1. John Faraci,International Paper
International Paper continues to be the company to beat, especially with CEO and chairman John Faraci at the helm. Perennially the frontrunner in the PPI Top 100, Faraci continues to revamp the company to retain its top-rung position.
Closing out 2010 in what Faraci called a "transition year," one that saw record earnings in the third quarter, IP has posted strong earnings so far in 2011 and remains solid on fundamentals. Earlier this year, IP announced the acquisition of a majority stake in Indian papermaker Andhra Pradesh Paper Mills (APPM), adding strength to the paper market in the Asian region and possibly setting a trend where big market players expand their exposure in India.
Most recently, and closer to home, IP has recently attempted to acquire Temple-Inland in an effort to consolidate the packaging market. The takeover would give IP a 40% share of the containerboard market, which could raise anti-trust concerns, but analysts say the potential synergies between the two companies will eventually make this deal come together.
Faraci, an avid mountain climber who finally conquered Mount Denison after several failed attempts, has shown the tenacity to keep his eye on the long-term goal, a trait he will no doubt use to keep IP at the top.
2. Teguh Ganda Wijaya,APP
Attempts at world domination of the pulp and paper industry continues with APP still being at the forefront of major greenfield projects, expansions and acquisitions. This is the third time the CEO of APP has appeared on the RISI Power List.
The list of new projects and expansions, too numerous to mention, includes the start up of Guangxi Jingui Pulp & Paper in China earlier this year, a forest-pulp-paper operation that will see an output of 1.8 million tonnes/yr of pulp and 3.1 million tonnes/yr of paper.
But the Asian giant is not having it all its own way. Last year duties were slapped on the company's US imports of fine paper, and this year the European Union also applied duties in relation to alleged subsidies and antidumping measures against Chinese imports.
On the acquisition front, Paper Excellence, a Dutch holding company affiliated with Sinar Mas and the Wijaya family has recently moved to acquire German coated woodfree supplier Papierfabrik Scheufelen from its parent company Powerflute. This joins its acquisitions in Canada of five pulp mills: Prince Albert and Meadow Lake, SK; Mackenzie and Howe Sound, BC; Pictou, NS. It also acquired two pulp operations in France from Tembec, Saint-Gaudens and Tarascon.
3. Jim Rubright,RockTenn
After earning RISI's Global CEO of the Year in 2009, Rubright added another achievement by completing the acquisition of Smurfit-Stone earlier this year. "It's like the mouse swallowing the elephant," said one analyst. The deal positioned RockTenn to become the second largest North American containerboard producer and the top linerboard producer, sending estimated combined sales soaring 300%.
Under Rubright, RockTenn has shown remarkable stability, and the Smurfit-Stone takeover was lauded as putting the sector's most troubled player "in a strong set of managerial hands." Integration challenges pose the biggest hurdles ahead, but Rubright is bullish on US containerboard, calling it "a highly strategic global asset."
Leading RockTenn since 1999, Rubright's background as a lawyer and an astute businessman has led to some shrewd acquisitions for RockTenn, turning what was once a marginal player into a significant one in the packaging market.
4. John Williams,Domtar
RISI's Global CEO of the Year in 2010, Williams continues to gain the confidence of analysts and investors alike, sending shares of Domtar to the $100 mark. Taking advantage of government tax credits in the US and Canada, Domtar has stayed on target with the basics and posted strong earnings, a trend that should continue over the next 2-3 years, say analysts.
North America's largest market pulp producer and the world's second largest white paper producer, the company recently announced a decision to launch two greenfield paper converting and distribution units in China. The move puts an exclamation mark on Domtar's growth in China, which was largely focused on market pulp in the last four years. And Williams has managed to make pulp and paper sexy again with the building of the first commercial nanocrystalline technology plant in Windsor, QC. Partnering with FPInnovations, the new company is called CelluForce, a name that "reflects who we are, how we want to position ourselves." All part of Williams' "Perform, Grow, Break Out" strategy aimed to realign assets and reduce debt, which should provide a strong platform for strategic investments over the next few years.
5. Antonio Maciel Neto,Suzano
It should come as no surprise why this man has won RISI's Latin American CEO of the Year award two years running. The former head of Ford Motor's South American operations, Neto has been driving Suzano ahead relentlessly since taking over in 2006.
One of the most forward thinking of companies, Suzano, under Neto, is constantly looking beyond the traditional pulp and paper base. It has investments in biotechnology and will invest in three new pellet producing facilities designed mainly for export to Europe. These plants will use wood from purposely-grown "energetic" forests.
This is not say Suzano is neglecting its core; the company plans to build two new pulp mills, Maranhao and Piaui, now scheduled to start up in November 2013 and 2016 respectively. Keeping a prudent eye on the bottom line, Neto said the startups were postponed to ensure that Suzano maintains its investment discipline, which tries to keep the company's leverage between 3x and 3.5x.
6. Tablets and e-readers
Well, it looks like predictions are coming true. Apple's iPad has seen phenomenal success, and despite what looks like current delivery problems with iPad 2, tablets and e-readers of all makes and sizes have taken the world by storm. You only have to look around you on public transport and in cafés now to see the take up of the devices from Apple, Samsung, Amazon, Sony, Blackberry, etc.
Last year we had Steve Jobs, founder of Apple as the leader of the tablet brigade, but this year it could be a whole host of players as companies everywhere rush to get their offerings out in a bid to get market share. We are yet to see the true impact of the devices on paper consumption, but already RISI economists and analysts are studying and measuring the impact on newsprint, and the graphic and book paper markets and will be publishing their findings in a report shortly.
7. Jussi Pesonen,UPM
RISI's European CEO of the Year in 2011, Pesonen is unapologetic when it comes to UPM's recent consolidation of the European market with the Myllykoski/Rhein Papier acquisition. "We will not abandon those markets where we still see plenty of potential for good business!" That does not mean UPM has relinquished its investment strategy in emerging markets and energy projects either.
After steering the company through an internal restructuring, Pesonen is committed to "highlighting energy and pulp as market driven growth businesses instead of being just suppliers to the paper business." In addition to UPM's Biofore concept, analysts speculate a continued investment in Latin America and Asia, drawn by the focus on improving efficiency at the Fray Bentos mill in Uruguay and the approval for a new fine paper machine at the Changshu mill in China.
"Like in a good game of chess, you make certain moves in order to facilitate the next few moves," Pesonen said in a recent interview. "It's easy to make mistakes if you are impatient and try to jump directly into the end game." UPM is well positioned, its financial situation is improving, and Pesonen has proved that the company can transform itself to meet the challenges of the future.
8. RR Vederah,BILT
RR Vederah has recently been chosen by the financial community as RISI's Asian CEO of the Year. As the managing director of Ballarpur Industries Limited (BILT), Vederah is one of the Indian paper industry's top entrepreneurs, heading up what is the largest paper producer not just in India, but also Malaysia. The company has seen a steep rise in annual capacity over the last two years, but it is the plans for the future that really sets Vederah and BILT apart. The company late last year announced that it is making a move into containerboard production as well as a move into tissue, which adds to its expansion on the pulp front with two BHK lines starting up in the near future. The company has also been considering listing on the London Stock Exchange.
Vederah has been associated with the BILT for 25 years in various positions of increasing responsibility. He has worked with several paper companies over a period of 40 years, including Sinar Mas Pulp & Paper India. Mr. Vederah has been ranked in the top twenty of RISI's Power List for two consecutive years in 2009 and 2010.
9. Jouko Karvinen,Stora Enso
The CEO of the Finnish pulp and paper giant has been expanding the company's global at an astounding rate. From a partnership with packaging firm Inpac, enhancing access to China and India, to investing in a new containerboard machine in Poland, growing into Central and Eastern European markets, to a new pulp mill in the joint venture Montes Del Plata with Arauco in Uruguay, Karvinen must have barely slept.
The privately executed investment in Uruguay, the largest-ever in the country, is part of Stora Enso's continued strategy to shift investment to the Southern Hemisphere. In spite of considerable cost increases, the company ended the 2010 financial year on a positive note, with Karvinen saying the "short-term market outlook for the first quarter of 2011 is generally positive."
Refreshingly candid in his opinions, and known for his sound bites, Karvinen said the company must "renew and challenge" itself by investing in renewable materials through "revolution instead of evolution." Stora Enso's recent announcement to build a pre-commercial plant for microfibrillated cellulose is a clear step in that direction and looks to be another aspect of the company's future strategy.
10. Kazuhisa Shinoda,Oji Paper
Appearing once again in our Power List is Oji Paper CEO, Kazuhisa Shinoda. The company has been in the RISI news regularly this year mainly due to the devastating earthquake which hit north east Japan in mid-March this year. But challenges are nothing new to Shinoda, who has been spearheading plans abroad which now sees the company as "a large Asian producer domiciled in Japan".
One example of Oji's expansions abroad, which have been well covered in the pages of PPI, is its flagship enterprise in China, the greenfield integrated Nantong mill in Jiangsu, Shanghai. The mill, with a capacity of 400,000 tonnes/yr of coated woodfree, began commercial production late last year. But the Nantong plan goes further to include a 700,000 tonnes/yr BHKP line at the site, start up which will be in 2013. There are also possible plans for a further two paper machines at the site.
Oji is also expanding into other areas in Asia as well, particularly the south east of the region by way of mergers and acquisitions, wholly-owned projects and partnerships. Other work also goes on in energy efficiency and raising productivity as well as rationalizing distribution via alliances with Mitsubishi Paper and Tokushu Tokai.