SJL client, The Wisconsin Paper Council, Shows Leadership During This Crisis

Demand for toilet paper is rising, and Wisconsin's $13 billion paper industry could thrive

Rick Barrett, Milwaukee Journal Sentinel
Published 12:12 p.m. CT March 18, 2020 | Updated 9:14 p.m. CT March 22, 2020

As images of toilet paper shortages raced through social media in coronavirus panic buying, Wisconsin paper makers hustled to shore up the supply chain.

America’s Dairyland is the nation’s No. 1 paper manufacturer, cranking out $13.8 billion in products annually and employing 30,000 people. The city of Green Bay has been dubbed by some as the 'toilet paper capitol of the world.'

The industry went into overdrive when shoppers snapped up every roll of toilet paper they could find in recent weeks, fearing they would run out if they were quarantined at home.

Georgia Pacific Corp., in Green Bay, saw its orders for household toilet paper and paper towels double, while demand for the ubiquitous products at airports, hotels and other public venues softened. 

The company’s mills and distribution centers hit 120% of their normal capacity, but “you can just load and ship so fast,” it said about refilling empty store shelves with toilet paper.

The plants normally run 24 hours a day, seven days a week, so the company couldn’t just flip a switch and double production.

“Whatever we have is getting out in the marketplace,” said Georgia Pacific spokesman Michael Kawleski.

“Inventory levels across our system remain healthy, and we are working hard to maximize the number of deliveries we can load and ship,” the company now says on its website.

In fact, Wisconsin’s stalwart paper industry is well positioned to thrive during coronavirus even as other industries, such as business travel and tourism, teeter on the edge of a meltdown.

That’s encouraging for the industry that’s seen the closure of plants in the Fox Valley and northern Wisconsin over the last two decades.

“Paper took some hits, but it’s learned to be much lighter on its feet and is positioned to remain so in this current crisis,” said Tom Still, president of the Wisconsin Technology Council, in Madison.

Statewide, there are 35 pulp, paper and paperboard mills with a total annual payroll of nearly $2.5 billion, according to industry figures. The industry pays about $214 million in state and local taxes.

Georgia Pacific’s operations in Green Bay employ 2,300 including 1,725 mill workers manufacturing toilet paper, napkins and towels. Another 600 or so employees are in engineering, data processing and customer services for the Atlanta-based company.

Procter and Gamble and Kimberly-Clark Corp. also have a large paper-making presence in Wisconsin.

“What the paper industry brings to our economy is significant. These are good-paying jobs and increasingly technical places to work. It’s not your father’s paper mill anymore,” Still said.

Georgia Pacific has five facilities in Green Bay. Its Broadway Mill is one of the largest tissue recycling operations in the world. Its Day Street plant, which opened in 1901 as Northern Paper Mill, is the birthplace of Quilted Northern bathroom tissue.

One of the paper machines at the Broadway Mill makes enough paper in a single day that, when converted into two-ply tissue rolls, it would wrap around the entire world, according to the company.

That machine starts with a solution of 99.5% water and 0.5% fiber and turns it into a finished sheet of tissue in 1.5 seconds.

The company’s Green Bay operations now manufacture twice the volume in products compared with 20 years ago, with half of the number of people, said James Golembeski, executive director of the Bay Area Workforce Development Board in Green Bay.

“The paper industry isn’t so labor intensive now. But these companies pay very well, have great benefits, and are very stable. It’s been a long time since we dealt with layoffs at Georgia Pacific,” he said.

Wisconsin’s paper plants manufacture tissue paper, cardboard and scores of other products such as food packaging, lottery tickets, microwave popcorn bags and liners for aviation electronics.

“These are things we need even in a downturn,” Golembeski said.

In fact, the packaging industry could weather a coronavirus downturn better than some other industries, according to Moody’s Investor Service.

‘We expect some sectors like construction, food and beverage, packaging, telecommunications and waste management to be broadly resilient … Airlines, cruise lines and hotel operators will be hit by a slowdown in travel and tourism. Reduced consumer discretionary spending will hit consumer nondurables, gaming and restaurants,” Moody’s says.

Wall Street seems to agree. Shares of Kimberly-Clark, the maker of Kleenex tissue, Cottonelle and Scott toilet paper, recently hit a 52-week high of more than $149.

“While markets remain in turmoil, investors should seek out names that have an advantage in the current environment. Kimberly-Clark will see solid results for at least the current quarter as consumers are stockpiling paper products and cleaning supplies,” said analyst Billy Duberstein with The Motley Fool, an investment advice service.

“The recent COVID-19 outbreak has reminded us all of the appeal of consumer staples stocks … household products that people use in both good economic times and bad,” he added.

While consumption of plain white paper has been on the decline, specialty paper is booming, said Scott Suder, executive director of the Wisconsin Paper Council, an industry trade group.

“There are not as many mills now, but the industry has diversified,” Suder said. “We have literally hundreds of specialty paper products made in Wisconsin now.”

The spread of coronavirus will fuel increased demand for paper health care goods, although manufacturers face a conundrum when it comes to panic-buying of consumables like toilet paper.

Even if they rushed to open another factory, or expand an existing one, it could flood the market with products and leave them stuck with inventory when the hoarding stops.

“Our manufacturing operations which produce toilet paper are currently operating normally, and we are doing our best to meet consumer demand,” Georgia Pacific says on its website.

“Demand continues to outpace supply, but we are working diligently to get product to our retailers as fast as humanly possible,” Procter and Gamble spokeswoman Loren Fanroy said about the Charmin brand.

America has seen panic buying of toilet paper before. On Dec. 19, 1973, for instance, television show host Johnny Carson sparked a near month-long shortage when he said on TV, “You know what’s disappearing from the supermarket shelves? Toilet paper … There’s an acute shortage of toilet paper in the United States.”

Americans hoarded every roll they could find, creating a real shortage when, in fact, there hadn’t been one. It was a full three weeks before the situation returned to normal.

“This situation is highly dynamic and changing daily,” the American Forest & Paper Association says.

But, “Rest assured, tissue products continue to be produced and shipped 52 weeks a year,” says the Washington, D.C. based trade group.