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

June 2019

Participating as industry experts in pulp and paper financing and M & A deals around the world  for over two 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.
 
What will be the future differentiator amongst Pulp & Paper companies?

By Jim Thompson
 
In a word: Service. With the coming of IoT or Industry 4.0, companies are going to have more data than ever before. This is a two-way street.
 
First, the producer companies, the manufacturers, are going to have more data about their production and their logistics. They can use this to temporarily gain a competitive advantage by bringing their customers more into the loop, e.g., your order was produced today to your specifications, it will be on the trucks tonight schedule to arrive at your facility at 10 am Thursday. After all, if Amazon can tell me to the minute when I am going to get a $15 order, it should be the same for $50,000 worth of paper, don't you think?
 
Second, customers will be able to tell producers, within 3 mm, exactly where the flaw was in the paper they bought which caused their (press) (box making equipment) (converting line) to incur a break and a loss. Essentially vision and finer resolution is coming all the way around.
 
In the end, of course, the final customer receives a better product and their expectations are raised.
 
In the meantime, those early to the game will enjoy a competitive advantage until everyone catches up and there is no choice but to produce to these new, higher standards.
 
In the stock market, this translates to the fastest and most successful will be rewarded on Wall Street first, and with a momentum the "me too" companies may not be able to catch for some time.

Have a comment?  Email me at jthompson@taii.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. We are here to help.

 

Sincerely,

 


Jim Thompson, CEO
Talo Analytic International, Inc.

 

 

 
JRT Banker's Engineer