Increasing cost pressures, supply chain efficiency, greater customer focus and improved long-term sustainability top the list of key concerns for CEOs in the forest, paper and packaging industry. This is according to the results of a new survey just released by PricewaterhouseCoopers.
‘CEO Perspectives – Viewpoints of CEOs in the forest, paper & packaging industry worldwide’ comprises the views of CEOs from companies across the world with a combined sales total of US$70 billion. The survey explores their views on the state of the industry, the key issues it faces and its future direction and is the result of interviews with leading CEOs conducted by PricewaterhouseCoopers.

Robert Barnden, Global Forest, Paper & Packaging leader, PricewaterhouseCoopers said:

“Our main observation from the interviews we conducted is the range of different concerns among CEOs. The profit squeeze on the industry means that executives are juggling their approaches to make supply chains better and towards the emerging markets, sustainability and a stronger focus on the consumer – not easy challenges.”

Among the CEOs, customer retention and defending a strong market share were seen as key priorities.

All CEOs questioned are looking towards the emerging markets – either as a new customer base or for their advantageous conditions – but not all are looking in the same direction. Demand is shifting towards Asia-Pacific while fibre supply is shifting towards South America. While some CEOs see most opportunity in China and Asia, others view markets such as Russia as the next global giant in terms of low-cost fibre supply and close proximity to high-growth consumer markets like China.

Most executives reported the need to achieve better balance to allow for profitable operations through ensuring higher growth emerging markets are developed while offsetting production in existing mature markets.

For most, although there was optimism about growing demand for, and the long-term viability of the sector’s products, there is major concern over the increasing pressure on the cost structure of the industry over the short term. CEOs are taking various measures to focus on building short-term profitability, including reducing capacity to restore a better equilibrium between supply and demand in mature markets. However, there was a view that strong leadership is needed to break the cycle of low return expectations within the industry.

Knowing their customers and the markets in which a company operates is a prime concern for most CEOs interviewed, as companies refocus on this area to both strengthen existing customer relationships and in the search for new markets.

Robert Barnden, Global Forest, Paper & Packaging leader, PricewaterhouseCoopers said:

“Many companies have...