Displaying items by tag: Deloitte
South America forecasted to become a competitive force in forest, paper, and packaging industry
Significant capacity expansion plans in South America are set to add between 20 to 30 million metric tons of chemical pulp to the global forest, paper, and packaging (FP&P) market by 2020. This is according to the2013 Global forest, paper, and packaging trend watch: A changing landscape: South America's influence on global markets report released today by the Deloitte Touche Tohmatsu (DTTL) Global Manufacturing Industry group.
The report highlights the growing influence of South America on the global FP&P industry as an emerging consumer base as the region's reliance on paper imports to satisfy growing demand is expected to continue. It also forecasts that South America, with its current investments into state-of-the-art production facilities, could also stake a competitive position in global markets.
"The planned expansions of chemical pulp will likely have a profound impact on the global market and will likely influence strategic investments by producers over the coming years," said John Dixon, Global Forest, Paper, & Packaging Sector Leader, DTTL. "For example, certain European FP&P companies have already made significant investments in South America. The new technology and more efficient processes in the state-of-the-art mills serve as a competitive advantage to companies in the region."
According to the report, seven to eight million metric tons from five South American producers are expected to be available in 2014 targeted mainly for the export market. "With overall global demand light, South America's export competitiveness might be tied to their most significant trading partner, China, in the years to come as China remains the largest global consumer of chemical pulp," said Dixon.
The report concludes that open markets, renewed European and North American consumption, and meeting forecasted Chinese demand are needed to support longer-term growth for the global FP&P industry. Additionally, it discusses South America's potential to emerge as a significant force in the industry, driving other regions to take notice and adapt accordingly.
"The global FP&P companies that have made strategic investments in emerging markets such as those in South America will likely have a competitive advantage as the industry continues to evolve in the future," adds Dixon.
To download the 2013 Global forest, paper, and packaging trend watch: A changing landscape: South America's influence on global markets report, please visit www.deloitte.com/fpp.
SOURCE Deloitte Touche Tohmatsu Limited
China will lead industry growth for 2012 predicts Deloitte
According to the 2012 Global forest, paper, and packaging sector outlook from Deloitte Touche Tohmatsu Limited’s (DTTL) Global Manufacturing Industry group, the forecast for this sector is closely tied to economic and operational dynamics at the regional level, and how they impact the global supply chain of the industry.
According to the report, China is expected to lead the sector in growth for 2012 due to increasing demand in the Asia Pacific region. However, Chinese companies are confronted with profitability challenges because of raw material cost and producer fragmentation.
Modest growth is anticipated in North America overall, but several subsectors will still face difficulties ahead.
“A handful of well-managed paper and packaging producers will continue to focus on operational efficiencies and cost containment strategies while building strong cash reserves on their balance sheets,” said John Dixon, global forest, paper, and packaging sector leader, DTTL. “These companies are in a good position to make bold moves into adjacent products, enter new emerging markets, or further their market share through acquisitions. They are also able to better address the growing challenge of securing limited natural resources and manage the uncertainties of government regulation. The widening gap between the haves and have-nots could have a material impact on the global dynamics of the industry.”
Europe is facing a potential economic recession due to declining demand and overcapacity for paper products. Meanwhile, growth in South America is slowing, with only an incremental increase in pulp and paper demand expected for 2012.
“Pulp producers are nearing the bottom of the roller coaster ride that they have been on for the past year and a half. Pulp prices have tumbled from their recent highs thanks to an 18 percent increase in inventories compared to last year when there was a scarcity of pulp throughout the world,” said Dixon. “At the end of the first quarter in 2012, prices are beginning to recover, led by South American producers. The global forest, paper, and packaging companies that have made the necessary adjustments to strengthen their position through liquidity, operational efficiencies, and opportunistic growth will likely have a strong performance year in 2012 and will continue to influence the on-going evolution of the industry.”
To access the 2012 Global forest, paper, and packaging sector outlook, please visit www.deloitte.com/manufacturing.