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Change Consequence
Challenge
Change#1 Rise of Hardwood as a resource Bleached Hardwood Pulp rose 11.5%
2003-08 Consequence shift to S hemisphere Economies of scale (part 2 of change) Move to enormous single line pulp mills –
1.3 million tonnes a year – Fibria in Brasil next will be 1.5 million tonnes
Challenge
Challenge – limited resources. Increasingly uncompetitive
1.275
2.284
4.425
4.920
4.982
9.871
10.682
16.238
17.340
32.578
45.083
0.0 10.0 20.0 30.0 40.0 50.0
RSA
Iran
Ukraine
Thailand
Brazil
Indonesia
Japan
USA
Russia
India
China
Million Hectares
How do we meet this challenge?
Suzano’s forest yield increase in 40 years
In South Africa
90
100
110
120
130
140
150
160
170
180
190
200
1980 1984 1988 1992 1996 2000 2004 2008
Years
Plantation Production Plantation Area
Total increase in production over period : 69.5%Total increase in afforested area over period : 8.3%
(Forestry South Africa 2009)
And this one?
Go Niche? Go Designer? Bring back batch!!
Other pulp related changes
Rise of mechanical pulping in early 1980s BUT cost of energy skyrocketing, water seen
as an increasingly rare commodity, losing popularity.
Also as HW demand rose, mech pulp shrank 2.9%
Semi chemical dropped 6.2%, unbleached kraft 1.6% and bleached SW pulp down 0.6%
Globally Sulphite pulping all but disappeared except for dissolving pulp producers
On the other side of the coin
Containerboard demand increased by
23.6%
Tissue next biggest increase of 19.3%
Printing and writing grades grew by 9.4%
Newsprint declined by 0.08%
Change #2
Rise of environmentalism and sustainability issues – Carbon footprint, Water footprint, Energy, reduce, re use recycle. Go Green or bust.Comply or face the consequences
Old - writing environmental ‘for the customer’ New - integrated part of business - HSE
Weak regulatory framework and non compliance to beefed up laws and green scorpions.
Basic compliance reporting to comprehensive sustainability reports.
Consequence and challenge
Compliance levels improve Fines will be a reality. Constantly communicate or operations
will close. Eg. On the end product side – go green or
bust. Increased demand for chain of custody
accountability – FSC forest to end customer
Change # 3
Technology within the industry Speed and quality improvement
always the aim. Whether shoe press or new head box technology or automation improvement.
On the automation note……………….
NE
TW
OR
KIN
G
And in between - Enabling Technologies
Windows NT
Windows NT
Windows NT
Windows NT
Windows NT
Windows NT
ODBCADOActiveXWWW
UCP WWWTCP/IP WAPEthernet
Batch S88.01/ IEC 61512-1 IEC 61131-3 WWW
AutoCAD, Objectivity/DBIEC 61131-3 S88.01/IEC 61512-1WWW
IEC 61131-3
IEC 61131-3
Change # 4
Rise of recycling
Change # 5
Rise of China. Demand recovered paper here and in
India influences our price here. Rise of Chinese paper industry was
at a cost of some 30 billion US in subsides
First time EU in April 2010 – countervailing case against China (Sappi one of Companies )
In March 2010 the United States decided to impose preliminary countervailing (ie, anti-subsidy) duties ranging from 3.92% to 12.83% on imports of coated paper originating in China and Indonesia. US coated paper manufacturers argued that the level of the yuan represented a further subsidy, since it is under-valued against the dollar.
Change # 6
Rise in Governmental intervention and the rise of protectionism
What is South Africa’s response? It has to be more than to hopefully bat our
eyelashes at Brazil, Russia, India and China in the hope of being the S in BRIC.
ITAC? (International trade administration commission)
Change # 7
External Technology changes Particularly the WAY we communicate,
educate our children, purchase goods and generally do business – the internet, mobile phones, I books etc etc
Has and will continue to change the types and grades of paper the customers demand.
Some will grow – some will shrink – be flexible - innovate.
Change #8
How we employ people. The way we communicate has changed
this. PA? Refreshments? In this country BBBEE Forest Sector
Transformation Charter. How does Industry Transformation
look?
Transformation as at July 2010
5.0
15.0
15.66
9.75
3.82
4.82
14.97
0 2 4 6 8 10 12 14 16
Score
Ownership
Management Control
Employment Equity
Skills Development
Preferential Procurement
Enterprise Development
Socio-Economic Development
Figure 3.8: Pulp MillsTotal Score = 69.02, Level = 4
ICFPA’s10 biggest world changes
Increasing role of government policy Security of land tenure Competing land use Growing Bio energy Production Climate mitigation policies Forests increasingly protected Go Green
Efficient use of Resources and added value generation crucial
Go Integrated Increasing cost of doing business
Doing more with the same…
Acknowledgements
Mondi and Sappi for photos FSA and ICFPA - slide Metso – slide Voith – slides from Dr Solinger’s
presentation on sustainable paper production in Asia
Risi and Pöyry Peter Calleson – A single Sheet of Paper LHA Management consultants
