Paper is a necessary component for a wide range of industries, including the publishing, card, stationery, printing, postal, shipping, disposable cup and dishware, packaging, office supply, and school supply industries.
The first facility to create paper in America was a paper “plant” in Germantown, Pennsylvania, established about 1690. Paper had been invented in China during the early centuries of the common era; it had made its way to Europe by 1100. By 1500, rag-based paper had spread widely throughout Europe, just in time for the invention of movable type by Johann Gutenberg. Papermaking was a craft industry at this time, conducted in small shops with a few workers. The major problems were acquiring a sufficient number of rags and breaking them down into their constituent fibers.
During the eighteenth century, papermaking spread throughout colonial America, but it was not until the early nineteenth century that new technology enabled papermaking to become a real industry, with the introduction first of the Hollander, a device for beating rags into fibers, and then of the more sophisticated Fourdrinier machine, which further sped the reduction of rags to their constituent fibers.
The Old Washington Paper Mill in Germantown, Pennsylvania, in 1900.
The modern industry got its start after the U.S. Civil War, when it was discovered that wood fiber derived from softwood trees lent itself to conversion to fiber and that fiber could be converted in turn into pulp–a watery slurry of tree fibers that could be formed into sheets or rolls by laying it out on a flat or curved surface. Various processes were used to produce pulp, either grinding the wood (groundwood) or dissolving the substances holding the fibers together, or exposing them to chemicals.
The last part of the nineteenth century saw the creation of a full-fledged papermaking industry, starting with large installations that turned wood fiber into pulp. These facilities were all located along rivers or lakes, because turning wood into pulp requires large quantities of water. Also needed were large forests of softwoods, especially spruce and fir. At the same time, demand for paper to print books and especially newspapers grew at a very rapid rate, particularly in the United States. As a result, an industry producing newsprint in very large quantities emerged, especially in Canada and the northern tier of the United States, where large forests of softwood grew.
The machines that turned fiber into pulp and pulp into paper were large and very expensive; thus the paper industry was very capital-intensive. New capital investment mostly took the form of upgrading machinery, though operating that machinery required specialized skills that led to a stable, largely unionized workforce. Demand for paper generally tracks the business cycle, so the paper market is cyclical. The high capital costs of the industry, however, compel the machines to be operated at nearly full capacity to remain profitable. Thus, the paper industry is always balanced on a “hinge,” the 90 percent of capacity operation that is essential to keep the invested capital employed.
Paper is a product of the developed world, where demand is located. The United States, because of its large geographic extent, has the largest paper industry in the world, followed by Canada, which delivers most of the paper it produces to the United States. Europe is another area of high demand for paper, a significant portion of which comes from the United States and Canada. It also has its own paper industry, located largely in Scandinavia, which markets its pulp and paper in the European Union. Japan also has a substantial paper industry, and though it has forested land in its north, it imports pulp to make enough paper to supply its needs.
Besides paper for newspapers and for writing and printing, paper developed during the early twentieth century into a major raw material for packaging. Paper for this purpose required greater strength than newsprint or even writing paper, and some companies specialized in packaging paper and in paper used to make cartons and boxes. This part of the market grew with the expansion of markets for consumer products, particularly as self-service stores multiplied.
In the last half of the twentieth century, papermaking became a global industry. It got a major boost when it was discovered, before World War II, that fiber for paper need not come from softwood trees. Hardwood trees, the most prevalent variety in the temperate and tropical zones, could also be used for making paper. These areas had longer growing seasons that made it possible to grow trees specifically for pulpwood in twenty years, or sometimes less. As a result, much of the paper industry in the United States moved south: International Paper Company, an American paper company and the largest in the world, steadily reduced its holdings in the northern United States and Canada, replacing them with lands and facilities in the southern United States.
During the late twentieth century, methods began to be developed for making pulp for paper from other fiber sources, such as sugarcane residues in Brazil. Pulp has long been a commodity that can be acquired anywhere suitable fibrous sources are located, and recycled paper has become a major “raw material.” Papermaking remains water and energy intensive, as well as capital-intensive, continuing to require constant operation to remain profitable. The reduction in printing in favor of electronic communication in the twenty-first century may provide a further challenge to the industry.
Arpan, Jeffrey S., et al. The United States Pulp and Paper Industry: Global Challenges and Strategies. Columbia: University of South Carolina Press, 1986. Comprehensive account of the industry by a group of business school researchers. Hunter, Dard. Papermaking: The History and Technique of an Ancient Craft. New York: Alfred A. Knopf, 1943. Many historical details but most useful for an exhaustive chronology. Roach, Thomas R. Newsprint: Canadian Supply and American Demand. Durham, N.C.: Forest History Society, 1994. Part of a series published by the society; tells the story of the newsprint portion of the papermaking industry. U.S. Department of Energy. Setting the Industry Technology Agenda: The 2001 Forest, Wood and Paper Industry Technology Summit. Atlanta: Tappi, 2002. A technology summit meeting that examined technological aspects of the papermaking industry.
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