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NE Minnesota Pulp and Paper Industry: A decade of change 2010-2020.

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Presentation on theme: "NE Minnesota Pulp and Paper Industry: A decade of change 2010-2020."— Presentation transcript:

1 NE Minnesota Pulp and Paper Industry: A decade of change

2 Jussi Pesonen, Pres/CEO UPM: “Structural changes in the industry – intensified partly by the financial crises – are both inevitable and necessary. The new forest industry is currently seeking its form.” 1/2009

3 NE MN Pulp and Paper Mills:

4 Paper End Use and Consumption Trends End Uses (NA) Demand by Grade (NA)

5 But Pricing Has Held, Mostly… Q: WHY?

6 A: M&A/Cost Control/Efficiency/Capacity Shuts

7 Mill Mgr. Challenge: Compete in Class Lowest Cost Mill“Our” MillAverage Cost MillHighest Cost Mill CFS Cash Cost (US $ / Ton) Ongoing Capex / Credits Chemicals Materials Hourly Labor Overhead Energy Fiber

8 Mill Mgr Challenge: Compete in World Total Cash Cost and Cumulative Production Cumulative Production, FST per Year (x1,000,000) C o s t, U S D p e r F S T Asia Pacific Europe North America © Fisher International, Inc. Source: FisherSolve™

9 Mgr Challenge: New Product Development (Seeking higher margins)

10 Corporate Challenge: Revolutionary Product Development (seeking growing and high margin market) Sappi – Dissolving Pulp UPM – Biodiesel

11 What can NE MN Landscape Plan Do? Keep fiber costs down Retain logging, forest mgmt and mill infrastructure Support new developments at mill sites and in region Other: The new forest industry is currently seeking its form.” J. Pesonen, UPM


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