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close this bookProceedings of the FAO Advisory Committee on Paper and Wood Products (1997)
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View the documentOutcome of the First World Conference on Finance and Marketing for the Pulp and Paper Industries

Outcome of the First World Conference on Finance and Marketing for the Pulp and Paper Industries

Bernard E. Majani
Papercast, Paris

I would just like to give you a brief presentation on the outcome of the First World Conference on Finance and Marketing (for the Pulp and Paper Industries), held in Rio de Janeiro, Brazil, from 7 to 9 April 1997. It was organized jointly by Papercast, the Brazilian Association of Pulp Exporters (ABECEL), and also the Brazilian Association of Pulp and Paper Producers (ANFPC). In fact, if you will allow me, I will take this opportunity to thank Mr Mario Leonel, the Managing Director of the ANFPC, who contributed so much to the conference's success. We had about 450 personalities from over 30 countries around the world. Bankers, financial analysts and investors were numerous, as were the companies supplying equipment, products and services to the pulp and paper industry. Consequently, participants benefited from a truly global view of the pulp and paper industry, covering financial and marketing topics, and in many instances, companies' strategies.

I would also like to mention that Mr Luis Deslandes of SOPORCEL gave an excellent speech at the conference on the analysis of the world supply and demand of pulp and paper. A presentation was also made by Mr Jeremy Wall of the European Commission, whose presence in Brazil clearly showed the interest of the European Union for sustainable forestry as well as their interest in emerging countries.

Mr John W. (Jack) Creighton, President, Weyerhaeuser Company, USA, gave the keynote address. According to him, the first imperative is to be profitable. This is the only way to raise the large required equity capital from shareholders, to guarantee supply, to devote research to improving products and to maintain mills and plants in first-class operating condition, in order to ensure consistent supplies of high quality products to customers. Excellent financial performance is also critically important to employees as it is required for training, job security and competitive wages for all. It is, also a requirement for developing the civic and cultural amenities of the community where the companies are implanted. Jack Creighton also stressed the imperative to perform well environmentally. First of all, we cannot afford to spoil the planet where we live. And secondly, because all stakeholders are environmentalists to one degree or another.

In a most enlightening presentation in Manaus, Mr Roberta Samanez-Mercado, Chief Technical Adviser to the FAO project in support of the Amazon Cooperation Treaty, stressed the immensity of the Amazon basin with its more than 1000 tributaries and its extremely large diversity be it geological, hydrological, ecological, climatic, social, economic or political.

Roberta Samanez took upon himself to destroy the many myths associated with this great region. Of course, it has never been the El Dorado promised to the early Conquistadores. However, other myths subsist such as that of the region's homogeneity; the myth of the great emptiness or virginity of the Amazon, although it is inhabited by some 20 million human beings, including one million of indigenous descent; the myth of the Amazon's immense riches or poverty; the myth that Amazonia is the “lungs of the earth” although it emits as much CO2 as it removes from the atmosphere; the myth of the Indian peoples as an obstacle to development or that of the Indian model as the only solution to development. The truth is that the Amazon generates global environmental services and has economic values. If a large part of Amazonia is to be maintained in the form of protected areas which contain optionally useful resources, the respective countries which abstain from using them should be compensated: “If collecting domestic refuse has a cost and provides environmental services, then conserving a natural area also has a value of non-use. Unless this is admitted, protecting the Amazon will not progress adequately as there is no way to block the exploitation of certain resources which are urgently necessary for the countries of the Amazon basin, without proposing compensation for their non-utilization”.

Several speakers talked about the growth of pulp and paper production and consumption in the main regions of the world: Europe, North America and Latin America, China and Southeast Asian countries. Mr Karl-Hermann Schmincke, Director, Forest Products Division, FAO, Italy, described the growth potential and fibre requirements to meet pulp, paper and paperboard demand to 2010. It is clear that new sources of industrial roundwood will have to be found, besides the natural and semi-natural forest, to meet the consumption forecast of a 1.7 percent yearly growth over the 1994 consumption of 3.2 billion m3. This can be accomplished by increasing the amount of recovered paper, non-wood fibre and industrial plantation forests.

This is what is being done in Brazil with a US$ 13 billion investment programme in new pulp and paper mills which will allow to nearly double production by 2005. Major growth is also expected in Southeast Asia and particularly in Indonesia.

As stated by Mr Sukanto Tanoto, Chairman, RGM International Corporation, Indonesia: “The era when Asia had to rely solely on pulp and paper produced from slow-growing trees, by highly paid workers and then shipped halfway around the world, is changing.”

The First World Conference on Finance and Marketing brought together, perhaps for the first time, high ranking executives from many of the world's regions, including from emerging and developing countries. It was clear to all that this was a great occasion to listen to and to meet responsible people from far away lands with different cultures, different problems and different objectives. To the surprise of many who are often ready to accuse others for the industry's financial plights, newcomers from the emerging countries appear just as anxious and capable of earning a just return on their major investments. “Successful market penetration strategies are not necessarily confrontational” said Sukanto Tanoto. They can be pursued in ways that benefit the market as a whole, offering existing players something more than a zero sum game.

To conclude this brief summary of the First World Conference on Finance and Marketing, it is good to give as an example of deep concern for the environment Klabin's forest operations at their mill in the State of ParanĂ¡. As many other Brazilian companies, Klabin owns large plantations of pine and eucalyptus forests (208 000 ha). In addition, it owns 100 000 ha of permanently preserved native forests - an unusually large area - in order to maintain the region's rich biodiversity. The company also runs educational environmental programmes for the local community through its Nature Interpretation Centre which was visited by a sizeable group of the conference participants. This very large centre offers learning and scientific activities, ecological trails in the woods and a park for breeding wild animals. Every year, about 20 000 people visit this ecological centre, many of whom are school children from the region and many other places in Brazil. Teaching young people to love and care for nature is certainly the most apt answer to promote the protection of the environment - far more efficient than any laws. It is a good example to be followed everywhere.