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Weekly UpdatesA recent report from PricewaterhouseCoopers (PwC) has shown that North America stood tallest among global forest, paper and packaging deal values in 2007, with US $17 billion in 2007.
This total was part of the US $27.6 billion worth of deals seen globally in 2007, up US $1.9 billion over 2006 totals.
According to PwC's 2008 Branching Out report, the first quarter of 2008 has already seen deal values worth US $11.8 billion, though uncertainty remains about the outlook for the remainder of the year.
The weakness of the American dollar against other major currencies, such as the Canadian dollar and the Euro, have had a particularly notable impact on the industry, and the Canadian industry in particular.
Private equity has played a strong role in the industry in 2007, with nearly 38 per cent of deal values involving it in some form. In North America, private equity has played a key role in many deals, helping to grease the wheels of much of the consolidation and restructuring that has taken place across the continent in recent years.
The report identifies the potential of forests as a source of renewable energy and material sources as being likely to drive future deals, particularly with the advent of biofuels and value-added products.
Bio-energy also stood out in the industry, with global dealings reaching a total value of nearly US $7 billion in 2007.
North America stood out in this area as well with the highest concentration of deals, followed by Asia-Pacific and Latin America.
"The potential for wood-based energy and other new biomass-sourced products to significantly transform traditional fibre supply/value chains, and hence the current forest products industry, looks to be substantial," said Bruce McIntyre, Global Sustainability Leader for PwC's Forest, Paper & Packaging practice.
"Companies cannot afford to be complacent about their chances of competing in this emerging scenario, since the most promising positions will likely rest with these controlling significant volumes of forest biomass."
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