2005 was a challenging year for the global forest and paper industry, according to PricewaterhouseCoopers’ (PwC) ninth annual Global forest, paper and packaging industry survey. Return on capital employed (ROCE), a key measure of performance in this capital-intensive industry, fell to an average of 4.5% in 2005 from 5.3% in 2004. This is far from the target of 10 -12%. Canada’s Norbord, however, bucked this trend and finished in the number one spot globally in terms of ROCE. Norbord finished 2005 with a ROCE of 23.7%, up slightly from their second-place finish of 23.2% in 2004.
The PwC survey found that total global industry sales were up slightly in 2005 to US$340 billion from US$328 billion in 2004. Operating profits were down by 11%, however, to US$21.7 billion and ROCE fell to 4.5% from 5.3% in 2004. The Latin America region once again held the top regional ROCE spot at 8.6%, down from 9.7% in 2004.The volatility in the U.S. dollar impacted financial results. Cash flow generated from operations was down across the industry by almost 20% to US$29 billion from US$36 billion in 2004.
PwC’s 2006 global forest, paper and packaging industry survey summarises the 2005 year-over-year financial information of the PwC Top 100—the 100 largest forest and paper companies in the world with publicly available data. Companies are ranked by annual revenues.
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