The North American forest and paper industry improved in 2013, says PwC.
Compared to 2012, it adds, total 2013 revenues for nine of the largest U.S. forest products companies increased by 4.8%. In Western and Eastern Canada, producers saw year-over-year improvement of 16% and 6.3%, respectively.
Read: Forestry sector growing
Also, the total value of U.S. M&A deals rose from US$4.8 billion in 2012 to US$10.4 billion in 2013—even though there were fewer deals closed last year.
Companies benefited from “the availability of debt at low rates, strategic acquisitions to secure fibre supply, and the increase in demand for wood products in the U.S. housing sector and in Asia,” says Jason Boyer, a vice president in PwC’s deals practice.
He predicts, “There will be more large deals in 2014.”
Still, most forest products companies in other parts of the world are underperforming. For example, the revenues of Japanese forest products companies were down by 6.9% in 2013, and net earnings dropped in Europe.
In the next few years, the following four global trends will transform businesses.
- Technological advances.
- Rising urbanization rates.
- Resource scarcity, coupled with climate change and the need to minimize the environmental footprint of companies. For more, read: How to play resource scarcity.
- Growth in the emerging markets.