Companies that have managed to stay high in the Top 150 have had to balance ambitious expansion and dangerous debt

The high wire act needed to stay in the Top 150

The Top 150 has been one of the most enduring features in PPI over the years. Second possibly only to the Annual Review in the amount of attention that it attracts from the industry, the listing has shown staying power that has amazed many.

Its popularity probably stems from the fact that it has provided pulp and papermakers with a ready reference of their "place" in the pulp and paper pecking order down the years. That is not to say that PPI necessarily subscribes to the simplistic view that "biggest is best" in company terms. But in an industry that has often shown an apparent obsession with producing the most, at the fastest rate, on the biggest machine, perhaps the huge level of interest that is sparked by the Top 150 each year does tell us something more about our business than is immediately obvious.

As our more mature and experienced readers will undoubtedly remember, the Top 150 actually started out as the Top 100 when it was first published back in 1975. The folks who worked on the first version encountered a huge set of technical and logistical difficulties that were gradually ironed out over the many months that it took to compile the first table. Back then, PPI's editors were still adding up the totals at the bottom of each column by hand, but there were more fundamental difficulties than that to deal with at the time - as indeed, there still are today.

Apart from the fact that many countries report their financial results at different times of the year, there are also the vast variations in the accountancy systems in use around the world. Particularly in the early years, the proliferation of family-owned companies made things difficult as many reported very limited accounts (if any) and they could be long out of date. But even more troublesome for the authors of the original Top 100 was whether to compile the list on the basis of consolidated turnover or sales that were directly related to the paper industry.

In the early listings, a compromise was made. The table was graded by consolidated results, but any company that derived less than a third of its sales and earnings outside the paper industry was not included at all. This led to some anomalies and the system was eventually changed so that pulp and paper turnover became the key to calculating the position of each company.

Pick a place

Regardless of how it is compiled, the Top 150 is still regarded as an absolutely essential tool simply because it provides an annual snapshot of the development of the pulp and paper industry. This is fascinating in itself, as it is possible to track your way back through the mergers and acquisitions that have taken place over the years by flicking through past issues of PPI's corporate league table.

A long stream of tales about fraught mergers, daring acquisitions and deals that never were lurk just below the surface of the outwardly staid, statistical number count that forms the basis of the Top 150.

Looking back at just a few in no particular order, there was for example:

This last story alone kept the PPI This Week newsletter in front pages for weeks before it was eventually signed, according to the PPI editors that followed it back then. Not only that, but it also provided John Pearson (former PPI editor) with a great scoop. As he explains, "PPI was the very first to learn that the owners of Stracel had backed UPM, not Norske Skog, as their acquirer. I was dining in the Savoy restaurant in Helsinki when I overheard someone talking in French. It was a translator at a nearby table handling a conference call with the French to discuss the details of the transaction. They clearly did not expect anyone in the restaurant to understand French, so we got the scoop."

Far more unlikely stories include the one about Stora's former chairman, Bo Berggren. According to legend, when he was asked why Stora had suddenly become very acquisitive in the wake of the Billerud deal, he replied, "God told me to."

Here at PPI Mansions, we put this sort of tale down to "a lunch too far". But then, since Berggren was also pictured in PPI presenting the Pope with a book to celebrate the 700th anniversary of Stora, who can say what sort of contacts he has?

The PPI Top 100 in... 1974

1974: When North America dominated

The PPI Top 100 was first published in 1975, using data from companies' 1974 annual reports. At first sight, there are a number of familiar names, but even a cursory inspection reveals the vast scale of the changes that have been seen over the past 25 years as trade barriers have slowly eroded and mergers and acquisitions have taken their toll.

The dominance of North American groups throughout the top segment of the corporate league table is perhaps the most striking feature when viewing the table in hindsight. Many of the same names that took the top slots are still instantly recognizable today - Georgia-Pacific, Weyerhaeuser, Champion and the biggest of them all, International Paper.

Such companies led the pulp and paper world at this period in the early 1970s as North American groups took advantage of access to more resources and bigger markets. Market access played a similar role in the eminence of the likes of Bowater and Reed in the UK - two of only four companies in the entire top 20 not to be based in the USA or Canada. The remaining two out of this four were Stora in Sweden and France's Béghin-Say, while you have to look down as far as the number 23 slot to find the first Asian group - Oji Paper of Japan.

Clearly, as you will see over the next few pages, a lot has changed since then...

Among the other names of interest to look for in the 1974 table are: Feldmühle at a very respectable #24; Kymmene at a modest #56; Sappi at a lowly #96; and Norske Skogindustrier at #99.

The PPI Top 100 in... 1979

1979: Where are they now?

Just five years after the first PPI Top 100 was published, some of the trends that have created the structure of today's paper industry were already visible. Yes, North American companies still dominated, but the Japanese have much improved their position. Oji Paper is now in the number 15 slot with Sanyo-Kokusaku Pulp (18), Daishowa (20) and Jujo (26) running close behind.

Another feature to note is that many of the mills that we know today as part of one group or another were still operating independently. The Aussedat Rey and Chapelle-Darblay names that would eventually be subsumed into other corporate groupings, for example.

Leykam-Mürztaler also just managed to make it onto the list at the number 100 spot, while Bührmann-Tetterode was riding high at number 32 and KNP was anchored in the 62 position. If nothing else, the Top 100 illustrates that certain names can re-appear, as well as disappear.

In most cases though, it is the companies that have dropped off the table that should provide most food for thought for today's clutch of executives. They might well wonder what happened to many of the managers of 1979 that worked so hard for companies now long gone from the current Top 150.

Over the next few pages, you can view for yourselves the changes that have taken us toward the latest Top 150 reprinted at the end of this feature.

Among the changes and worthy mentions in the 1979 table are: Oji at a much improved #15; the introduction of the Abitibi-Price name at #25; and Leykam-Mürztaler just making it in at #100.

The PPI Top 100 in... 1989

A quick glance over the Top 100 in 1989 should include a look at: Jefferson Smurfit rocketing up to an amazing #21; Enso-Gutzeit and Metsä-Serla battling it out at #33 and #34; and Taiwan's Yuen Foong Yu arriving at #91.

The PPI Top 150 in... 1997

Among the interesting changes in the most recent Top 150 table in 1997 are: International Paper still at #1; Oji up there at #2; and a whole host of new entrants from Asia and Latin America.