Integration of Economics into Life Cycle Assessment in the Finnish Pulp and Paper Industry

Taloudellisen laskennan yhdistäminen elinkaariarviointiin (LCA) on alkanut kiinnostaa eri teollisuuden aloja maailmanlaajuisesti viime aikoina. Useat LCA-tietokoneohjelmat sisältävät kustannuslaskentaominaisuuksia ja yksittäiset projektit ovat yhdistäneet ympäristö- ja talouslaskentamenetelmiä. Tässä projektissa tutkitaan näiden yhdistelmien soveltuvuutta suomalaiselle sellu- ja paperiteollisuudelle, sekä kustannuslaskentaominaisuuden lisäämistä KCL:n LCA-ohjelmaan, KCL-ECO 3.0:aan. Kaikki tutkimuksen aikana löytyneet menetelmät, jotka yhdistävät LCA:n ja taloudellista laskentaa, on esitelty tässä työssä. Monet näistä käyttävät elinkaarikustannusarviointia (LCCA). Periaatteessa elinkaari määritellään eri tavalla LCCA:ssa ja LCA:ssa, mikä luo haasteita näiden menetelmien yhdistämiselle. Sopiva elinkaari tulee määritellä laskennan tavoitteiden mukaisesti. Työssä esitellään suositusmenetelmä, joka lähtee suomalaisen sellu- ja paperiteollisuuden erikoispiirteistä. Perusvaatimuksena on yhteensopivuus tavanomaisesti paperin LCA:ssa käytetyn elinkaaren kanssa. Menetelmän yhdistäminen KCL-ECO 3.0:aan on käsitelty yksityiskohtaisesti.

The long run impact of mergers and acquisitions on performance – empirical study in the pulp and paper industry

Mergers and acquisitions (M&A) have played very important role in restructuring the pulp and paper industry (PPI). The poor performance and fragmented nature of the industry, overcapacity problems, and globalisation have driven companies to consolidate. The objective of this thesis was to examine how PPI acquirers’ have performed subsequent M&As and whether the deal characteristics have had any impact on performance. Based on the results it seems that PPI companies have not been able to enhance their performance in the long run after M&As although the per-formance of acquiring firms has remained above the industry median, and deal characteristics or the amount of premiums paid do not seem to have had any effect. The statistical significance of the results was tested with change model and regression analysis. Performance was assessed with accrual, cash flow, and market based indicators. Results are congruent with behavioural theory: managers and investors seem to be overoptimistic in determining the synergies from M&As.

Diversification and its reflections on profitability - strategic change in pulp and paper industry in the years 1996 and 2006

The purpose of the thesis was to analyze diversification in pulp and paper industry (PPI), which is an industry facing enormous strategic challenges as many of the basic parameters of its operational environment are rapidly changing. The objective was to explore, how PPI companies have reacted to these changes by adjusting their strategies in terms of diversification and how the adjustments have affected their profitability. The study was statistical in nature. The results indicate that PPI companies in deed had reduced the degree of unrelated and related diversification , but the positive performance implications of the changes were debatable. In light of the data used in the study lower level of diversification did not lead to better profitability, in fact, the companies with the highest level of diversification had the best profitability. By contrast, reducing the level of unrelated diversification improved the profitability development; whereas reducing the level of related diversification deteriorated the profitability of the company. The results were not statistically significant and they cannot be generalized outside the data of the study.

Impact of Investment Strategies on Performance in Pulp and Paper Industry

The main objective of this study was to examine, what kind of investment strategies the leading European and North American pulp and paper industry companies (PPI) used in 1991-2003, and how the selected strategies affected their performance. The investment strategies were categorised in three classes including mergers and acquisitions, investments in new capacity and investments in existing capacity. The results showed that mergers and acquisitions represented the largest share of total investments in 1991-2003 followed by investments in existing capacity. PPI companies changed investment strategies over time by increasing the share of mergers and acquisitions, which decreased investments in new capacity especially among North American companies. According to the results, good asset quality and investments in new and existing capacity provided better profitability than often expensive acquisitions. Also the capacity decreases had a positive impact on profitability. Average asset quality and profitability were higher among European companies. The study concluded that in the long term the available value creating investment opportunities should limit capital expenditure levels, not the relation of capital expenditure to depreciation.

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.

Imaging and Characterisation of Dirt Particles in Pulp and Paper

Dirt counting and dirt particle characterisation of pulp samples is an important part of quality control in pulp and paper production. The need for an automatic image analysis system to consider dirt particle characterisation in various pulp samples is also very critical. However, existent image analysis systems utilise a single threshold to segment the dirt particles in different pulp samples. This limits their precision. Based on evidence, designing an automatic image analysis system that could overcome this deficiency is very useful. In this study, the developed Niblack thresholding method is proposed. The method defines the threshold based on the number of segmented particles. In addition, the Kittler thresholding is utilised. Both of these thresholding methods can determine the dirt count of the different pulp samples accurately as compared to visual inspection and the Digital Optical Measuring and Analysis System (DOMAS). In addition, the minimum resolution needed for acquiring a scanner image is defined. By considering the variation in dirt particle features, the curl shows acceptable difference to discriminate the bark and the fibre bundles in different pulp samples. Three classifiers, called k-Nearest Neighbour, Linear Discriminant Analysis and Multi-layer Perceptron are utilised to categorize the dirt particles. Linear Discriminant Analysis and Multi-layer Perceptron are the most accurate in classifying the segmented dirt particles by the Kittler thresholding with morphological processing. The result shows that the dirt particles are successfully categorized for bark and for fibre bundles.

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.

Use of Primary Sludge from Pulp and Paper Mills for Nanocomposites

Cellulose nanocrystals have been evaluated as reinforcement material in polymeric matrices due to their potential to improve the mechanical, optical, and dielectric properties of these matrixes. This work describes how high pressure defibrillation and chemical purification affect the sludge fiber morphology from micro to nanoscale. Microscopy techniques and X-ray diffraction were used to study the structure and properties of the prepared nanofibers and composites. Microscopic studies showed that the used individualization processes lead to a unique morphology of interconnected web-like structure of sludge fibers. The nanofibers are bundles of cellulose fibers having widths (5 to 30 nm) and estimated lengths of several micrometers.

Pulp and paper advisory group: draft resolution approved by Committee II on 25 May 1957

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