The PPI Top 100

By Rhiannon James, Senior Vice President

BRUSSELS, Sept. 24, 2008 (Viewpoint) - Despite a major refocusing of operations over the past few years, International Paper (IP) has held on to its crown and is again the number one in PPI’s Top 100 ranking of the global pulp and paper industry. IP recently closed a deal to buy Weyerhaeuser’s Containerboard, Packaging, and Recycling assets, making it the world’s largest containerboard/corrugated box producer – so the company looks likely to stay at the top for a while longer. Stora Enso is once again in second position and Procter & Gamble holds on to third. In fact, there has been little movement in the Top 10, with Mondi being the only new entrant and Weyerhaeuser dropping to 12th place following the sale of its fine paper assets to Domtar.

Unsurprisingly, the major Chinese producers have again moved up the table. Shandong Chenming is now at 43, Nine Dragons has moved up to 54, Lee & Man has jumped to 61 and Shandong Huatai is at 85th place. Overall, Asian companies make up 16.3% of the net sales of pulp, paper and converting among the Top 100 firms in the industry. For the first time this year, there are more European companies on the list than North American, but the US and Canadian companies still account for the largest percentage of net sales at 37.4% compared to 36.0% for their European counterparts. In terms of production, the Million Tonners’ club has 55 members this year (compared to 57 companies last year), but they produced more tonnes of paper and board as a group.

This year we’ve said goodbye to several companies who have been regulars on the PPI Top 100 over the years. The two biggest names to disappear from the list are of course Bowater, ranked number 23 on last year’s list, and Abitibi-Consolidated, number 19 in 2007. The newly merged entity AbitibiBowater sits at number 24 this year. Other names missing from the list include SP Newsprint (bought by White Birch Paper), Longview Fibre (now private), Pope & Talbot (no financial results available) and Felix Schoeller (declined to supply financials this year). Unfortunately Rottneros, Shandong Bohui Paper and Copamex all narrowly missed out on being included because they were not quite big enough. Recent news that PaperlinX is looking for a buyer for Australian Paper means that we could see the company disappear from the list next year. Luckily, there are quite a few new names making an appearance in 2008, helping us to keep the overall list at 100. New additions to the list this year include Advanced Agro, BILT, and Prinzhorn.

As the financial results represented in the Top 100 are for the year ending 2007, there have naturally been some major changes in the industry during 2008 which will have an impact on next year’s results. Following consolidation moves in a number of sectors, there will likely be several companies boasting larger results in 2008 than in 2007. After merging with Altivity Packaging on March 10, 2008, Graphic Packaging expects the new joint company to have $4.4 billion in sales. Similarly, with the addition of Stora Enso’s North American assets, NewPage is heading for $4.5 billion in net sales. Even bigger on the Top 100 radar will be Sequana Capital: the French giant expects pro-forma sales to be Euro 5.4 billion with the full impact of Dalum Papir and Map on its books this year. And if the VCP/Aracruz link-up goes ahead, we expect to see this new Brazilian giant shoot up the rankings in our September issue next year.

See Related Tables (pdf format):

• PPI Top 100 of 2007
• The Million Tonners' club
• Portrait of the Top 100 by Corporate Size
• Geographic Portrait of the Top 100
• Top 100 in Alphabetical Order
• Currency Conversion Rates to the Dollar

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