Strategic & Financial Arguments(TM)

for the pulp and paper industry worldwide

May 2014

Participating as industry experts in pulp and paper financing and M & A deals around the world for over two decades, we continue to see the same mistakes made over and over. This newsletter is designed to help you avoid costly mistakes we have seen others make. We will be giving you one or two points each month to help improve your performance.

Banker--customer or vendor?

Watch which way the money flows

I have had the privilege of being up close to many transactions over my years in the pulp and paper industry.

Many of these have been in the "project finance" realm. Others have been as an adviser to C-suite executives.

In either case, I have found pulp and paper companies have been more successful in achieving their "big picture" goals when they treat their bankers, regardless of ilk, as a customer.

Yes, at the end of the day, the bank (or lenders) collect fees, interest an so forth, but that pales in comparison with the other side of the page--the necessary funding to build and run a business.

I was reminded of this recently when I visited long retired CEO George Mead (Consolidated & Stora Enso executive) last month. He got to telling me how he always paid a lot of attention to the analysts, long before it was popular to do so. He felt this paid big dividends at the times he needed financial flexibility to achieve his company's long term goals.

Now, you analysts, who make up the majority of the readers of this newsletter, should not rest on this information. It is your obligation, to your firm and your clients to know all you can about the industry.

A good place to start is with "The Pulp and Paper Industry: A perspective for Wall Street" available here.

If you have a casual question or a major deal, call me on my personal cell phone - 404-822-3412 or email me at jthompson@taii.com. We are here to help.

Sincerely,

Jim Thompson, CEO
Talo Analytic International, Inc.

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