Appleton officials urge protection from foreign papermakers: Company wants duties imposed on Chinese, German exporters

WASHINGTON, Oct 03, 2008 (Milwaukee Journal Sentinel - McClatchy-Tribune Information Services via COMTEX) -- NWP | Quote | Chart | News | PowerRating -- The lightweight paper often used in receipts at gas stations, restaurants and automatic teller machines nationwide is increasingly coming from China and Germany because of unfair trade practices that make it tougher for papermaker Appleton to compete, company officials told international trade commissioners at a hearing Thursday.

"We ask that you restore fair trade to the marketplace," Appleton Chief Executive Officer Mark Richards said.

The hearing before the U.S. International Trade Commission came one week after the Commerce Department recommended that duties be imposed on Chinese and German producers and exporters for selling lightweight thermal paper at unfairly low prices in the United States.

Appleton, an employee-owned company known for its carbonless paper, is asking trade commissioners to agree that Chinese and German papermakers caused enough harm to the U.S. industry to impose duties. The company employs 1,350 people at its Appleton mill and headquarters.

Appleton's foreign competitors denied that they lured customers away by undercutting domestic producers or, on the part of the Chinese, through government subsidies that keep prices artificially low.

Chinese papermakers have not done enough business in the United States to make much of a difference to American papermakers, said Xue Qiang, general manager of the Chinese company Hanhong.

Willy Frueh, an official with German papermaker Koehler, said his company was merely taking advantage of more efficient ways to make its paper and offer a better-quality product that clients prefer.

"Their claim doesn't make any sense to me," he said.

Decision likely this month

The commission is expected to make a decision on the case this month. It could impose duties of nearly 7% for German companies and 33% to 252% for Chinese companies.

The decision could affect hundreds of people in Appleton who rely on the paper mill for good-paying jobs, said U.S. Rep. Steve Kagen, an Appleton Democrat.

"What we're asking you to do is look past the numbers and take a look at the real people who will be affected by the numbers," he said.

Kagen reminded commissioners of their decision in November to not impose duties against papermakers from China, Indonesia and Korea in a case that NewPage Corp. initiated over coated printing paper. The company recently closed its Kimberly mill, leaving hundreds of Wisconsin residents without jobs. The company shut its Niagara mill in July.

"What are they going to do?" Kagen said. "They can't chase their jobs to China."

U.S. Sen. Herb Kohl (D-Wis.) also cited NewPage during his testimony, saying that company officials told him they closed their Wisconsin operations because of "cheap Chinese paper being dumped onto the U.S. market."

He said, "Wisconsin cannot afford to lose another paper company."

Wisconsin Gov. Jim Doyle, who flew to Washington to testify in support of Appleton, urged commissioners to "recognize our domestic paper industry is at peril." Wisconsin is the largest papermaking state in the country.

"We're not seeking to protect some old, outdated operation," Doyle said. "This is a company that has done all the right things."

A few dozen Appleton employees from Wisconsin, Ohio and Pennsylvania traveled to Washington to attend the hearing.

$12 million in losses

The domestic thermal paper industry, which consists largely of Appleton and Massachusetts-based Kanzaki Specialty Paper, had almost $12 million in operating losses last year, according to an analysis by the law firm representing Appleton.

Rick Bahr, a forklift operator at the company's Appleton shipping facility, has worked for the company 31 years and doesn't know what he would do if he lost his job.

At 50, he won't be able to retire for another dozen years but doubts he could get another job at a comparable hourly wage. The average worker at the mill is paid about $20 an hour.

"If I lost my job, I would be devastated," said Bahr, president of the local union.

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