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After a difficult year, during which the industry encountered more down-time and capacity closures as a result of the weakened global economy the indications are that CEPI member countries produced less than 90 million tonnes of paper and board in 2009, the lowest annual total production since 2001. This represents a fall in the region of around 11% over 2008, which is slightly better than the European manufacturing industry taken as a whole. It would appear that the overall output performance of the CEPI countries in total during 2009 is much the same as that of the other major paper producing regions of the world.

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Published in Financial News
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Tuesday, 23 February 2010 12:00

CPI’s profits take a hit in tough market

CPI's net profit dropped 4.2 per cent to $2.04m for the first half of 2009-10 while earnings before interest and tax (EBIT) fell 27.6 per cent to $4.2m. The Australian paper giant says trading conditions remain difficult with volumes still below the levels two years ago.

In a telling insight into the current state of the domestic printing industry the company also reports its revenues from ordinary activities are down 24.6 per cent to $209m, from the $277m it recorded in the latter half of 2008.

CPI told shareholders today that in view of the still difficult conditions in the industry it has determined not to declare a dividend for the time being. CPI's share price plummeted 22 per cent following the release of its figures.

Bernard Cassell, managing director of CPI says, "During the six months to December 31, conditions remained difficult due to the depressed levels of activity in the economy generally, and the printing industry particularly. Volumes were significantly affected with anecdote evidence suggesting the industry volumes were down by 20 per cent."

Cassell also says that in line with the difficult conditions the Group has focused strongly on cost and balance sheet control. He says, "Cost control initiatives which had begun in the previous financial year, were continued and consolidated. Overheads for the first six months were 17 per cent below the prior year, exceeding the targets that had been set."

Commenting on the decision to sell its Graphics Division, with Komori presses, to Ferrostaal Cassell says, "The opportunity was taken to further rationalise product ranges and clear out discontinued lines. This process is now well advanced."

Published in Financial News
Wednesday, 24 February 2010 12:00

A CEO's Perspectives

ceo-2009CEO Perspectives in the Forest, paper & packaging industry worldwide - 2010 Edition

PricewaterhouseCoopers recently conducted its third series of in-depth interviews with CEOs in the Forest, Paper and Packaging (FPP) industry. We interviewed 33 executives from leading companies around the world. The objective, as with the first two sets of interviews in 2006 and 2007, was to learn more about executives' opinions of the state of the industry, the key issues it faces and its future direction.

Our last edition of CEO Perspectives grappled with major changes in the world in which the FPP industry operates. The years 2008 and 2009 saw global credit markets, and then the world economy, go into freefall. The crisis exacerbated existing declines in some markets and precipitated steep drops in demand in many others, particularly in mature markets.

It has also highlighted the split between mature and emerging markets; China and India experienced much shorter and less severe shocks than did Western Europe and North America. So far, the FPP industry has seen relatively few business failures, even in struggling markets – but very few companies can point to real successes either. So how will the industry reshape itself to meet future challenges? Our study takes a look at the types of transformation needed in the industry, and elaborates on four key trends in the following discussion.

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Published in Financial News