retail paper plates has remained healthy throughout the pandemic."

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