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[GreenYes] Building a Greener Cardboard Box - NYTimes-Business interview


December 15, 2007

Saturday Interview


Building a Greener Cardboard Box


By WILLIAM J. HOLSTEIN
<http://query.nytimes.com/search/query?ppds=bylL&v1=WILLIAM%20J.%20HOLSTEIN&;
fdq=19960101&td=sysdate&sort=newest&ac=WILLIAM%20J.%20HOLSTEIN&inline=nyt-pe
r>

AMERICANS are using more cardboard in different ways each year. But tree
replanting and technological advances in making cardboard are easing the
environmental impact, says Patrick J. Moore, chairman and chief executive of
the Smurfit-Stone Container Corporation
<http://www.nytimes.com/mem/MWredirect.html?MW=http://custom.marketwatch.com
/custom/nyt-com/html-companyprofile.asp&symb=SSCC;SSCCP> , the largest maker
of paper-based packaging products, with $7.2 billion in sales in 2006. Mr.
Moore, who is based in St. Louis, says recycling programs are also improving
the environmental impact of all the packaging that Americans consume. Here
are excerpts from a conversation:

Q. How extensively do Americans use cardboard in packaging and how is that
changing?

A. It is certainly the most widely used form of shipping product from point
to point. Corrugated container use is very much aligned with consumer
product consumption. However, the source of containers has changed over the
last number of years partly because of the loss of manufacturing in North
America to lower-cost foreign manufacturing centers, which means that things
have to be shipped farther. Today, 84 percent of corrugated containers are
for nondurables such as food and beverages. Consumers see corrugated
packaging every day in their normal lives.

A second trend in the retail sector has been the growth of "big box" stores,
or mega-retailers. As a result, corrugated packaging plays a much more
important role in the supply chain. It is used for dual purposes, not only
for protecting the product and getting it to its final destination at a
retail store, but it also carries the responsibility for helping to sell the
product.

Q. What is the rate of increase in the American consumption of cardboard?

A. Over the past five years, consumption has been up about 1.5 percent
annually. Aside from what touches the consumer directly, it's also used more
in manufacturing. It's really evolved pretty dramatically.

Q. In view of all the concern about the environment and the global
competition for resources like wood, what kinds of external pressures are
you facing?

A. From the standpoint of economics, it's still a regional demand-and-supply
issue. What that means is that in North America, demand is very well
balanced with supply. We are in the midst of a price increase for our
products.

Of the products we make, about a third of our raw material comes from
recycled fiber and two-thirds comes from virgin fiber. Our industry is
concerned about the sustainability of forests. Statistically, we plant far
more trees than are cut down in North America. We don't see any pressure
long term on the availability of virgin fiber. We are not under pressure on
that front.

Q. What kind of future does cardboard have?

A. It's quite promising. When you look at emerging markets, they are
developing larger consumer markets than we have seen. There is growth in
global population and growth in global wealth. People are consuming much
more differently than previously. Much of that comes in corrugated
packaging. In the United States, the industry is more mature, but we will
see continued growth here, particularly as we look at the nondurable sector.
That's going to continue to grow for us.

Q. What can be done to reduce the environmental impact of all this
cardboard?

A. Smurfit continues to manufacture containers that contain less fiber.
We're doing that by designing corrugated packaging with very similar
strength characteristics but using less wood fiber.

Q. Is cardboard holding its own against other forms of packaging such as
plastic, which has its own environmental challenges?

A. We certainly think that our product offers a distinct advantage relative
to the competing packaging, such as plastic or glass. Everything that we
make today comes from renewable resources. Certainly, we believe corrugated
is a friendlier alternative than some of the other forms of packaging. From
a manufacturing process standpoint, we have the ability to reuse a
significant amount of chemicals, and we also use recycled fiber that comes
from curbside collections across the country. We reprocess that into our
paper and packaging products. United States recovery rates for paper are
good. We recover almost 54 percent of all paper used today in the United
States. For glass, it's 24 percent and for plastics, it's only about 15
percent.

Q. Is it true that we have so much recycled paper that you export some to
China?

A. We sell scrap fiber to China. As a society, we're actually recovering
more fiber today than we have the capacity to consume. So it's natural that
the product gets sold internationally. Most of the demand is in Asia.

Recycling in this way keeps resources out of North American landfills.
You'll continue to see China as a net importer of recycled fiber.

Q. So we're selling them the paper that they use to package up all the goods
that they sell to us?

A. Yes.

Q. All the recycling efforts that individual Americans make are not just a
wasted effort? They are having an impact?

A. Absolutely. The 54 percent recovery rate continues to grow. In 1993, more
than 35 million tons of paper was recovered and 38 million went into
landfills. Last year, more than 50 million tons was recovered and less than
36 million went into landfills. We've seen a dramatic change in the use of
paper. That's been a very effective development.

Q. The subject of cardboard extends out in many different directions,
doesn't it?

A. Yes, it's a lot more interesting than many people think.





Kendall Christiansen

Gaia Strategies

151 Maple Street

Brooklyn, NY 11225

o: 718.941.9535; cell: 917.359.0725







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