TAPPI Engineering Conference Value Creation Trends and Implications in the North American Pulp, Paper, and Forest Products Industry, 1998 Engineering Conference Proceedings

The following paper highlights the importance of shareholder value creation for the North American pulp, paper, and forest products industry. It presents a framework for measuring value creation performance based on generally accepted financial principals. These measures include Economic Value Added (EVA’), Capital Productivity (CP), Market Value Added (MVA), and Pate of Market Capitalization @MC). These measures indicate that the North American pulp & paper industry has destroyed over $45 billion in value since 1960 and compare unfavorably to other industries. Study of causes and implications of this performance on individual companies indicates that adoption of a shareholder focus and value management is the first step in reversing poor performance. The paper concludes that companies that do not make this transition will be forced to change by competitors, merger and acquisition activity, bankruptcy, or investor intervention.