By Mark Rushton, Graeme Rodden and Rhiannon James- van Beuningen with contributions from the entire RISI team
BRUSSELS,
June 28, 2010
(RISI) -
The RISI top 50 power list 2010: 11-20
11. Jussi Pesonen, UPM
Being the CEO of one of the largest and most well known pulp and paper companies doesn't automatically get you on the Power List - there has to be something within the company that makes it stand out from the crowd. UPM is one of those companies. Its president and CEO, Jussi Pesonen, has consistently led the company into new and innovative areas, at the same time as restructuring the existing business to keep up with challenging times.
The latest development at UPM is the Biofore concept embracing new opportunities in renewable fuels products. Pesonen states that Biofore stands for the "integration of bio and forest industries. Bioeconomy, biodiesel, bioethanol, biochemicals - the word is present in almost every new development initiative taking place in our company."
Pesonen also states that "Bio" communicates the future of UPM, and that "Fore" stands for the forest and being in the forefront.
12. James Rubright, RockTenn
After earning RISI's North American CEO of the Year honors in 2008, Rubright stepped it up a notch last year, earning Global CEO of the Year honors at the first PPI Awards in Munich. What did the judges think of Rubright's performance as CEO? "The winner has demonstrated strategic excellence and fiscal prudence, which has allowed the company to keep down costs in this challenging market. He has also shown an aptitude for picking the right acquisitions, integrating them professionally and allowing the company to diversify successfully. This has benefited the company's overall performance and taken it above its peer group."
13. Doyle Simons, Temple-Inland
RISI's North American CEO of the Year in 2009, Simons was given credit for leading the company "brilliantly" through the downturn in the economy, which has plagued the industry in the last couple of years. "Even in a very challenging operating environment, Temple-Inland was able to deliver strong results," one analyst commented. "The company's intense focus on cost reduction, productivity and return on investment permeated both the corrugated and wood products businesses." Since the decision in 2007 to spin off the company ‘s banking and real estate holdings, Temple-Inland has truly transformed itself. As another observer noted, "complacency is not an issue at Temple." A continual focus on improving its operations bodes well for the future.
14. IRS
The black liquor tax credit was probably the most talked about piece of legislation in this industry in recent history. Designed as a measure to promote alternative fuels - the original application was actually fish oil - the 2007 extension of a 2005 bill created a loophole that allowed companies to qualify for a tax credit of $0.50/gallon to mix alternative fuel (black liquor) with traditional fossil fuel, which the industry had been doing all along. This was the reverse of what the bill intended. As a result, an estimated $8 billion in tax credits was paid, creating a worldwide uproar about subsidies and forcing the Canadian government to implement its own green energy plan for the forest products industry. The Obama government abolished the credit at the end of 2009.
15. AJ Devanesan, APRIL
As President and COO of Asia Pacific Resources International Holdings Limited (APRIL), AJ Devanesan has led the company through a series of expansions whilst at the same time fighting an ongoing battle with environmental groups. The company's most recent project to grab the industry's attention is the huge new pulp mill at Rizhao in China. On the paper side, APRIL recently ordered two new 450,000 tonne/yr fine paper machines from Metso for a plant in Xinhui city, Guangdong province. Devanesan's extensive career spans well over two decades of which 12 years were in senior positions in RMG International and its affiliates, Indorayon and PEC-Tech. Devanesan holds a Bachelor of Technology degree in Chemical Engineering from the Indian Institute of Technology and is a Fellow of the Wharton Business School, University of Pennsylvania. While APRIL continues to make headlines in the sector, the company's leader prefers to take a lower profile. It is often Sunil Sood, Director of April Fine Paper Trading, who represents the company at industry events.
16. Paul Herbert, Ilim Group
Paul Herbert is the CEO of the Ilim Group, a Russian company which is a joint venture between Ilim Group and International Paper (IP). The group has very recently announced a $700 million expansion program at its Bratsk mill, close to the border with China, which will see it become a major supplier of pulp to Asia. A new pulp mill at the site will produce 720,000 tonnes/yr of bleached softwood market pulp bringing the annual pulp production at Bratsk to over 1 million tonnes.
Herbert, a qualified papermaker, has spent 37 years in the industry, including a stint as President of International Paper Europe, and as Senior VP, Strategic Initiatives, also at IP.
17. Chen Hongguo, Shandong Chenming Paper
It's hard to keep up with Chen Hongguo, CEO of Shandong Chenming Paper. A look at the company's planned list of investments is enough to set anybody's heart racing. At the flagship Shouguang mill, the company aims to invest in three new machines, spanning fine paper, tissue and linerboard. At its subsidiary, Zhanjiang Chenming, the company is building a 700,000 tonne/yr bleached hardwood kraft (BHK) pulp mill in Zhanjiang city, in Guangdong province. The BHK pulp will be integrated with a new 450,000 tonne/yr fine paper machine. Vertical integration also forms part of the strategic thinking at Shandong Chenming. This is demonstrated by its investment in fast-growth plantations in China. However, it's not all about size and growth and Chen is not on this list just because he is expanding the company. Chen is focused on stable growth at Chenming. It was this strategy that led him to be voted as the RISI Asian CEO of the Year for two years in a row in 2008 and 2009. Investment analysts have pinpointed Chen as a strong leader who has been able to maintain steady growth. More recently, Chen also found himself on the shortlist for the first ever Global CEO Award as part of the PPI Awards program launched last year.
18. RR Vederah, BILT
RR Vederah is the managing director of Ballarpur Industries Limited (BILT), India's largest paper manufacturer. Once you have met him, Vederah is not an easy man to forget. With his concise, polished phrasing and ability to command the attention of a room, he provides intelligent insights and strong opinions on the state of the Indian and Asian industry.
Apart from heading up BILT, Vederah is a powerhouse in the sector, taking part in many associations and representing the Indian sector on an international level. Vederah is the chairman of Solaris Chemtech Industries Ltd and BILT Industrial Packaging Company Limited, and a key member of the Avantha Group Council. He sits on the boards of various companies, including BILT Tree Tech Limited, The Paperbase Company Limited, BILT Graphic Paper Products Limited, Ballarpur International Holdings B.V., Ballarpur International Paper Holdings B.V., Ballarpur International Graphic Paper Holdings B.V., Sabah Forest Industries Sdn. Bhd., and Imerys NewQuest (India) Private Limited. As with many of the people included on the Power List, Vederah's travel schedule is probably not one many of us would like to undertake!
Vederah has been with BILT for more than 25 years where he has contributed significantly to its turnaround and growth. He is also the key driver of new technology and quality initiatives aimed at taking BILT into the South Asian region. And Vederah's plans are nothing if not ambitious. He is expanding both on the domestic and international front. At home, BILT is improving and expanding production in various mills, while abroad the company continues to invest in its subsidiary, Sabah Forest Industries. Given Vederah's appetite for growth, the company is definitely one to watch.
19. Cheung Yan, Nine Dragons
Having made an appearance on every RISI Power List so far, the rags to riches story of Cheung Yan, Chairlady of Nine Dragons, is well known. She was ranked the wealthiest person in China in 2007 according to Forbes magazines, but Cheung's fortunes have apparently not fared so well in recent years due to the financial crisis. Nine Dragons was forced to back pedal on some of its planned investments in 2008 and 2009, but since the early part of this year, the company has been pursuing its rapid growth strategy with renewed energy. The containerboard giant recently unveiled a massive program to bring 3 million tonnes/yr of new capacity online by the end of 2011. Six new PMs and three machine upgrades will take the company's total production capacity to 11.1 million tonnes/yr - an increase of around 26% from its current levels. The interesting twist in this plan is that it is not just focusing on containerboard. The new machines also include investments in cartonboard and printing/writing papers. The company is also reportedly looking to expand in inland provinces in China.
As Cheung commented recently, "In 2010, renewed momentum surfaces across all industry sectors in the face of continued economic growth. The announcement of state policies for promoting domestic demand and environmental protection, as well as the rapid recovery in exports all bring unlimited opportunities to large scale paper-making enterprises. We believe that there will be stronger demonstration of these trends in the second half of 2010, making us full of confidence on future development." After a subdued period in the past two years, it looks like Cheung is ready to go for gold again.
20. Yoshio Haga, Nippon Paper Group (NPG)
When Yoshio Haga took over as president of Nippon Paper Group (NPG) in 2008, it was under the shadow of a scandal. The group had admitted making false claims about the amount of recovered fiber used in a wide range of its paper products. Not only was Haga faced with a company battling with profitability and growth challenges, he also had to win back customers. Haga appears to be winning on many of these fronts and his performance so far makes him a worthy entrant again in the Power List. Although NPG is one of the leading producers in Japan, the company has ambitions to become one of the top five pulp and paper companies in the world by 2015. Haga has been implementing this "Group Vision 2015" plan in a number of ways: the main thrust of the plan is to close down unprofitable plants in Japan and expand overseas through acquisitions and joint ventures. NPG's list of recent partnerships and/or acquisitions reads like a who's who of the P&P sector: the company has struck deals with Yuen Foong Yu of Taiwan, SCG of Thailand, PaperlinX's manufacturing arm, Australian Paper and last but not least, with Lee & Man of China. Fiber is also a focus for NPG and the group has made good progress in setting up overseas plantations, with 167,000 hectares established in Australia, South Africa and Chile. The group plans to boost this to 200,000 hectares by 2015. Faced with a domestic scandal, declining demand in Japan and the need to expand internationally, Haga has certainly had his plate full since taking the reins at NPG.
The RISI to 50 power list 2010: Introduction
The RISI top 50 power list 2010: 1-10
The RISI top 50 power list 2010: 21-30
The RISI top 50 power list 2010: 31-40
The RISI top 50 power list 2010: 41-50
