The financial services firm has unveiled its new report entitled 2013 Global forest, paper, and packaging trend watch: A changing landscape: South America’s influence on global markets.
The report states that significant capacity expansion plans in South America are set to add between 20 and 30 million metric tons of chemical pulp to the FP&P market by 2020.
It also highlights the growing influence of South America on the global FP&P industry as an emerging consumer base as the region’s reliance on paper imports to satisfy growing demand is expected to continue.
The report forecasts that South America, with its current investments into high-tech production facilities, could also stake a competitive position in global markets should wood-based and other cellulosic bioenergy reach commercial-scale production.
Global market
M&A global FP&P team director Nick Wood said: “The planned expansions of chemical pulp will likely have a profound impact on the global market and will likely influence strategic investments by producers over the coming years.
He added: “For example, certain European FP&P companies have already made significant investments in South America. The new technology and more efficient processes in the advanced mills serve as a competitive advantage to companies in the region.”
According to the report, seven to eight million metric tons from five South American producers are expected to be available in 2014 targeted mainly for the export market.
“With overall global demand light, South America’s export competitiveness might be tied to their most significant trading partner, China, in the years to come as China remains the largest global consumer of chemical pulp,” said Wood.
Chinese demand
The report concludes that open markets, renewed European and North American consumption, and meeting forecasted Chinese demand are needed to support longer-term growth for the global FP&P industry.
Additionally, it discusses South America’s potential to emerge as a significant force in the industry, driving other regions to take notice and adapt accordingly.
Wood added: “The global FP&P companies that have made strategic investments in emerging markets such as those in South America will likely have a competitive advantage as the industry continues to evolve in the future.”
