Production efficiency and cost competitiveness of pulp producers in the pacific rim

Using 1994 data from the bleached softwood kraft pulp (BSKP) sector, made u p of 70 mills producing market pulp in 10 countries across the Pacific Rim, this paper finds that the most efficient producers have constant returns t o scale, and that, in general, mills perform well technically but not alloc atively. Mills in interior British Columbia have the highest cost efficienc y and mills in Asia and Oceania have the lowest. However, similar cost effi ciency does not mean similar cost competitiveness. Variations in fiber pric e, energy use and price, and labor use and price are the major determinants of cost positions in BSKP manufacturing. Due to the lowest fiber and labor prices, mills in Latin America enjoy the greatest cost advantage. In contr ast, mills in Ontario, Asia, and Oceania are severely disadvantaged due to their higher fiber price and/or labor cost. Mills in coastal British Columb ia and the U.S. Southeast have modest degrees of cost advantages.