April 16th, 2009
A front page story on most North American newspapers (and certainly all Canadian ones) is that AbitibiBowater, the world’s biggest newsprint producer (40% marketshare) has filed for bankruptcy protection in the United States and plans to file for similar protection in Montreal on Friday.
According to the report in the (Toronto) Globe & Mail, “U.S. newsprint demand has been falling for more than 20 years. After peaking at 12.3 million tonnes in 1987, sales were just 6.8 million tonnes in 2008.”
A second story in the paper (which of course I read online) is: “Abitibi investors urged to run away.”
Meanwhile, over in the Wall Street Journal, the bad news report focused on Weyerhaeuser Co. which posted a fourth-quarter net loss of $1.21 billion on sales of $1.76 billion.
While Weyerhaeuser gains the bulk of its revenue on wood for building rather than on newsprint, it’s just bad news all around. A second report in the WSJ sates: “Last month Standard & Poor’s cut its long-term ratings on Weyerhaeuser one notch to right above junk status, saying the company will likely continue to post poor results.”