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South America forecasted to become a competitive force in forest, paper, and packaging industry

2 April 2013

Significant capacity expansion plans in South America are set to add between 20 and 30 million metric tons of chemical pulp to the global forest, paper, and packaging (FP&P) market by 2020. This is according to the 2013 Global forest, paper, and packaging trend watch: A changing landscape: South America’s influence on global markets report released today by Deloitte’s Global Manufacturing Industry group.

The report 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. It also 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.

“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,” said Nick Wood, director in the M&A global FP&P team. “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.

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.

“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,” said Wood.

To download the 2013 Global forest, paper, and packaging trend watch: A changing landscape: South America’s influence on global markets report, please visit www.deloitte.com/fpp.

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Notes to editors
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Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.

DTTL Global Manufacturing Industry group
The DTTL Global Manufacturing Industry group is comprised of around 2,000 member firm partners and over 13,000 industry professionals in over 45 countries. The group’s deep industry knowledge, service line experience, and thought leadership allows them to solve complex business issues with member firm clients in every corner of the globe. Deloitte member firms attract, develop, and retain the very best professionals and instill a set of shared values centered on integrity, value to clients, and commitment to each other and strength from diversity. Deloitte member firms provide professional services to 80 percent of the manufacturing industry companies on the Fortune Global 500®. For more information about the Global Manufacturing Industry group, please visit www.deloitte.com/manufacturing.

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