2 INDUSTRY NEWS
International Paper drops its hostile bid for Smurfit Kappa
Kappa, it said in May. Earlier, in March, Smurfit Kappa had already rejected an improved offer that would have combined the largest paper packaging manufacturers in North America and Europe in a business with annual sales of around $32 billion. Smurfit Kappa had argued that
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it was better served pursuing its future as an independent company. The Irish Takeover Panel said
that, following representations made by Smurfit and its advisers, International Paper had three weeks until 6 June to announce whether or not it will follow up with a binding offer. “From the outset, IP has stressed
the importance of proceeding on an agreed basis. To that end, IP confirms that it will not proceed with a binding offer unless it is recommended by Smurfit Kappa’s board of directors,” said the panel. The IP cash and shares bid in
March had valued Smurfit Kappa at €8.9bn (US$10.5bn), later changing the terms to allow shareholders of
S-based International Paper (IP) will not be making a hostile bid for Irish rival Smurfit
last year IP benefitted from a provisional net benefit of $1.2bn related to the enactment of US tax reforms.
Smurfit Kappa’s Tony Smurfit
the Ireland-based firm to receive a greater or lesser proportion of cash or shares.
It added that it would also seek
a secondary listing on the London Stock Exchange to enable Smurfit Kappa shareholders to share in the potential value created by a transaction. Smurfit Kappa has said that IP’s
latest proposal failed to value its intrinsic business worth and said it was very comfortable with the position it had outlined to its shareholders. First quarter 2018 sales at IP were $5.62bn, up 9.5 percent on the same period a year earlier, while net profit grew to $729m from $209m in the first three months of 2017. In the final quarter of
Paper recovery rate increase in Brazil
The recovery rate for paper in Brazil in 2017 was 66.2 percent, according to the Brazilian Tree Industry (Ibá). This is said to be the equivalent
of returning five million tons of paper to the production process, and makes paper one of the most recycled products in Brazil, and the world.
May/June 2018 The increase of this rate is in
line with efforts within the federal government’s National Solid Waste Policy (PNRS). Ibá says that in Brazil, 100 per
cent of paper production, including packaging, originates from planted trees, with a harvest cycle and annual planting in a renewable and sustainable process.
Mark Sutton, IP’s chief executive based in Memphis, Tennessee, commented: “International Paper delivered a solid first quarter and strong year-over-year earnings growth, as we continue to see healthy global demand and solid fundamentals across our global businesses. Operationally, we executed well in a heavy outage quarter and managed through weather related disruptions, distribution challenges and other unusual events. Our Ilim joint venture in Russia delivered record equity earnings. Looking forward, we are confident in our outlook of strong earnings growth in 2018.” In Smurfit Kappa’s trading update
for the first quarter of 2018 sales were €2.17bn, with earnings before taxes of €340m, giving an EBITDA margin of 15.7 per cent, an increase of 2.7 percentage points compared to the first quarter of 2017. SKG chief executive Tony Smurfit said: “Smurfit Kappa Group has again delivered a strong
Pulp Paper & Logistics
International Paper’s Mark Sutton
set of results with significant improvement across all key metrics. We have momentum in price recovery in our corrugated business, demand remains robust and paper markets remain tight. “Trading in the second quarter
remains very encouraging with good demand across most regions, continued corrugated price recovery and lower sequential recovered fibre costs. For the year, while recovered fibre pricing remains uncertain, we have strong momentum in the business and expect continued corrugated price recovery and execution of our medium-term plan, further enhancing SKG’s operating platform for sustained growth.”
Where the bio-economy and circularity meet
Paper & Beyond 2018 is the successor event to what has been known as European Paper Week. This year’s event will take place on 16 and 17 October to link with the EU policy agenda, rather than the third week in November. Based
on previous feedback the programme will be shorter with sessions running over one-and-a-half days including a networking dinner on the first evening. The event will take place in the Solvay Library, located at the Parc Léopold in Brussels.
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