Paper quality is better than ever. Paper makers have learned to make products that run well and appeal to designers and marketers. Over time, new technologies, as well as economics, have placed fresh demands on papers. And mills have risen to the challenge. Papers now sport environmental certifications, a higher level of recycled fiber and a broad range of hues and textures. The manufacturers of paper have undergone dramatic structural changes to emerge as streamlined producers of products that fit in the post-recession era.

It is unclear whether the reinvention of paper changed the structure of paper companies, or the restructuring of paper companies enabled the production of modern papers. What is clear is that current producers of coated paper have morphed into companies and corporations with new names, redefined brands and, of course, some old but closely held beliefs. The existing coated paper companies have their roots in the late 1800s or early 1900s. They were founded by entrepreneurs. Economics drove incorporation and public ownership and most recently, asset sell-off to private investment groups. The history of the three major U.S. coated paper producers is detailed below.

NewPage, the largest producer of coated papers in the U.S., is typical. Its history parallels that of other paper manufacturers.

Producing paper was a respectable and desirable way for entrepreneurs to make their fortunes in the late 1800s. One such entrepreneur was Scottish papermaker William Luke, who started The West Virginia Paper Company. He bought land, harvested wood and made paper in a Luke, MD plant, still operated by NewPage.

The successful formula practiced by these early papermakers in the U.S. was one of vertical integration. Their companies owned all portions of the manufacturing chain from forestland through distribution of finished product.

Technology, which utilized wood instead of cotton and efficient pulping processes, which produced less expensive paper, materialized over time. New types of paper and boards appeared as the country's population grew. Scientists were added to process and product development staffs as making paper became more complicated.

Demand fueled the paper business, which boomed until the Depression and World Wars. By this time, the virgin forests were harvested and the mills were aging. This was a lean era for papermakers.

Belt tightening and efficiencies gained from technology advances coupled with escalating product demand ushered in an era of expansion for printing-paper manufacturing in the 1950s.

The West Virginia Paper Company grew, added machines, diversified, invested heavily in R&D and took on the look of a large corporation with separate divisions and markets. A name change to Westvaco fit the expanded geographical locations and product line.

The paper manufacturing cycle of expansion, price decline, increased demand and more expansion that earmarked paper production began in earnest for the mills. Debt load increased. New machines were more and more expensive to build, yet bigger and faster were viewed as the key to success.

By the 1970s, the government was increasingly active in the affairs of the paper industry. Antitrust and environmental regulations proliferated. Profits were spent complying with the regulations and drove the paper companies further into diversification. A printing boom in the 1980s helped the bottom line.

New strategies to cope with an economic downturn became evident in the 1990s. Assets changed hands. The most efficient machines continued producing papers, often with the same brand names but operating under different ownership. Lower priced imports appeared, and paper companies moved into red ink.

Back to NewPage: Another major branch of NewPage began with the Mead Corporation. Mead followed a path similar to The West Virginia Paper Company. Colonel Daniel Mead founded its parent in 1846. Mead ultimately diversified into several non-paper business ventures, incorporating in 1935 and adding some Champion Paper Company assets in 1960.

The fine papermaking units of Mead and Westvaco Corporations merged, and in 2005 the assets of the company were sold to Cerebrus Capital Management and named NewPage.

The company was not in its final shape. European giant Stora Enso purchased the Consolidated Paper Company in 2000. Unable to compete profitably in the U.S., the functioning assets were then sold to Cerebrus in 2007. NewPage is now the largest manufacturer of coated paper in the U.S., operating paper machines that were built and optimized by several companies over the years.

Now, consider Verso Paper Company. Its life began in Minnesota as the Watab Pulp and Paper Company, later purchased by the St. Regis Paper Company in 1935. Technology innovations and industry-leading environmental advancements were hallmarks of St. Regis. Champion Paper Company (started at the turn of the century by a printer who recognized that the new halftone printing technology required coated paper) merged with St. Regis, giving the new Champion International Paper Company a prominent position in the publication paper market. IP saw the merits of the group and purchased the papermaking assets in 2000, only to sell them along with other coated paper assets to Apollo Management Group. Verso Paper emerged and issued an IPO in 2008.

One last example is Sappi Fine Paper NA. It began in the U.S. as the SD Warren Paper Company, founded by Samuel Dennis Warren, who made paper from rags. Giant tissue producer Scott Paper Company bought the company and operated it for several years. The dismantling of the assets of Scott Paper Company resulted in the purchase of the SD Warren division by a South African company that also manufactured paper in Europe. Sappi subsequently purchased the fine paper machines owned by Potlatch, which retreated from fine paper to concentrate on lumber and packaging paper products.

Many paper machines have been mothballed over the years to make way for new or upgraded machines that could produce today's products. Smaller machines have moved into specialty or digital papers (see sidebar). Today's strategies are very different than the past, driven by economics and changing markets.

Digital Paper Reinvented

Trish Wales

Paper companies specializing in digital paper offerings are stretching the bounds of what a business paper can be. A number of exhibitors at next month's On Demand printing show in Philadelphia are paper companies; nine of the 88 exhibitors are paper or converted substrate companies. At last month's Dscoop5 (www.dscoop.org ), the HP wide-format and Indigo digital press user group conference, more than two dozen of over 89 exhibitors were paper companies or converters of specialized substrates for digital presses.

Specialized offerings for digital presses include uniquely converted materials for labels and packaging, folding carton materials, magnets and commercial printing papers trimmed as rolls or sheeted to specific size requirements for digital presses.

At Dscoop5, innovative offerings included imported Xtreme Coated Cover, distributed by Millmar Paper, with a proprietary laminated coating that prevents toner cracking whether folded with or against the gain, or even crumbled into a ball.

Among the familiar merchants and mills were Domtar, Finch Paper, Kanzaki, MeadWestvaco, Mohawk Fine Papers, Neenah, NewPage, Newton Falls Fine Paper, Sappi, Wausau and xpedx. Additional specialty purveyors included Convertible Solutions, Ecological Fibers, Flexcon, Global Paper Solutions, GPA, Iggesbund Paperboard, Magnum Magnetics, PolyPrime, TecPapers, Tekra, Transilwrap and Yupo.