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The RISI top 50 power list 2010: 1-10

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The RISI top 50 power list 2010: 1-10

June 27, 2010 - 22:05

BRUSSELS, June 28, 2010 (RISI) -The RISI top 50 power list 2010: 1-10

1. John Faraci,International Paper

No list of the most influential people in the pulp and paper industry would be complete without IP's chairman and CEO. The company has just announced a massive investment together with its partner, Ilim Group, at its Bratsk mill in Russia, setting itself up to be an even more important player in the Chinese pulp market. Last year also saw the successful startup of its new paper machine in Três Lagoas, Brazil, adjacent to the new Fibria pulp mill. Analysts also say the company's fundamentals are strong. During the recession, Faraci made tough decisions to close capacity and run production to demand. The company came through the recession in good shape. As a force in containerboard, it should be noted that US inventories are at a 29-year low and operating rates are at 95%. Prices have risen 10% since March and the outlook looks promising. Finally, earlier this year, IP purchased SCA's Asian packaging business including 15 box plants. Under Faraci, IP looks poised for more growth. It's no secret why IP heads PPI's Top 100 list year after year.

2. Antonio Maciel Neto,Suzano

In last year's list, we said the company has become a "giant among giants" in the pulp and paper industry. Neto is pushing the company to even greater heights. As well as the growth acknowledged last year, the company has announced plans to construct two new pulp mills with a total capacity of 2.6 million tonnes/yr with startups scheduled in 2013 and 2014. There are plans for a third new mill as well at a site to be decided. And, expansion of the existing Mucuri mill is in the works. In 2010, the company will plant more than 145 million seedlings to feed the mills. And, under Neto, the company is also looking at new technology. It recently purchased Futuragene, a pioneer in biotechnology research and development, particularly as it relates to forestry.

3. Teguh Ganda Wijaya,APP

The chairman and CEO of APP has appeared on all of our Power Lists so far, and this year is no exception. Wijaya has proclaimed that it is the company's mission to be the "number one supplier of paper and board in the world", and its aggressive investment in Asia currently backs up this mission statement - APP China has recently started up what is the world's largest paper machine on Hainan Island. Analysts believe that this and other major investments will create overcapacity in China and will thus have a huge effect on global export markets. We are already seeing the first consequences of antidumping measures being introduced in US and Europe. There are also rumors of major investments abroad, either in Europe or the US in the shape of acquisitions of ailing companies in the regions.

4. Jose Luciano Penido,Fibria

Number 1 in 2009 and RISI's Latin American CEO of the Year two years running in 2007 and 2008, Penido slips back a few notches this year but not due to any mistakes on his part. Once again, he pushed all the right buttons leading the company through a complex merger and realizing the opening of the company's new Três Lagoas mill. And, he is obviously not finished as the company plans to build a second million tonne-plus pulp mill at Três Lagoas as well as a greenfield pulp mill in Rio Grande do Sul State. Also in the works are new pulp lines at the Veracel and Aracruz mills. The world's largest market pulp producer is poised to become even bigger.

5. Steve Jobs,Apple

The launch of Apple's iPad has been probably been the ICT (Information Communication Technology) event of the 21st Century. And it could have huge repercussions for the global pulp and paper industry - especially if the take up is anything like what has happened with the iPod and iTunes in the music industry. In the medium to long term future, the paper industry and associated printing businesses could be directly hit by dramatic falls in production and revenue as the younger generations bypass "old fashioned" books magazines and newspapers and instead read their favorite editorials, articles and authors on the iPad and other devices like it.

The founder and CEO of Apple, Steve Jobs has reached the top of our Power List because he is widely regarded as a creative genius in this field, and is a key driver in the production of consumer-cool gadgets that set hearts and desires racing, particularly among the under 30s. Described in a recent interview withTimemagazine as a "showman, perfectionist overseer, visionary, enthusiast and opportunist", he is the hands-on force at Apple, and "insists upon design, detail, finish, quality, ease of use and reliability" - all the elements that have been variously lacking from e-readers up until now.

The fact is, ICT is everywhere, on our phones, PCs, e-readers and iPads. One of the serious problems the industry faces is proving that print on paper is much more sustainable than these electronic devices, which not only use energy, but also are made out of many precious metals and resources that can never be replaced, for example fossil fuels.

But clearly, Jobs is one to watch for the next innovation that could have an even more powerful impact on the industry.

6. Li Hongxin,Shandong Sun Paper

It should come as no surprise to see Li Hongxin in the Power List this year, following his nomination as RISI's Asian CEO of the Year 2010. Li is chairman and general manager of Shandong Sun Paper Industry Joint Stock Co. Ltd, which was established in 1982. Over the past few decades, the company has grown rapidly and now boasts assets of RMB 13 billion, an annual pulp and paper capacity of 3 million tonnes, and a staff of more than 10,000 people. Li does not plan to stop there either. His vision is to grow the company's capacity to five million tonnes by 2012, while at the same time establishing low carbon, environmentally friendly operations.

In particular, Li has been riding high over the past two years and he doubled the company's net profit in 2009 compared to 2008. Li is very keen on following a strategy of forestry-pulp-paper integration, one of the reasons why analysts voted for him as the RISI Asian CEO of the Year. He has already put down roots in Laos and Vietnam to secure fiber needs.

Li is no stranger to awards and his recent social honors include: National Labor Model, National Township Entrepreneur, Leader of first China Cailun Award, Top Ten Moving China People 2007, the Most Influential People of Shandong's Private Economy since China's Reform and name but a few.

Despite Li's numerous awards, the chairman remains a modest man who believes in open communication and co-operation. In a recentPPIinterview, Li commented, "We will build forests, and green and ecologically sound production facilities allowing our staff to live and work in peace and contentment and work happily in a good environment." Li continued, "There is a Chinese saying, ‘when you drink the water it reminds you of the source of the stream', meaning be grateful for favors received and not to forget one's origins."

7. Randy Nebel,Longview Fibre Paper & Packaging

A turnaround genius, Nebel took a moribund mill in Washington state, one that many believed should have closed, and with the help of his entire team, made the mill a true success story. Nebel always said that Longview was a "diamond in the rough" that just needed to be better operated. Longview is very selective in its market approach, aiming to be Number 1 or 2 in any market in which it competes. The company is ambitious in its product development. And, Longview has upgraded its market intelligence greatly. It is no surprise that the company has gone from a money loser to profitable under Nebel's guidance once Brookfield Asset Management took over in 2007. And, it did not hurt when one of its largest competitors on the West Coast closed permanently in early 2010.

8. Mother Nature

Mother Nature is often portrayed as a benevolent, gentle being taking care of the flora and fauna that surrounds her. Unfortunately, she has a dark side. One that Chileans felt deeply in February 2010 when a horrific magnitude 8.8 earthquake rocked the country. No stranger to these quakes, the country was the site of the strongest earthquake ever recorded, magnitude 9.5 in 1960, with the epicenter in Valdivia, near where a pulp mill has since been built. Although the country knows how to construct buildings to withstand quakes and building codes are rigid, there is no protection against a disaster of this order. Loss of life and property was large. The earthquake knocked out most of the country's market pulp production, sending papermakers scurrying to find new supplies. Approximately one million tonnes of capacity was lost although most, but not all, mills are now up and running. The country's pulp and paper producers such as Arauco and CMPC suffered deeply but have bounced back and were instrumental in helping their fellow citizens recover donating massive amounts of aid.

9. Jouko Karvinen,Stora Enso

Karvinen has been voted for by financial analysts as the RISI CEO of the Year twice in three years, in 2008, and in 2010. The straight-talking Finn has been described by analysts as "the true leader of the European paper industry". Some sound bites we have elicited in our interviews with Karvinen include "the good times are not coming back, thus hard actions are a necessity", "others will follow, but many are still living in a bubble" and "Don't talk - walk". Stora Enso under Karvinen's leadership has launched a two pronged attack in search of profitability; the drastic scaling down of expensive operations in the Northern Hemisphere, and increased investment in the Southern Hemisphere, particularly in Latin America. The company has two large scale joint venture projects ongoing in South America, Montes Del Plata with Arauco, and Veracel II with Fibria. Karvinen toldPPIin an exclusive interview earlier this year that "both pulp mills will be the best in the world".

10. Kazuhisa Shinoda,Oji Paper

As president and CEO, Kazuhisa Shinoda, has presided over the good times and bad times at Oji Paper in recent years. Following the recycled content scandal that engulfed many Japanese papermakers, Shinoda has turned his focus to growing the company overseas and managing the domestic demand situation through capacity rationalization. Oji Paper is no stranger to international expansion, having started very early in the game. The company invested in New Zealand's Pan-Pacific Forest Products in the 1970s and continued in the following decades with investments in Celulose Nipo-Brasileira (CENIBRA) in Brazil, as well as Howe Sound Pulp and Paper and Alberta-Pacific Forest Industries in Canada. On top of that, the company has invested directly or as a partner in 178,000 hectares of offshore plantations in China, Vietnam, Australia, Brazil and New Zealand.

However, it is the company's recent and planned expansion activity overseas that has landed Shinoda in the Power List for 2010. Oji Paper started up a huge new fine paper machine in May this year at its greenfield Nantong mill in Jiangsu, China. The PM is part of a billion dollar project that will include a new 700,000 tonne/yr BHKP line starting up in 2013 at the same site. Not content with its foray into China, Oji also snapped up GS Paper & Packaging in Malayasia in March and plans to expand into India and other areas of East Asia. In fact, the company will be establishing a new South East Asia business division with target sales of Yen 50-100 billion. Shinoda's ambitions are to grow total net profits to over Yen 50 billion for the full year 2012, an increase from the projected Yen 28 billion for 2010.

The RISI to 50 power list 2010: Introduction

The RISI top 50 power list 2010: 11-20

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