The top ten global paper companies: mergers acquisitions, and divestitures continue to reshape the leading paper companies.1. International Paper Co. www.internationalpaper.com 400 Atlantic Street Stamford, Connecticut Stamford is a city in Fairfield County, Connecticut, United States. According to 2006 Census Bureau estimates, the population of the city is 119,261, making it the fourth largest city in the state. , 06921 +1 203 541 8000 John & Dillon, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. 2001 Pulp/Paper/Converted product sales: US$ 26.4 B Profile: Largest paper company in the world; operates facilities in nearly 50 countries. IP is majority owner of New Zealand-based Carter Holt Harvey Carter Holt Harvey is an Australasian forest products company, with significant interests in wood products, pulp, paper and packaging. The company employs approximately 10,500 people across Australasia. and operates xpedex, a North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. distributor of printing, packaging, graphics arts and industrial supply products. Owns, manages or has an interest in 20.8 million acres of forestland for·est·land n. A section of land covered with forest or set aside for the cultivation of forests. worldwide (half in the U.S.) Products: World's leading producer of printing and writing papers; major producer of fluff, dissolving and paper pulp Paper pulp is a material for making paper. It is usuallly cellulose fibre, and could be wood pulp or non-wood pulp See also
v. cor·ru·gat·ed, cor·ru·gat·ing, cor·ru·gates v.tr. To shape into folds or parallel and alternating ridges and grooves. v.intr. boxes; folding boxboard box·board n. A firm cardboard used for making boxes. ; and kraft paper and packaging. What's New: In January 2002, the Industrial Packaging Group shut down the Oswego, N.Y., containerboard mill, eliminating 100,000 short tons of linerboard lin·er·board n. A type of paperboard used in making corrugated cartons. , medium and kraft papers capacity and 100 jobs. In April 2002, IP completed sale of its OSB OSB abbr. Order of Saint Benedict business to Nexfor Inc.; in May 2002, deal struck to sell its Decorative Products Division to an affiliate of Kohlberg & Company. Strengths: IP is the market leader in many segments of business. This is at tremendous advantage over the competition. Challenges: Much of IP's business is denominated in U.S. dollars--makes exporting difficult and domestic business susceptible to imports. Stock analysts do not assign proper value to paper companies that hold timberlands and IP is a significant timberland holder. This creates a potential condition of perennially undervalued stock An undervalued stock is defined as a stock that is selling at a price significantly below its intrinsic value (finance). For example, if a stock is selling for $50, but can be determined to be worth $100 based on future cash flows, then it is an undervalued stock. . 2. Georgia-Pacific Corp. www.gp.com 133 Peachtree Street Peachtree Street is the main north-south street of Atlanta, Georgia. The city grew up around this one street, and many of its historical and municipal buildings are or were located along it. , N.E. Atlanta, Georgia, 30303 +1 404 652-4000 A.D. "Pete" Correll, Chairman, President and CEO 2001 Pulp/Paper/Converted product sales: US$ 18.5 B Profile: Comprises four operating segments--consumer products, packaging, bleached pulp and paper, building products--and The Timber Company, which owns or leases 4.7 million acres of timberland. Has more than 600 locations in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe, with over 75,000 employees. Products: Tissue, containerboard, packaging, office and printing papers; market and fluff pulp; lumber, gypsum gypsum (jĭp`səm), mineral composed of calcium sulfate (calcium, sulfur, and oxygen) with two molecules of water, CaSO4·2H2O. It is the most common sulfate mineral, occurring in many places in a variety of forms. and wood panels; wood resins, adhesives and specialty chemicals. What's New: In August 2001, G-P G-P Gel'fand - Pinsker (channel code) sold some of its pulp and paper assets to Domtar Inc. for US$ 1.65 B, the largest divestiture in company history. In April 2001, G-P was considering an internal plan to break the company in two: consumer products/packaging; and building products/distribution. Strengths: Acquisition of Fort James has created a significant player in the tissue business and transformed G-P's direction. Challenges: Even more so than IP, G-P's business is denominated in U.S. dollars. G-P may not be as susceptible to imports as others may due to its focus on tissue. G-P is not yet a marketing powerhouse, limiting its ability to fully realize the potential of the consumer tissue business. Asbestos liability hangover in building products is yet to be fully assessed and resolved, although splitting G-P into two companies may isolate the problem. 3. Kimberly-Clark Corp. www.kimberly-clark.com 351 Phelps Drive Phelps Drive is a street in the city of Brampton, Ontario. Next to it is Major William Sharpe Park. It also intersects with multiple streets, Burgby Avenue, Worth Avenue, and Fincham Avenue. Irving, Texas Irving (pronounced 'er-ving') is a city located in the U.S. state of Texas within Dallas County. According to the 2000 U.S. Census, the city population was 191,615; the 2006 estimate was 201,927 according to the North Central Texas Council of Governments, and 196,084 according to , 75038 +1 972 281-1200 Wayne R. Sanders, Chairman and CEO 2001 Pulp/Paper/Converted product sales: US$ 14.52 B Profile: A leading global consumer products manufacturer and marketer; operations in 40 countries; major businesses are personal care, consumer tissue and professional health care. Products: One of the "big three" tissue manufacturers, with significant share in both the consumer and AFH AFH Adaptive Frequency Hopping AFH Away From Home AFH Army Family Housing AFH Air Force Handbook AFH Atlantic Fish Health (Charlottetown, PEI, Canada) AFH Administration, Finance, and Human Resources markets; variety of branded products made from natural and synthetic fibers using advanced technologies in absorbency, fibers and nonwovens. K-C products are available in more than 150 countries. What's new: In 2001, K-C started up three new uncreped through-air-drying (UCTAD UCTAD Uncreped Through-Air Dried Technology (proprietary process, Kimberly-Clark Corporation) ) tissue machines; also implemented its largest-ever IS upgrade in efforts to standardize its global supply chain. The company also reorganized its diverse nonconsumer businesses into a new segment called Business to Business. The January, 2001 acquisition of Italian diaper maker Linostar S.p.A boosted K-C's share of the global diaper market to 29%. Strengths: Kimberly-Clark is a powerhouse marketer of consumer and industrial paper products. Owns some of the best brand names in the business. Challenges: Majority of business denominated in U.S. dollars--makes exporting difficult and domestic business susceptible to imports, but like other sanitary tissue producers, this is not nearly the problem that it can be in other grades. 4. Stora Enso
2001 Pulp/Paper/Converted product sales: US$ 12.2 B Profile: Integrated forest products company producing approximately 15 million metric tons of paper and board annually; employs 43,000 people in more than 40 countries. Main markets are Europe and North America. The Finnish State owns 12.7% of Stora Enso Oyj shares, for 24.1% of the vote. Products: Fine papers account for 23% of sales, and magazine papers for 22%; Stora Enso also produces newsprint, packaging boards and wood products. What's New: Sale of Stora's Molndal Mill to KLIPPAN AB in April 2002, as part of the Fine Paper division's plan to concentrate on large, cost-efficient mills. In March 2002, the company formed its Specialty Papers Business Group, operating under the Packaging Boards Division. The Finnish State's 12.7% share ownership in Stora Enso Oyj reflects an April 2002 sale of shares. Strengths: One of the Scandinavian "terrific triplets." Like others in this group, Stora Enso seems to do little wrong. Home business denominated in relatively weak Euro is a plus. Good position in premium papers markets in the U.S. Did a fine job of absorbing Consolidated Papers. Challenges: The Central Europe Central Europe is the region lying between the variously and vaguely defined areas of Eastern and Western Europe. In addition, Northern, Southern and Southeastern Europe may variously delimit or overlap into Central Europe. business, and units on the fringes of these markets, may be hammered by the apparent unabated expansion currently taking place--especially in eastern Germany. Look for potential problems here in two to three years. Stora Enso is the world's fourth largest producer of newsprint, with 88% of this business in Europe. Newsprint, however, is a declining business. 6. Procter and Gamble www.pg.com One Procter & Gamble Plaza, P.O. Box 599 Cincinnati, Ohio, 45201 +1 513 945-8500 Alan G. Lafley, Chairman, President and CEO 2001 Pulp/Paper/Converted product sales: US$ 11.99 B Profile: Consumer products company established in 1837; markets more than 250 brands in 140 countries. Total global net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of US$ 39.2 B include cleaning, paper, personal care, food, beverage, healthcare products and pharmaceuticals. Products: Tissue and towel, feminine hygiene, diapers; brands include Charmin, Bounty, Always, and Pampers Pampers is a brand of disposable diaper (or nappy) marketed by Procter & Gamble worldwide. Product information Diapers Pampers Diapers come in sizes going all the way up to Size 7. , which each earn more than US$1 billion in sales annually. What's New: In April 2002, P&G donated its proprietary Pulsed Air Drying (PAD) technology to The Institute of Paper Science and Technology (IPST IPST Institute of Paper Science and Technology, Inc. IPST Internet Professional Sales Training ), Atlanta, for further development and commercialization. Strengths: If not the very top, then one of the two or three top consumer marketers in the world. Challenges: P&G used to combine marketing with technological improvements to deliver unbeatable products; technological improvements have slowed in recent years. Also, having divested all pulp manufacturing capability, the company could be vulnerable to pulp shortages in the medium to long term--10 to 15 years out. 6. Oji Paper www.ojipaper.co.jp/english/ Ginza4-7-5, Chuo-Ku, Tokyo, Japan +81-3-3583-1111 Shoichiro Suzuki, President and CEO Pulp/Paper/Converted product sales: US$ 10.11 B (FY ending March 31, 2001) Profile: Oji's 19 mills throughout Japan produce paper, paperboard, specialty papers and consumer goods consumer goods Any tangible commodity purchased by households to satisfy their wants and needs. Consumer goods may be durable or nondurable. Durable goods (e.g., autos, furniture, and appliances) have a significant life span, often defined as three years or more, and . Largest landowner in Japan, most of it forested; more than 12,000 employees. Products: Newsprint; printing and publications paper; office and communications papers; containerboard, boxboard and corrugated containers; consumer tissue, towel and diaper brands; also produces specialty products such as label paper, films and nonwovens. What's New: With a current share of approximately 30% of Japan's paper market, Oji has announced major plans for Asian expansion, focusing on China. Asia Pulp and Paper Co. (APP) is among the companies currently in talks with Oji. To support its Asian expansion plans, Oji is sourcing more raw materials from the Asia-Pacific region and Russia. Strengths: Presence and proximity to China may be biggest strength. Challenges: The relatively strong yen and the dysfunctional Japanese financial system The main elements of Japan's financial system is much the same as those of other major industrialized nations: a commercial banking system, which accepted deposits, extended loans to businesses, and dealt in foreign exchange; specialized government-owned financial institutions, . 7. Smurfit-Stone Corp. www.smurfit-stone.com 150 North Michigan Ave. Chicago, Illinois, 60601 +1 877 772-2932 Patrick J. Moore, President and CEO 2001 Pulp/Paper/Converted product sales: US$ 8.37 B Profile: One of the world's largest paper-based packaging companies; a leading recycler; a leading producer of folding cartons, solid bleached sulfate sulfate, chemical compound containing the sulfate (SO4) radical. Sulfates are salts or esters of sulfuric acid, H2SO4, formed by replacing one or both of the hydrogens with a metal (e.g., sodium) or a radical (e.g., ammonium or ethyl). , paper tube, cores and labels. Operates more than 300 facilities worldwide and employs approximately 38,500. The company is 33% owned by Jefferson Smurfit Group, Dublin, Ireland, which has a large number of other paper-based packaging interests. Products: About 68 percent of Smurfit-Stone's operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. is generated from containerboard and corrugated container sales. Other products include folding cartons and boxboard, kraft paper, specialty packaging, multiwall bags; integrated mill system with significant fiber resources. What's New: Minority owner Jefferson Smurfit Group, Dublin, Ireland, said in May that it is "aware of recent market speculation in connection with a possible offer for the company." It later said that the bidder was Madison Dearborn Partners, a Chicago-based private equity house. Strengths: Brown paper extraordinaire ex·tra·or·di·naire adj. Extraordinary: a jazz singer extraordinaire. [French, from Old French, from Latin extra worldwide. Truly a global company that has been global for a very long time. Challenges: Can minority owner JSG JSG Joint Study Group (India and Pakistan) JSG Jain Social Group survive intact without the extraordinary personality and expertise of Michael W.J. Smurfit, who will retire as CEO of the Jefferson Smurfit Group in October 2002? 8. UPM-Kymmene www.upm-kymmene.com P.O. Box 380, FIN-00101 Helsinki, Finland +358 204 15 111 Juha Niemela, President and CEO 2001 Pulp/Paper/Converted product sales: US$ 8.93 B Profile: World's largest manufacturer of printing papers; production plants in 17 countries; largest private forest owner in Finland. Focused on three business areas: paper industry, converting industry and wood products industry. Products: Magazine papers, fine and specialty papers, newsprint, sawn goods and plywood, chemical pulp and fluff pulp. What's new: In November 2001, UPM-Kymmene acquired G. Haindl'sche Papierfabriken KGaA, purchasing four Haindl paper mills (in Germany and Austria). In a related transaction, UPM-Kymmene sold two other Haindl paper mills, Walsum and Parenco, to Norske Skog AS. The company also plans to invest EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 127 million (US$ 114.7 M) in a new recycled fiber pulp facility at its Shotton Paper Mill in North Wales. Strengths: One of the Scandinavian "terrific triplets." Seems to do little wrong. Home business denominated in relatively weak Euro is a plus. Challenges: A "Euro-centric" company facing many of the same issues as Stora Enso and SCA (Single Connector Attachment) An 80-pin plug and socket used to connect peripherals. With a SCSI drive, it rolls three cables (power, data channel and ID configuration) into one connector for fast installation and removal. . European expansion by competitors may be particularly hard on UPM-Kymmene. 9. 8CA (Svenska Cellulosa Aktiebolaget Svenska Cellulosa Aktiebolaget (SCA) is a Swedish pulp and paper manufacturer and consumer goods company. It has approximately 50,000 employees and a turnover of approximately 100 billion SEK (10 billion euro). ) www.sca.com Box 7827, SE-103 97 Stockholm, Sweden +46 8 788 51 00 Jan Astrom, President and CEO 2001 Pulp/Paper/Product sales: USS USS abbr. 1. United States Senate 2. United States ship USS abbr (= United States Ship) → Namensteil von Schiffen der Kriegsmarine 8.09 B Profile: Global producer of hygiene products, publication papers, packaging and forest products; main market is Western Europe, with strong penetration in North America as well; 40,000 employees in more than 40 countries. Products: Consumer and AFH tissue, towel and hygiene products; diapers; corrugated packaging and containerboard; publication papers; pulp; timber and solid wood products. What's New: In March 2002, SCA received EC approval for its acquisition of Italian tissue producer CartoInvest; the acquisition boosts SCA's European value share of the retailers' brands market (private label) from 24 percent to about 32 percent and of the total consumer tissue market from 20 percent to about 25 percent. Also in March, SCA reached an agreement to acquire French packaging company AR Fegersheim. Strengths: One of the Scandinavian "terrific triplets." Seems to do little wrong. Home business denominated in relatively weak Euro is a plus. Strong player in the hygiene markets in Europe. Challenges: still largely "Euro-centric" although recent acquisitions have moved the United States from 8th to 3rd in country presence. The European markets will probably not give the growth in the future necessary to keep the company in the top ten worldwide. Can they transfer their management culture to other locales? 10. Weyerhaeuser Co. (including Willamette) www.weyerhaeuser.com P.O. Box 9777, Federal Way Washington, 98863 +1 253 924-2345 Steven R. Rogel, Chairman, President and CEO Estimated 2001 Pulp/Paper/Converted product sales: US$ 8.43 B (combination of Weyerhaeuser Co. and Willamette Industries) Profile: Since January 2002 acquisition of Willamette Industries, now owns 7.4 million acres of U.S. forestland and has license arrangements on 32.6 million acres of Canadian forest land; major manufacturer of wood products including lumber, building materials and OSB. Products: World's largest producer of market pulp; also a range of coated and uncoated fine papers, paperboard and containerboard, packaging and newsprint. What's New: Weyerhaeuser's hostile takeover Hostile Takeover A takeover attempt that is strongly resisted by the target firm. Notes: Hostile takeovers are usually bad news, as the employee moral of the target firm can quickly turn to animosity against the acquiring firm. of Willamette was finally completed in March 2002 after Willamette's vigorous defense crumbled. Anticipated annual synergies should total $300 million within three years; the new company will rank in the top three of all its major product lines. The "new" Weyco would have produced annual revenues of US$19 billion in 2001. Strengths: An environmental leader. Weyerhaeuser's huge timber holdings may prove to be the strength they have been in the past. Challenges: Despite a significant Canadian presence, nearly all of Weyerhaeuser's business is denominated in U.S. dollars--makes exporting difficult. Unlike some other U.S. giants, much of Weyerhaeuser's product line is susceptible to low cost imports. Another worry: integration with Willamette may be difficult to implement at the operational/management level. HONORABLE MENTION: MeadWeatvaco Corporation www.meadwestvaco.com One High Ridge Park Stamford, Connecticut, 06905 1 877 270-3806 Jerome F. Tatar Tatar or Tartar Any member of the Turkic-speaking peoples who today live mainly in west-central Russia east to the Ural Mountains, in Kazakhstan, and in western Siberia. They first appeared as nomadic tribes in northeastern Mongolia in the 5th century. , chairman; John A. Luke, president and CEO. Pulp/Paper/Converted product sales: US$ 8 B Profile: Formed by the January 2002 "merger of equals" between Mead Corp. and Westvaco Corp. The combined firm is a leading global producer of packaging, coated and specialty papers, consumer and office products and specialty chemicals; operates in 33 countries, serves customers in approximately 100 nations, employs more than 30,000 worldwide and owns 3.5 million acres of forests. Products: Second largest producer of bleached and unbleached paperboard in North America; folding cartons and corrugated containers; coated and specialty papers; school and office supplies; specialty chemicals, many made from papermaking byproducts. What's New: In April 2002, permanently closed three coated paper machines at the Chillicothe, Ohio, mill and one coated paper machine at the Luke, Maryland, mill. Strengths: Strong, relatively young management team determined to make a powerhouse from what had been two medium sized companies. They have already made most of the tough rationalization decisions. Challenges: Majority of business denominated in U.S. dollars--makes exporting difficult. Like Weyerhaeuser, much of MeadWestvaco's business is susceptible to imports. What will the company do with its challenged Brazilian businesses? Jan Bottiglieri is managing editor of Solutions! Contact her at jbottiglieri@tappi.org. Jim Thompson is chairman and CEO of Talo Analytic International Inc. Contact him at jthompson@taiilina.com. |
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