Strategic & Financial Arguments(TM)

for the pulp and paper industry worldwide

September 2016

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.

Developers up to their old tricks...

I think the readers of this newsletter are too sophisticated to fall for this, at least I hope so. Surely you did not give your clients recommendations that they should be worried about their holdings in the pulp and paper industry based on two announcements of Chinese investments in the US in the last few years.

I am talking about the announcement that Shandong Sun Paper Company was going to build a new $1.3 billion pulp mill in Arkansas and the earlier announcement that Shandong Tranlin Paper Company was going to build a wheat straw and corn stover paper mill in, of all place, Virginia. I recently wrote about both of these in PaperMoney. Now, Tranlin has changed its name to "Vastly". You can't make this stuff up, folks.

Twenty years ago it was recycled pulp mills, deinked pulp mills and even kenaf newsprint mills. How many of those do you see operating now?

If the economics, science and geography don't make sense, they don't make sense. This is not to say that "better mousetraps" don't come along now and then, but they are indeed rare.

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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