RISI's 2018 Power List: Sneak Peek

GRAEME RODDEN & MARK RUSHTON

The year marks the 11th Top 50 Power List. In this exclusive Ahead of the Curve sneak peek, we give you a glimpse of the top players. The full list appears only in Paper360°'s July/August issue, which is due to hit desktops this week in both print and electronic versions.

For the first time, we feature an institution, rather than an individual, at the top of the list. Yet there is no doubting the influence the Peoples' Republic of China has had on the industry, dating back a couple of decades but intensifying recently, particularly with its ban on many grades of recovered paper.

When we look at our highest-ranked individual, the mega-merger of Fibria and Suzano certainly casts the spotlight upon Walter Schalka. It has been for good reason that he has been chosen RISI's Latin American CEO of the Year four years running. International Paper has also garnered its share of headlines with its hostile bid for Smurfit Kappa. As of June 6, the bid has been withdrawn—but is this the end of the story, or just the prequel to another summer blockbuster next year?

We hope you enjoy this year's list. You will find a few more surprises, some new faces, and as always a keen look at how our remarkable industry keeps growing and changing. This is not a scientific study, nor is it a popularity contest; it is purely a ranking put together by the editorial team after speaking to a lot of pulp and paper industry experts from around the world. (As in the past, we've chosen to concentrate on leaders from the manufacturing side of our industry.)

We would really like to hear from you as to who we might have missed, or indeed who should not be on the list at all! Contact Graeme Rodden at grodden@tappi.org, or Mark Rushton at mrushton@tappi.org, with your own thoughts on who really wields the power in pulp, paper, and packaging.

1. GOVERNMENT OF CHINA
"Crazy like a fox" is how RISI's Chief Economic Advisor Rod Young described the government of China during PaperCon 2018. China's recovered paper policy has not only affected the RCP market but the global paper industry. In early May, China announced it would inspect 100 percent of all US shipments to China. A major exporter claimed China's action was "not because of issues" in terms of low-quality US material being shipped into China. Contacts surmised the sudden move by China was related to ongoing trade disputes with the US. Other Asian countries' policies concerning contaminant levels are also becoming stricter. Now, Young added, some Chinese companies are looking at investing in shuttered US mills to convert them to recycled pulp thus leaving the waste in the US. He added that there are no indications the Chinese government will loosen its restrictions any time soon, saying the current situation could last two to three years.

2. PLASTIC IN THE OCEANS
It's all over our TV screens, on news sites, and on the front pages of newspapers around the world: plastics are killing our oceans and the wildlife that resides within them and on their surfaces. A lot of the offending plastic bits are single-use products, for instance plastic bags, water bottles, or snack wrappers. According to statistics, each year there are 300 million tons of plastic produced globally, of which 10 percent will end up in the sea. There is also the problem of microplastics being digested by sea creatures and birds across the world. The pulp and paper industries have a great business opportunity to replace most plastics in packaging, and microplastics, with cellulose-based alternatives. But it's more important than "just business." We have a moral obligation—if we have solutions to the plastics problem, then they must be brought to the table, right now.

3. WALTER SCHALKA
SUZANO
As well as recently being named RISI's Latin American CEO of the Year for the fourth consecutive time in 2018, and successfully leading his company into the tissue sector, Schalka is now leading Suzano into its biggest venture yet, a merger with Fibria that creates an 11-million metric tpy market pulp behemoth. If all goes well, the merger should be complete by late 2019. Fibria is the world's largest market pulp producer and had been romanced by Paper Excellence prior to the deal with Suzano being announced. Although both Suzano and Fibria have new mills about to come online, future expansion plans have been put on hold while both companies concentrate on the deal.

4. MARK SUTTON
INTERNATIONAL PAPER
Since joining IP in 1984 as an engineer, Sutton has spent his entire career with the company, growing into the role as a leader who embodies the "IP Way Forward." Shareholders have seen increases in annual dividends for six years straight and IP remains an industry leader committed to growth using a strategy Sutton summarizes as "building advantaged positions, and serving attractive markets," particularly in the company's pulp and corrugated packaging businesses. European packaging market leader Smurfit Kappa Group's stocked soared 22 percent when the company rejected IP's takeover bid in March 2018; in late May, a group of three shareholders (including British asset management firm Janus Henderson Group PLC) urged the company to begin working toward an agreement with IP. Though IP had indicated it may have been willing to sweeten the deal, on June 6 the company dropped its bid due to a lack of engagement. Under Irish rules, IP cannot make another attempt to acquire SKG for 12 months.

5. WU MINGWU
SHANYING INTERNATIONAL HOLDINGS
RISI's Asian CEO of the Year for 2018 heads up China's third largest producer of paper, board, and tissue, but it's Shanying's international market exploration that has attracted the most attention. Last year the company acquired a 100 percent stake in Sweden-based specialty paper producer Nordic Paper for US$288 million. Added to this, RISI recently reported that Shanying International is set to take a majority stake in Boreal Bioref, a Finnish company planning to build a 500,000 tpy pulp and bioproducts mill in northern Finland, a move that will triple the company's pulp capacity over the next three years.

Graeme Rodden is senior editor, North and South America; and Mark Rushton is Senior Editor, Europe and Asia, for Paper360°. Visit paper360.tappi.org

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