Most CEOs running pulp and paper companies believe the ‘worst is over’ and now look for a slow recovery over the next 2+ years. Most admit the industry cycle is mature or even declining and much of the lost demand may not return. The paper, pulp, and packaging industries all need to review their models for long term survival. The last two decades illustrated a trend of mergers, acquisitions, consolidation, and plant and equipment closures. This assisted with the over supply challenge, but if demand continues to be decreasing, a transformation must occur.
The paper companies will need to review other segments and models to be viable as a long term entity. Areas of focus perhaps should include, Chemicals, water treatment, energy, logistics, forest management, and recycling. The paper companies all currently have expertise in these areas as a normal course of business. Now, maybe they should evaluate if these areas could generate new streams of revenue and recreate a ‘new’ entity.
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6 comments:
Very interesting prospective point of view. Conventional wisdom is to review communication alternatives (electronic media), but I think you raise interesting points on departing from paper production and focusing on an area that the mills already have expertise in.
Agree , paper is mature, or declining, in its business cycle. Time to rethink. Thanks
WOW, this is good stuff. Very creative ideas. Yes, I research the industry from time to time agree and the CEOs need to build alternative models to survive long term.
Thanks for providing these interesting pieces. I read your blog weekly and always walk away with something I did not know. Very interesting view points here.
I would think the paper companies would focus on documenting a plan that takes advantage of their expertise on managing our forests. This is a renewable resource and such an initiative would be good for the environment, long term. I would have to think there is profit in this knowledge .... beyond simply converting it into paper. Energy???
Not much creativity nor innovation being done at the paper companies. Same old, same old. I know most mature manufacturing industries (i.e. Steel) are suffering. I recently was reading an article that Asia is working on introducing an electric current to cellulose substrates. Maybe this is the key to 'joining' the new world of electronic media - e-readers,MP3, Ipod, smart phones, etc. Maybe a paper screen? or cheap portable screen - disgarded or recycled when done - like we do with printed newspapers?
Packaging papers continue to be an important sector of the pulp and paper industry. Although, given the current poor economy, not many buyers for goods going into boxes, but, once the economy rights itself - I estimate buyers will be back and items need boxes. The packaging segment has a chance!
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