Despite currency fluctuations and market volatility, the global forest products industry showed some improvement in 2004, according to results released by PricewaterhouseCoopers at its 18th annual Global Forest and Paper Industry Conference in Vancouver, Canada.
Return on capital employed (ROCE) is estimated at 5.4% in 2004, an improvement over the past four years. However, the numbers still fall short of the 10-12% ROCE target required for the industry to be competitive in the capital market.
According to the PricewaterhouseCoopers analysis, global forest and paper revenues were up 8% to US$343bn in 2004 from US$319bn in 2003. Net earnings almost doubled to US$14bn in 2004 from US$7.3bn in 2003. Clive Suckling, UK Forest & Paper leader, PricewaterhouseCoopers said:
“We are slowly returning to earnings levels last seen in 2000. But many of the sectors are still struggling with overcapacity due to new production coming on stream in the southern hemisphere. Further consolidation and closure of high-cost production is needed to make the industry attractive to investors.”
