Industry Risk Analysis

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IBISWorld Industry Risk Rating Report
March 20 2010

Paper Mills in the US: 32212

DISCLAIMER
This product has been supplied by IBISWorld Inc ('IBISWorld') solely for use by its authorized licenses strictly in accordance with their license agreements with IBISWorld. IBISWorld makes no representation to any person with regard to the completeness or accuracy of the data or information contained herein, and it accepts no responsibility and disclaims all liability (save for liability which cannot be lawfully disclaimed) for loss or damage whatsoever suffered or incurred by any other person resulting from the use of, or reliance upon, the data or information contained herein. Copyright in this publication is owned by IBISWorld Inc. The publication is sold on the basis that the purchaser agrees not to copy the material contained within it for other than the purchasers own purposes. In the event that the purchaser uses or quotes from the material in this publication - in papers, reports, or opinions prepared for any other person - it is agreed that it will be sourced to: IBISWorld Inc. Contents

Risk Overview3
INDUSTRY DEFINITION & ACTIVITIES3
INDUSTRY RISK SCORE3
RISK RATING ANALYSIS3
Structural Risk5
BARRIERS TO ENTRY5
BASIS OF COMPETITION6
DOMESTIC AND INTERNATIONAL MARKETS7
INDUSTRY ASSISTANCE8
LIFE CYCLE9
INDUSTRY VOLATILITY9
Growth Risk11
RECENT GROWTH ANALYSIS11
FORECAST GROWTH ANALYSIS11
Sensitivity Risk12
EXCHANGE RATES - TRADE WEIGHTED INDEX12
LEGISLATIVE COMPLIANCE REQUIREMENTS - PAPER MILLS15
DOMESTIC PRICE - WRITING & PRINTING PAPER15
BUSINESS SENTIMENT - CORPORATE PROFITS18
Industry Risk and Industry Risk Scoring Methodology22
WHAT IS INDUSTRY RISK?22
THE INDUSTRY RISK SCORING METHODOLOGY22
RISK RATING SCORE DEFINITION22

Risk Overview

INDUSTRY DEFINITION & ACTIVITIES

Operators in this industry run paper mills where they manufacture paper from pulp and recycled materials. Industry product include paper rolls and reams (including newspaper) which are sold to downstream manufacturers of paper products, such as coated/treated paper, stationery, paper bags, newspaper/magazine publishers, printing services, and others. Mill operators may manufacture their own pulp or purchase it from pulp mills.

The primary activities of this industry are:
• Manufacturing of paper rolls from pulp, including printing and writing paper, packaging paper and industrial paper. • Clay coating of manufactured paper.
• Manufacturing of absorbent sanitary/tissue paper.
• Manufacturing of newsprint.

INDUSTRY RISK SCORE

Forecast Period: December 31, 2010

Three types of risk are recognized in our analysis. These are: risk arising from within the industry itself (structural risk), risks arising from the expected future performance of the industry (growth risk) and risk arising from forces external to the industry (external sensitivity risk). These three types of risk are evaluated and each scored separately. These scores are then amalgamated to form a composite score which represents the overall risk affecting the industry.

|Risk |Score |
|Structural Risk |5.59 |
|Growth Risk |6.27 |
|External Sensitivity Risk |6.24 |
|Overall Industry Risk Score |6.08 |

RISK RATING ANALYSIS

Risk Score Trend Analysis
Overall risk in the Paper Mills industry is expected to be at a HIGH level over the 2010 outlook period. This is a similar level of risk as in 2009, although risk has been rising steadily since the MEDIUM level recorded in 2005. The main factors contributing to the overall risk score include IBISWorld's forecast industry revenue risk score and the downstream demand from converted paper product manufacturing.

Risk Score Context
IBISWorld data shows that the Industry Gross...
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