Growth Strategies in Pulp and Paper Industry: An Empirical Investigation on Profitability Effects

This study investigates whether there are differences in profitability of PPI companies based on the growth strategy they have chosen to follow. It is examined whether those companies following organic growth strategy are more profitable than those companies following acquisitive growth strategy. It is also investigated are ones larger than the others, or are ones growing faster than the others. Also, the factors affecting the profitability of acquisitive companies are further examined. The results showed that there actually are differences between the two groups. Organically grown companies were found to be more profitable, smaller and growing slower than acquisitive companies. When it comes to examining only acquisitive companies there could be found factors that better or worsen the profitability of companies. For example targets that the company has bought in developing markets were making them more profitable.

Market Opportunities for Paper Industry in Radio Frequency Identification

The paper industry has been experiencing remarkable structural changes since paper demand growth has ceased and some markets are declining. One reason behind the declined demand is the Internet, which has partially substituted the newspaper as a source of information. Paper products alone can no longer provide livelihood, and the paper industry has to find new business areas. In this research, we studied radio frequency identification (RFID), and the market opportunities it could provide for paper industry. The research combined a quantitative industry analysis and qualitative interviews. RFID is a growing industry in the beginning of its life cycle, in which value chains and technologies still evolve significantly. The industry is going to concentrate on the future, and in the long term RFID-identifiers will probably be printed on paper substrate or directly onto products. Paper industry has the chance to enter the RFID industry, but it has to obtain the required competences, for example through acquisitions. The business potential RFID offers to paper industry is inadequate, and while reviewing new strategic options, the paper industry must consider more options, for example the entire printed intelligence.

The oxygenation in biological wastewater treatment of pulp and paper industry

The UPM-Kymmene Oyj Pietarsaari pulp and paper Mill biological wastewater treatment plant was built in the 1980's and the plant has been in use ever since. During the past years there have been problems with deviations. The wastewater treatment plant needs update, especially the aeration basin, where the old surface aerators cannot produce enough mixing and indroduce oxygen enough to the wastewater. In this thesis how extra aeration with oxygen affects the wastewater treatment plant effluent was studied. In the literature part the main focus is in aeration devices, which can be used in biological wastewater treatment. The target is to compare different kind of aerators, which are suitable for pulp and paper wastewater treatment. Studies show, that EDI-aerators are commonly used and also most suitable. In the experimental part, the focus is on the Pietarsaari Mills wastewater treatment plant and oxygen aeration during autumn 2008. This thesis presents the results of the trial run. Studies show, that extra oxygen devices can produce lot a of mixing and the oxygenation capacity was more than what the micro-organisms needed. The effect on sludge quality could not been seen during the trial runs.

Economic Geographical Analysis of The Finnish Paper Industry

The purpose of this academic economic geographical dissertation is to study and describe how competitiveness in the Finnish paper industry has developed during 2001–2008. During these years, the Finnish paper industry has faced economically challenging times. This dissertation attempts to fill the existing gap between theoretical and empirical discussions concerning economic geographical issues in the paper industry. The main research questions are: How have the supply chain costs and margins developed during 2001–2008? How do sales prices, transportation, and fixed and variable costs correlate with gross margins in a spatial context? The research object for this case study is a typical large Finnish paper mill that exports over 90 % of its production. The economic longitudinal research data were obtained from the case mill’s controlled economic system and, correlation (R2) analysis was used as the main research method. The time series data cover monthly economic and manufacturing observations from the mill from 2001 to 2008. The study reveals the development of prices, costs and transportation in the case mill, and it shows how economic variables correlate with the paper mills’ gross margins in various markets in Europe. The research methods of economic geography offer perspectives that pay attention to the spatial (market) heterogeneity. This type of research has been quite scarce in the research tradition of Finnish economic geography and supply chain management. This case study gives new insight into the research tradition of Finnish economic geography and supply chain management and its applications. As a concrete empirical result, this dissertation states that the competitive advantages of the Finnish paper industry were significantly weakened during 2001–2008 by low paper prices, costly manufacturing and expensive transportation. Statistical analysis expose that, in several important markets, transport costs lower gross margins as much as decreasing paper prices, which was a new finding. Paper companies should continuously pay attention to lowering manufacturing and transporting costs to achieve more profitable economic performance. The location of a mill being far from markets clearly has an economic impact on paper manufacturing, as paper demand is decreasing and oversupply is pressuring paper prices down. Therefore, market and economic forecasting in the paper industry is advantageous at the country and product levels while simultaneously taking into account the economic geographically specific dimensions.

Value added logistics in supply and demand chain : COSTFIX : New operation model for maintenance material logistics in paper industry

This research report illustrates and examines new operation models for decreasing fixed costs and transforming them into variable costs in the field of paper industry. The report illustrates two cases – a new operation model for material logistics in maintenance and an examination of forklift truck fleet outsourcing solutions. Conventional material logistics in maintenance operation is illustrated and some problems related to conventional operation are identified. A new operation model that solves some of these problems is presented including descriptions of procurement and service contracts and sources of added value. Forklift truck fleet outsourcing solutions are examined by illustrating the responsibilities of a host company and a service provider both before and after outsourcing. The customer buys outsourcing services in order to improve its investment productivity. The mechanism of how these services affect the customer company’s investment productivity is illustrated.

The Effect of Plant Closures on Market Value: Empirical Evidence from Pulp and Paper Industry 2004-2012

The aim of this study was to research how plant closure announcements affect the market value of the largest pulp and paper industry companies in the world. Also the effect of announcements on competitors was researched and whether the location of plants, timing, reasons for the closures, and characteristics of the closing firms and competitors have an impact on the results. The overall sample included 57 events in the years 2004-2012 and event study was used as a research method. Main theories were signaling theory and spillover effect. According to empirical results, investors consider plant closure announcements as a positive signal for market value. The spillover effect on competitors was, on average, positive and characteristics of the firms and closures had an effect on the results. Furthermore, the market generally predicted the closures and overreacted to them on the announcement day and after it. It is possible for corporate management and investors to learn from the results and use them as support for their decision making.

Explaining the Shifts of International Trade in Pulp and Paper Industry

The pulp and paper industry is currently facing broad structural changes due to global shifts in demand and supply. These changes have significant impacts on national economies worldwide. In this paper, we describe the recent trends in the pulp and recovered paper (RP) production, and estimate augmented gravity models of bilateral trade for chemical pulp and RP exports with panel data. According to our results, there is some variation in the effects of the traditional gravity-model variables between pulp grades and RP. The results imply also that, in comparison to export supply, import demand plays a larger role in determining the volume of exports. Finally, it is evident that Asia, particularly China, is the most important driver of chemical pulp and RP trade: China is hungry for fiber, and must import to satisfy its growing needs. Moreover, the speed of China’s growth in chemical pulp and RP imports has been driving the increased significance of planted forests in the exports of hardwood pulp (BHKP) as well.

Structural dynamics in the global pulp and paper industry

The pulp and paper industry is currently facing broad structural changes due to global shifts in demand and supply. These changes have significant impacts on national economies worldwide. Planted forests (especially eucalyptus) and recovered paper have quickly increased their importance as raw material for paper and paperboard production. Although advances in information and communication technologies could reduce the demand for communication papers, and the growth of paper consumption has indeed flattened in developed economies, particularly in North America and Western Europe, the consumption is increasing on a global scale. Moreover, the focal point of production and consumption is moving from the Western world to the rapidly growing markets of Southeast Asia. This study analyzes how the so-called megatrends (globalization, technological development, and increasing environmental awareness) affect the pulp and paper industry’s external environment, and seeks reliable ways to incorporate the impact of the megatrends on the models concerning the demand, trade, and use of paper and pulp. The study expands current research in several directions and points of view, for example, by applying and incorporating several quantitative methods and different models. As a result, the thesis makes a significant contribution to better understand and measure the impacts of structural changes on the pulp and paper industry. It also provides some managerial and policy implications.

Paper industry in Kerala: An evaluation of labour absorption,capacity utilisation, and environmental pollution

Paper industry is one of the oldest and largest industries in Kerala. Despite the developments in the industry in terms of growth in output , value added and employment generation, many of the units face grave problems. Irrespective of the size of the plant, the problems of the industry are general in nature. The problems are galore in the supply, not the demand side. Amomg the problems, the important ones are: raw material scarcity, energy deficiency and obsolete technology. Further, the industry is subject to many controls by the Government — price control, product control and raw materials control — which result in the dwindling of profits and investments. Equally important are the reservations against the industry for polluting the environment byeffluent disposal on the one hand and affecting ecological balance by depleting the existing forest on the other. Apart from the large, medium and small pulp and paper mills, there are about 30 hand made paper units in Kerala which can be categorised as village and cottage industry. Almost all of these units began at the initiative and support of Khadi and Village Industries Commission. The primary purpose of these units is employment generation, and not profit making. Currently many of these units are in the red and many others are on the verge of closure. Therefore, a separate analysis of the growth performance, and problems and prospects of the hand made paper industry has also been attempted. It is analysed separately because of the very small size of the hand made paper units

A coupling cutting stock-lot sizing problem in the paper industry

An important production programming problem arises in paper industries coupling multiple machine scheduling with cutting stocks. Concerning machine scheduling: how can the production of the quantity of large rolls of paper of different types be determined. These rolls are cut to meet demand of items. Scheduling that minimizes setups and production costs may produce rolls which may increase waste in the cutting process. On the other hand, the best number of rolls in the point of view of minimizing waste may lead to high setup costs. In this paper, coupled modeling and heuristic methods are proposed. Computational experiments are presented.

Utilization of Spirillum volutans for monitoring the toxicity of effluents of a cellulose and paper industry

The motility of Spirillum volutans was used for monitoring the toxicity of effluents of a cellulose and paper industry. Results indicated that there was no correlation between organic content and the toxic effects of the residues in the effluents. The effluents from the chlorination step and from the sludge ponds presented the highest toxicity. on the other hand, the final effluent from the biological treatment basin had no toxic agent. This bioassay showed to be a simple and reliable technique that can be used for adequately monitoring the toxicity of effluents.