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Strategic & Financial Arguments(TM)
for the pulp and paper industry worldwide

April 2020

Participating as industry experts in pulp and paper financing and M & A deals around the world  for nearly three decades, we continue to see the same mistakes made over and over.  This newsletter is designed to help you avoid costly mistakes we have seen others make.  We will be giving you one or two points each month to help improve your performance.
 
It's OK--you can get out from under your desk

By Jim Thompson
 
The casualties of the virus pandemic in the pulp and paper industry are, on the whole, not surprising.  The sectors hardest hit have been solid wood products, white paper and some market pulp.  Although I am not sure that the market pulp was not collateral damage--pulp and paper mills run at a certain scientific balance and if you shut down one part, some times you are forced to shut down others.

Some predict the tissue shortage caused by hording will come back and bite the industry as those horded supplies are used without replenishment.  That is logical but whether it plays out or not remains to be seen. 

Personally, I don't see box demand slacking off, hence I don't see linerboard and medium experiencing any short term loss of demand.  The Green Bay Packaging project continues to be behind schedule and over budget, at least that is what the rumor mill says.  I don't expect it to start up until at least second quarter 2021, if then. 

So, stick to old Jim's mantra and you should be OK, even in solid wood.  What is old Jim's mantra?  If wood cellulose is used for its physical properties (construction, packaging and tissue) it is just fine.  It wood cellulose is used to make products that convey thoughts and ideas (fine paper, newsprint and so forth) it is deader than a door nail.  This has been true since 1994 and there is no reason to change the rules now.

Have a comment?  Email me at jim.thompson@ipulpmedia.com

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If you have a casual question or a major deal, call me on my personal cell phone - 404-822-3412 or email me at jthompson@taii.com or jim.thompson@ipulpmedia.com. We are here to help.

 

Sincerely,

 


Jim Thompson, CEO
Talo Analytic International, Inc.

 

 

 
JRT Banker's Engineer