GOLBE (France) (AFP) – Stretched between enormous cylinders, kilometers of newspapers seem to roll endlessly at the Norske Skog factory located in Golbey, Vosges. However, the last site in France that manufactures newsprint is preparing to give up part of its production to move toward cardboard.
In the barns, work is already going on around the machines, two monsters of iron and sheet metal pressing and drying the pulp of paper, releasing giant rollers of paper nine meters wide.
Temporary offices have also been set up overseas to accommodate service providers who will be responsible for converting the two older machines, producing corrugated cardboard for packaging from the end of 2023.
For now, it is time to prepare the pipes and buildings: the workers are asked to stop the machine as late as possible, so as not to punish the activity of the plant so much.
The manufacturer has announced that its annual production capacity of 558,000 tons of newsprint will be reduced to just 330,000 tons, but it will be able to manufacture an additional 555,000 tons of recycled paperboard.
The Norwegian group Norske Skog has invested 250 million euros for this project, also backed by the government’s recovery plan: it relies on the cardboard market, which is booming thanks to the success of online commerce, to boost its profitability.
On the contrary, the consumption of newsprint has decreased significantly in recent years, and the paper press has gradually lost its position in the face of information in the digital format.
The Golbey factory is also the last to produce it in France, while other paper makers have gradually abandoned newsprint in favor of cardboard.
Sheets at the price of gold
However, the strategy of the “Last of the Mohicans” today allows him to take advantage of the extraordinary rise in prices. Because in one year, the price of a ton of newsprint has doubled: it sold in May for between 780 and 950 euros, compared to 400 to 440 euros in the same period last year, according to pricing agency Fastmarkets.
The sudden rise in prices is primarily related to the imbalance between supply and demand, since the production of newsprint fell rapidly in relation to the needs of the press, having been in spare capacity for a long time.
“The market is artificially tense,” the factory’s president, Yves Bailey, sums up to AFP.
Higher prices are also associated with rising costs: since the end of the restrictions, a rapid economic recovery has created supply and transportation difficulties, and pushed up the price of recycled wood and paper.
To turn the huge heating rollers that dry the paper pulp, you need a lot of energy, and the price of it is rising significantly, especially since the beginning of the war in Ukraine.
“When a company like ours consumes 1 million megawatt hours annually, every 1 euro change in price per megawatt hour gives us a 1 million euro variance in our income statement,” explains Mr. Bailey.
“In some months, we’ve gone through an increase of more than €100 (for a ton of paper, editor’s note) simply linked to energy,” he adds.
A situation of concern for journalist publishers: The Alliance for Public Information Journalism (Apig) has asked the state for financial assistance as part of its resilience plan, after several newspapers including Le Figaro, Liberation or Le Monde were forced to increase their prices on newsstands.
However, Mr. Bailey does not intend to increase his factory rate and produce more, because the extra tons of paper would cost too much. “You can’t sell at a loss to please customers,” he says.
In the next few years, if the switch to cardboard works well, it is even believed that a complete abandonment of newsprint will be “possible”. “The Remaining Machine is a good customer for a future conversion, but I don’t know if I’ll still be around to do it.”
© 2022 AFP