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Global Paper and Board Outlook

Global Paper and Board Outlook. Alejandro Mata Economist, European Forest Products October 2013. Alejandro Mata, Economist, European Forest Products, RISI. Bachelor degree in Engineering, MBA degree earned in 2007

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Global Paper and Board Outlook

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  1. Global Paper and Board Outlook Alejandro Mata Economist, European Forest Products October 2013

  2. Alejandro Mata, Economist, European Forest Products, RISI • Bachelor degree in Engineering, MBA degree earned in 2007 • Worked in Business and Market Intelligence functions for one of Europe’s leading paper producers • Has been analyzing and forecasting the industry since 2009 • Recently joined RISI team • Author of the Paper Trader Europe, the European Graphic Paper 5-Year and 15-Year Forecasts

  3. Tough Times? Where is the industry right now? ... And where is it going?

  4. World Paper & Board Demand…Is the Global Market in Decline? Million Tonnes

  5. Global State of the Industry Are there any regional differences? Industry segment differences?

  6. Paper & Board Markets – Global • US economy accelerating • Euro area out of recession • Emerging economies growing slower than before • Newsprintpapers declining globally • Printing & writing: growth in emerging markets, contraction in mature markets • Tissue and packaging driving growth Forecast Change, 2012-2014: +5% The global picture keeps growing! Tissue Newsprint +9% -4% Cartonboard/ Other 32 mt (8%) 30 mt (8%) Printing & Writing +6% +1% 86 mt (21%) 109 mt (27%) 145 mt (36%) Containerboard +7%

  7. Paper & Board Markets – Comparison

  8. Paper & Board Markets – Europe Forecast Change, 2012-2014: -0% • Newsprintheavily impacted by new media • Printing & writing grades showing mixed trends, UM doing better than coated grades • Containerboard and cartonboard supported by economic recovery and inventory restocking • Eastern Europe driving growing trends No growth for the P&B markets as a whole Newsprint Tissue -8% +7% Cartonboard/ Other 8 mt (9%) Printing & Writing 9 mt (9%) +3% -5% 21 mt (21%) 29 mt (30%) 30 mt (31%) Containerboard +3%

  9. Paper & Board Markets – Europe • Mature vs. growing segments • Economy impacting segments differently • New technologies impacting segments differently • West vs. East • Saturated vs. unsaturated markets

  10. Different Trends Emerging in the Region • Growing vs. Declining • Demand growth in East vs. contraction in West • This applies not only to graphic grades, but also to packaging and tissue • Capacity base shifting • East will become more relevant in defining trends going forward 2.4% -3.4% * Percent change reflecting 2012 vs. 2011 apparent consumption levels for all paper and board grades.

  11. While There Is Limited Growth in Western Europe… Western European Apparent Consumption

  12. …Eastern Europe Keeps Showing Better Trends Eastern European Apparent Consumption

  13. Graphic Papers

  14. Total European Graphic Demand by GradeMillion Tonnes Average Annual Growth 2013-2015 News -3.8% CWF -3.6% Cmec -3.7% UWF -1.6% Umec -0.4%

  15. Western European Profitability (All Grades) • Price/Total Delivered Costs

  16. Western European Operating Rates • (All Grades) • Percent

  17. Announced Net Newsprint Capacity Changes for 2013-2014 vs RISI Forecast of Demand Growth for the Same PeriodThousand Tonnes

  18. Announced Net P&W Capacity Changes for 2013-2014 vs. RISI Forecast of Demand Growth for the Same PeriodThousand Tonnes

  19. Cash Manufacturing Costs* (Euro/Tonne) 2Q13 - Newsprint *Capacity Weighted Average

  20. Cash Manufacturing Costs* (Euro/Tonne) 2Q13 – Printing & Writing *Capacity Weighted Average

  21. Tough times?

  22. Thank you for your attention! For more information: World Graphic Paper 5-Year Forecast Global Newsprint Risk of Closure Study www.risi.com/gnr China’s Influence on World Graphic Paper Markets in the Coming Decade www.risi.com/chinagraphic

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