Volume 17, No. 10 October 2023

Participating as industry experts in pulp and paper financing and M & A deals around the world for nearly four 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.

15 October 2023

Dip but steady now

By Jim Thompson

Those who have not been through dips in the pulp and paper industry have been a little shell shocked this year. Some seemed to think the industry could go any way but up.

Once again, this has been proven false.

What has happened, as compared to past dips in my experience, going back to the 1970's, is that the industry is behaving better.

In the old days, the solution to falling sales was to rent more warehouse space. The senior management in those days, from their own experience going back as far as World War II, was to keep making the stuff, we will sell it eventually.

The coming of the Internet taught us the fallacy of this approach. Now, discipline in production, early curtailment of production, seems to be the norm.

This means on the other side of this dip, the rebound will be faster and not involve an overhang of excess inventory.

In the meantime, production seems steady at reduced rates.

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Note: Neither I or anyone on the Paperitalo staff own any individual pulp and paper stocks.

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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 or jim.thompson@ipulpmedia.com. We are here to help.

Sincerely,

Jim Thompson, CEO

Talo Analytic International, Inc.

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