OREANDA-NEWS. July 05, 2012. According to the summary of PwC’s 15th Annual Global CEO, that looks at the key findings in the forest, paper and packaging sector, 53% of FPP CEOs expect the global economy to decline this year. And only 22% of FPP CEOs are very confident they can grow their own companies’ revenue in 2012, reported the press-centre of PwC.

51% of FFP CEOs think the emerging markets will play a bigger role than the developed markets in their company’s future growth - Brazil, Russia, India and China hold the greatest potential. China comes in at number one, with 29% of FFP CEOs citing it as a key growth market.

Alexei Ivanov, partner, forest, paper & packaging industry leader PwC Russia, said:

“Heads of companies in this sector declared Russia one of the most promising markets in the world. Indeed, against a backdrop of a worsening global economy, Russian companies are in a relatively good position. Taking into account the immense potential of this country’s forest resources, Russia undoubtedly offers excellent opportunities for long-term growth for global players in the timber, paper and pulp industries.”

Another route to growth – developing new products and services. The pressure is coming directly from end users in many cases, which explains why 63% of FPP CEOs worry that shifts in consumer behavior could hurt their company’s growth.

FPP CEOs are much less likely to be revising their approach to risk than CEOs in other sectors – many of them have already taken significant steps in this area.  53% of FPP CEOs say their companies have been financially affected by the sovereign debt crisis in Europe. Nearly as many say they’ve already adapted their strategy, risk management or operational planning in response.
73% of FPP CEOs are worried about exchange rate volatility, because it is difficult to manage and has unpredictable effects on competitiveness.

FPP companies remain vulnerable to rising and fluctuating energy prices (65% are worried). The CEOs of EU-based pulp and paper producers have further grounds for worry over the impact of the carbon Emission Trading System (ETS).

FFP CEOs seem less concerned about the talent challenge than their peers in many other sectors. Only 41% see the shortage of talent as a potential threat to growth (versus 53%). Nevertheless, skills shortages have a direct impact on the bottom line, as some FPP CEOs have already discovered: 43% say their labour costs have risen more than expected in the past 12 months and 31% say talent constraints have impaired their company’s ability to innovate.

Jouko Karvinen, CEO, StoraEnso Finland:

“ We’re pushing hard on workforce mobility, succession planning, and – by mixing experienced people with the less experienced people – on-the-job mentoring.”

39% of FPP CEOs also experience trouble recruiting and retaining younger workers. FPP companies will have to do far more to attract the ‘millennials’, since the sector’s appeal to young workers is currently limited. Operational managers in mid career are the most important employees to retain.

Cheung Yan Chairlady, Nine Dragons Paper (Holding) Ltd, China:

“We have many middle management positions taken up by this young generation too, and they share the same visions and corporate culture as their colleagues. They are also committed on the paper business. I feel very confident that they will make significant contribution to the enterprise, and build a promising career future for themselves.”

FPP companies are also moving talented people from one market to another: 47% of FPP CEOs plan to use experienced employees from their home countries to plug skills shortages in new markets, while only 22% plan to do the reverse.

FPP CEOs are convinced that both the public and private sectors need to play a major role in creating and fostering a skilled workforce. 61% of FPP CEOs think it should be a top government priority.