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Pulp and paper company turnarounds in the digital age

University of British Columbia

With the rise of the internet and electronic media, the first two decades of the 21st century have seen a rapid decline in demand for graphic paper. This dissertation examines the strategic actions pulp and paper companies have been taking to adapt to such changes in their business environment. It is structured in three chapters: an examination of recent industry trends, a survey of industry executives, and a graphical visualization of how companies’ strategies have changed over time. An analysis of the public documents of forty pulp and paper manufacturers in North America and Nordic Europe found that companies have been gradually reducing their production of graphic paper and increasing production of packaging and hygiene grades. Due to the capital outlay required to change products, larger, integrated companies have generally been more successful than smaller companies that make mostly graphic paper. One unexpected observation was that declining demand was just one of many pressures on the pulp and paper industry; company documents also frequently mentioned fibre supply shortages and government regulations as drivers of change. A survey of pulp and paper company executives and outside experts confirmed that fibre supply shortages were indeed overtaking declining demand as the industry’s number one concern, in both North America and Europe. However, declining demand continued to be the most pressing issue for about a third of the pulp and paper company executives surveyed – those that represented companies that primarily manufactured graphic paper grades. The third chapter visualized how pulp and paper companies’ strategies have changed over time, based on a four-quadrant turnaround strategy model developed by Pretorius (2008). Companies that were most exposed to graphic paper tended to be the most likely to require financial restructuring; these companies also had to make simultaneous operational and strategic changes in order to stay in business. In contradiction of the model, companies responded to some types of external turnaround causes with operating (rather than strategic) actions. Companies operating in commodity industries must often adapt their strategies to deal with cyclical downturns; this contingency is not well reflected in the extant turnaround literature.

Text

2019-12-24

Attribution-NonCommercial-NoDerivatives 4.0 International

http://hdl.handle.net/2429/72973

Forestry

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/4.0/