SIC 2611
PULP MILLS

This category covers establishments primarily engaged in manufacturing pulp from wood or from other materials, such as rags, linters, wastepaper, and straw. Establishments engaged in integrating logging and pulp mill operations are classified according to the primary products shipped. Establishments engaged in integrated operations of producing pulp and manufacturing paper, paperboard, or products thereof are classified in SIC 2621: Paper Mills if primarily shipping paper or paper products; in SIC 2631: Paperboard Mills if primarily shipping paperboard or paperboard products; and in SIC 2611: Pulp Mills if primarily shipping pulp. Establishments primarily engaged in cutting pulpwood are classified in SIC 2411: Logging.

NAICS Code(s)

322110 (Pulp Mills)

322121 (Paper (except Newsprint) Mills)

322130 (Paperboard Mills)

Industry Snapshot

Followed by Canada, the U.S. pulp industry is by far the world's largest, representing roughly one-third of worldwide production in recent years. U.S. pulp mills produce a wide variety of pulps for making paper and paperboard. In 2000, shipment values for U.S. pulp mills totaled about $3.7 billion, representing about 4.7 percent of total shipment values for pulp, paper, and paperboard mills. Capital expenditures for equipment and plants totaled approximately $236.8 million that year, up from $186.2 million in 1999. Most of the pulp made in the United States is chemical pulp, which is produced by a chemical digesting process that converts wood chips into pulp by chemically liberating the cellulose fibers from the lignin that holds them together in the wood. Mechanical pulps are made with large "grinders" that physically shred the wood pulp into individual fibers. Some processes combine elements of mechanical and chemical pulping.

After the wood chips are digested or ground, they are called wood pulp. This wood pulp is cleaned, screened, and refined. Pulp to be used for white paper is bleached (otherwise the pulp retains its natural brown color). At this point, the pulp is ready to be used in papermaking. Various grades of pulp can be made from softwood trees such as southern pine, hardwood trees such as oak, or from other sources that include recovered paper, rags, or agricultural products such as cotton linters, kenaf, bagasse, or straw.

In the early 2000s most pulp was used in integrated pulp and paper mills, which means that the pulp mill and the paper mill were owned by the same company and operated in many cases at the same location. There were numerous smaller paper mills, however, that were not connected with a pulp mill; they purchased "market pulp" on the open market from other pulp producers. Some companies produced only market pulp; other companies sold the excess pulp that could not be used by their paper machines.

Organization and Structure

U.S. pulp mills maintain a dominant share of the U.S. market for pulp and are also very strong competitors in global markets. One reason for this market strength is good economic fundamentals—U.S. pulp mills have access to low cost and abundant raw materials, a highly trained workforce, and they operate world-class plants and equipment.

In most cases, pulp mills need to be located near their raw materials—trees or wastepaper—to minimize transportation costs. The United States has a very large growing stock of pulpwood in several areas: the Pacific Northwest, the upper Midwest, the Northeast, and the Southeast. This circumstance, combined with its efficient manufacturing base, makes the United States the leading low-cost producer of many grades of pulp throughout the world. However, by the late 1990s, that position as low-cost producer was being challenged by a new generation of pulp mills, largely in South America and Southeast Asia. These mills have access to fast-growing hardwood and softwood fiber, which dramatically reduces operating costs. Many new, world-class pulp mills were built in South America and Southeast Asia in the 1990s, while none was built in the United States and Canada. This new capacity made the global pulp market very competitive and, consequently, increased the volatility of pulp prices.

While the pulping and papermaking processes are very energy intensive, the industry has become an efficient user of energy by burning its own waste byproducts, such as tree bark and spent chemicals from the pulping process. In the late 1990s the pulp and paper industry generated well over half of the energy needed to run its mills. From the early 1970s to the mid-1990s, the industry reduced oil consumption by nearly 66 percent and natural gas consumption by 10 percent while increasing production capacity by 60 percent. Some mills even generate excess power and sell it back to local utilities.

Pulp mills and paper mills use a large amount of water from lakes, rivers and, in some cases, oceans. They must reuse and/or clean all of this water before it can be returned to the body of water from which it came. In the early years of the industry, pulp mills would discharge untreated waste (effluent) into the receiving body of water. Beginning in the late 1960s, however, the industry began operating under strict water use regulations that required primary, secondary and, in some cases, tertiary treatment of wastewater. These rules were tightened considerably during the following decades. Also, to cut down on treatment costs, mills reuse a large portion of the water they used elsewhere in the pulping and papermaking process. The process of cleaning and reusing water is commonly called "closing the mill."

In the mid-1990s, it took 65 percent less water to make a ton of paper than it did about two decades earlier....

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