OREANDA-NEWS. February 22, 2008. Forest, paper and packaging (FPP) companies are adjusting to a changing environment, according to CEO Perspectives. Viewpoints of CEOs in the forest, paper & packaging industry worldwide, launched today by PricewaterhouseCoopers. Interviews with 26 FPP CEOs across the developed and emerging markets identified four key trends — attaining the right business model, cost control, sustainability and leadership, reported the press-centre of PWC.

Alexei Ivanov, forest, paper & packaging leader, PricewaterhouseCoopers commented:
“The forest, paper and packaging industry is at the heart of many of the most important and intense debates taking place in both political and corporate circles, as well as within society at large — climate change, sustainable development, the future of the planet’s forest and the most appropriate use of fibre resources.

The industry has already had to cope with a considerable amount of change, but it remains quite traditional in certain respects. If it is to address the challenges it now faces, it will have to shed these traditions and become more innovative. It will also have to develop a robust system for managing change.”

Many FPP CEOs see the Declining demand as an issue, particularly in commodity segments like newsprint and building products market. But other executives are more positive and argue that increasing demand in emerging markets could offset falling demand in more mature markets. By 2050, the seven largest emerging market economies (China, India, Brazil, Russia, Indonesia, Mexico and Turkey) will outstrip the world’s largest developed economies (US, Japan, Germany, UK, France, Italy and Canada).
Increasing energy and logistics costs, as well as the currency exchange rates continue to be a major cost control challenge for most of the respondents.

Many forest, paper and packaging companies are failing to attract the best and brightest new joiners; without a strong contingent of younger people in the pipeline, they will be hard-pressed to fill upper-level management vacancies as they arise.

The leading global FPP companies are at the forefront of the increased focus on operating in a sustainable manner. In fact, FPP is among the most sustainable industries in existence, irrespective of a poor image as the “destroyer” of the world’s forests.

“Sustainable development continues to be a key issue in the interrelationship between the state and businesses in Russia. The State policy is currently aimed at improving transparency of the industry and attracting investments into the production, which includes the processing of raw materials. The introduction of the Forest Code with effect from 1 January 2007, as well as subsequent by-laws designed to streamline the relationship between all market players, should help improve the investment attractiveness of the industry” — comments Alexei Ivanov.