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Strategic & Financial Arguments(TM)
for the pulp and paper industry worldwide

November 2016

Participating as industry experts in pulp and paper financing and M & A deals around the world  for over two decades, we continue to see the same mistakes made over and over.  This newsletter is designed to help you avoid costly mistakes we have seen others make.  We will be giving you one or two points each month to help improve your performance.
 
What will restrictive trade policies do to the pulp & paper markets?
 
Now that the results of the US presidential election are known it looks like the world may be headed for a period of restrictive trade policies. At least more restrictive than the recent past...
 
What will such a climate do for the pulp and paper industry?
 
When it comes to pulp, our best estimation is not much.  Pulp is most economically produced where tree growth is efficient.  Expect that to continue.  If you have any doubts about this, look at the world rubber market.  Trees that produce rubber are largely located in places like Indonesia.  The world has depended on this rubber production since long before the current spate of liberalized trade policies and it will likely do so long after any restrictions are in place.
 
Efficiency in raw material production trumps trade policies.
 
Paper may be a bit different.  There is value added in paper products that can be added almost anywhere.  The only exception to this is when logistics get in the way. For instance, parent rolls of tissue are shipped to the Middle East and converted into consumer products there.  You don't see much shipment of case lots of tissue for long distances.
 
Our industry has been a global industry for a very long time and has weathered ups and downs of trade policies for a very long time.  We don't expect to see much change, regardless of trade policies. 
If you have a casual question or a major deal, call me on my personal cell phone - 404-822-3412 or email me at jthompson@taii.com. We are here to help.

 

Sincerely,

 


Jim Thompson, CEO
Talo Analytic International, Inc.
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