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EKMAN & COCompany Overview and Pulp and Paper
Market Update
For ISM Northeast Wisconsin MeetingNovember 10, 2015
Introduction
• Jeff Sisto – VP Pulp Sales Ekman & Co Inc.
• 22 Years in the Business with 3 companies
• Manage a 4 person staff in Appleton with Sales of Approximately $220M Annually and 375,000 tons of product sold in 2014
• Responsible for Pulp Sales and Supply in US, Canada and Brazil.
Presentation Outline
• Show and Tell - Samples
• The Pulp Making Process
• Ekman and Co Overview
• Market Pulp Demand
• Drivers that Influence Market Pulp and Outlook for the Business
6AM-8AM•Tissue/Toilet Paper•Napkin•Paper Towel•Cereal Box•Coffee Filter/K-Cup/Tea Bag•Starbucks Cup/Pastry Bag
8AM-12PM•Cut Size Paper/Tablet•Sticky Notes•File Folders•Newspaper•Magazine•Flip Charts•Subway – Lunch•Sandwich Wrap/Cup/Napkin•Credit Card Receipt
1PM-6PM•Bills/Checks•Stamps•Envelopes•Calendar Notations•Set Flights•Hotels•Cars•Chipotle - Dinner•Online Shopping
Pulp in Everyday Use
Pulp and Paper Making Process
Market Pulp - Finished Product
Represented in >100 countries
Paper & Packaging
Ekman at a glance
Pulp Recovered Materials
Bioenergy
4.600.000tons/year
Incorporated in 1802
~270 employees 40 locations
Business concept
”To add value to the supply chain for
forest related products worldwide.”
• Financial solutions: Financing Inventories/production, Cash upon receipt of goods, credit risk coverage.
• Customer relationships.• Global real time information on products/markets for customers and suppliers.• Logistics solutions – warehouse JIT inventories, container, vessel, truck and rail
coordination/shipments.• Back office support: Full sales support functions for customers/suppliers.
Accounting, order entry/follow up, IT support and forestry certification documentation.
Our hubs – a truly global concept
Hong Kong
Gothenburg
Miami
Hub Office Sales Office
Ekman Group Top Markets, 2014
China
USA
South
Kor
eaIn
dia
Denm
ark
Taiwan
Turke
y
Belgi
um
Germ
any
Indo
nesia
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Tonnage
2014 Market Pulp Demand WI, N.A. and Global
• Wisconsin: 6.4 M Tons Paper/Board per Year
200K Tons Market Pulp per Year
Consuming 1.3M Tons of Market Pulp per Year
WI = 17% of N.A. Demand for Pulp
• N.A.: 7.5 M Tons of Market Pulp Demand
• World: 52.8 M Tons of Market Pulp Demand +
13.2 M Tons of “Other” Market Pulp
= 66 M Tons of Market Pulp
= 55B US$ Business
2014 Global Pulp Demand by Region
29%
4%
18%14%
29%
6%
ChinaJapanMiddle East, Africa, Eastern EuropeNorth AmericaWest EuropeLatin America
US Printing and Writing Business 2003 – 2015 a steady decline
Not All Gloom and Doom!
• Global Demand is up 2.2% 2004 – 2014 (45 M to 53 M Tons)
Brian McClay & Associates Inc.
Key Market Drivers Influence on the Pulp and Paper Business
• Global economies drive the pulp and paper business
• Shrinking printing paper markets in US and Europe – influenced by internet (Newsprint, Magazines and Direct Mail)
• However, growth in tissue and board globally (including USA) (7 new tissue machines in US market 2015 – 2017)
• Paper industry consolidation will continue (mergers, acquisitions and private equity) Consolidated Papers/Stora Enso, Champion/I.P., I.P./Verso, NewPage/Verso, GP/Buckeye, RockTenn/MeadWestvaco, Wausau Paper/Expera and Wausau Tissue/SCA.
• Plantation Eucalyptus – explosive pulp production growth in Brazil and Chile. (2005 = 10 M
Tons 2015 = 20M Tons)
• Growth in Dissolving Pulp, Fluff Pulp, Cement Board Siding and Powder Cellulose
2016 Outlook for the Pulp and Paper Business
• Continued downward pressure on market pulp prices in 2016, mainly due to strong US$ and continued over supply of market pulp (Eucalyptus and Fluff)
• Risk of pulp mill downtime or even closures if prices/discounts drop much further. (Old Town, ME)
• Further consolidation in the paper business. Sappi, Verso, UPM, I.P. and RockTenn (WestRock) will be active.
• Competition from foreign paper producers will continue, especially in printing and writing papers. (China, Korea, Brazil, Canada and Europe).
• Specialty paper makers with niche products will continue to survive and in some cases thrive. Local WI examples are: Badger Paper, Shawano Specialty, Expera and Neenah Papers.
Other emerging markets have good growth prospects!!!
ONE OF THE WORLD’S LEADING SALES AND MARKETING ORGANIZATIONS FOCUSING ON THE GLOBAL FOREST INDUSTRY