050912 Final Southern Roundtable Forest Industry T

Slide1: 

Southern Roundtable on Sustainable Forests 2005 Conference Forest Industry Trends

Forest Products Industry_Introduction: 

Forest Products Industry_Introduction Trends Forests New owners Paper Consolidation, Brazil, Asia Wood products OK –good – outstanding? Bio materials Something is happening Business decisions Too early to tell

Forest Products Industry_Introduction: 

Forest Products Industry_Introduction Guiding Principles Change is natural Unique strategy = success Double-double

Forest Products Industry_Introduction: 

Forest Products Industry_Introduction Guiding Principles Make low, sell high Customer World economy

Forest Products Industry_Introduction: 

Forest Products Industry_Introduction 20 year average = 3.5 2Q05 U.S. 3.6 China 9.5 Guiding Principles - Economy Source: Economist September 3, 2005

Forest Products Industry_Introduction: 

Forest Products Industry_Introduction Source: CIBC World Markets, July 2005 Guiding Principles - Economy

Forest Products Industry_Introduction: 

Forest Products Industry_Introduction Exchange rates Political stability Industrial production Trade balance Disasters, terrorism Guiding Principles - Economy

Forest Products Industry_Trends: 

Forest Products Industry_Trends Impacts Easier to optimize and evaluate performance Forest land will go for its highest value Financially driven decisions 1. New Owners of Forestland Two important side notes: 1. High cost fiber is not the culprit 2. Quantity may become more important than quality

Forest Products Industry_Trends: 

Forest Products Industry_Trends Predictions Product prices continue to decline Value of timberland will continue to decline Ag uses of forest in developing countries Developing countries will demand capital for processing facilities; world is flat 1. New Owners of Forestland Source: CIBC World Markets, June 2005

Forest Products Industry_Trends: 

Forest Products Industry_Trends 1. New Owners of Forestland The China link China is short on wood Don’t forget recovered paper Imports = 55% Imports = 65% 52% 26% 22%

Forest Products Industry_Trends: 

Forest Products Industry_Trends Quick overview of paper – 75 million tons China growing Brazil growing 2. Paper Consolidating Consumption Source: Jaakko Poyry, July 2005 350 million tons

Forest Products Industry_Trends: 

Forest Products Industry_Trends Quick overview of paper – 75 million tons China growing Brazil growing 2. Paper Consolidating Growth Projections to 2020 Emerging markets 4.0% Mature markets 0.6% Source: Jaakko Poyry, July 2005

Forest Products Industry_Trends: 

Forest Products Industry_Trends Quick overview of paper – 75 million tons China growing Brazil growing 2. Paper Consolidating 0 5 10 15 20 25 30 35 40 Total Number of Machines News UCFS TIS North America Europe Asia South America Bd

Forest Products Industry_Trends: 

Forest Products Industry_Trends 2. Paper Consolidating

Forest Products Industry_Trends: 

Forest Products Industry_Trends 2. Paper Consolidating

Forest Products Industry_Trends: 

Forest Products Industry_Trends Quick overview of paper – 75 million tons China growing Brazil growing U.S. south is long fiber bread basket One paper grade makes sense Innovation and nanotechnology and packaging 2. Paper Consolidating Industry Examples IP MeadWestvaco Cascades Sonoco Paper is not dead in the U.S unless we talk it to death

Forest Products Industry_Trends: 

Forest Products Industry_Trends Quick overview of wood – Katrina’s impact unknown – 200,000 houses Imports from Canada down; other countries up Culture against stick-built houses in China New product opportunities greater than paper 3. Wood products is OK? The China link

Forest Products Industry_Trends: 

Forest Products Industry_Trends China – Biggest emerging competitor of finished wood products 40% self sufficient in roundwood Bulk of plantations are not for industrial users? Most softwood logs from Russia China is largest export market for U.S. hardwood lumber China is largest plywood and MDF producer in world 3. Wood products is OK? The China link

Forest Products Industry_Trends: 

Forest Products Industry_Trends Tree – water hemicellulose 20-35% lignin 20-35 cellulose 40-45% 4. Bio materials is real

Forest Products Industry_Trends: 

Forest Products Industry_Trends 4. Bio materials is real

Forest Products Industry_Trends: 

Forest Products Industry_Trends 4. Bio materials is real The China link China’s oil consumption is 1/15 that of the U.S. Since 2000, China has accounted for 75% of the increase in global oil demand

Forest Products Industry_Trends: 

Forest Products Industry_Trends Examples EVA selling forest lands unique strategies 5. Better Business Decisions

Forest Products Industry_Conclusion: 

Forest Products Industry_Conclusion North Carolina is the place

Forest Products Industry_Conclusion: 

Forest Products Industry_Conclusion North Carolina is the place 118,000 employees 3,100 facilities

Forest Products Industry: 

Forest Products Industry Trends Forests New owners Paper Consolidation, Brazil, Asia Wood products OK –good – outstanding? Bio materials Something is happening Business decisions Too early to tell

Forest Products Industry: 

Forest Products Industry Trends Forests New owners Paper Consolidation, Brazil, Asia Wood products OK –good – outstanding? Bio materials Something is happening Business decisions Too early to tell