WELCOME TO CANADA BIENVENUE AU CANADA Serge Desgagns Agenda 1 2 - - PowerPoint PPT Presentation

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WELCOME TO CANADA BIENVENUE AU CANADA Serge Desgagns Agenda 1 2 - - PowerPoint PPT Presentation

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WELCOME TO CANADA BIENVENUE AU CANADA Serge Desgagns Agenda 1 2 4 5 3 Key takeaways Introduction Value creation Canadian market The next generation Introduction Industry structure Criteria In Canada Conclusion 2 Canadian market

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WELCOME TO CANADA BIENVENUE AU CANADA

Serge Desgagnés

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Introduction Introduction 1 In Canada The next generation 3 Industry structure Value creation 4 Conclusion Key takeaways 5 Criteria Canadian market 2

Agenda

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Population Trade balance GDP Currency Natural resources

Canadian market

Cr Criteri ria

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Population

Last 10 years + 10.6% vs World + 25.15% 2.29 % of the World GDP 3.4 People/ km2 vs World 49 People/Km2 Population of 36 million ( 38th in the world ) 0.48% of the World 4

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Canadian GDP

  • GDP 1.472 trillion

USD

  • 10th in the World
  • (2005-2015) + 35%

vs World at + 45%

  • 20th for GDP per

capita

1.5 1.6 1.7 1.8 1.9 2010 2011 2012 2013 2014

GDP evolution

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Trade Balance

  • Negative trade

balance of $22 billion in 2015

  • Positive trade

balance of $62 billion in 2005

  • Still positive with

USA at $34 billion in 2015

2010 2011 2012 2013 2014 2015 Series1 -9.703 0.5675 -13.289-6.5618 4.791 -22.46

  • 9.703

0.5675

  • 13.2889
  • 6.5618

4.791

  • 22.46

In USD

Balance of payments 6

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In 2013 Canadian forest is 1.25% of GDP Revenue of 19,8 billion CAD 9% of world forest

Forest industry in Canada

348 million hectares of forest Forests are 45% of Canada’s surface

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2nd nd

Uranium Forest Water

Natural resources production

Oil

5t 5th 3rd

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Currency history

0.2 0.4 0.6 0.8 1 1.2 2010 2011 2012 2013 2014 2015

CAD currency to USD

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Canadian box shipments

27 27.5 28 28.5 29 29.5 30 30.5 31 31.5 2010 2011 2012 2013 2014 2015 2016e Million square meter

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Million Square Feet

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Canadian box market

  • 1. Canadian box shipments (2013-2015)
  • +5.2%
  • 2. US box shipments (2013-2015)
  • + 2.4%
  • 3. Increased box shipments to USA due to low

Canadian dollar

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Containerboard Mills in Canada

  • 1. 5 Companies
  • 2. 11 mills with capacity of 2.186

million tons per year

  • 3. 11 machines with average trim of

171 inches

  • 4. 7 recycled machines
  • 5. 3 semi-chem medium machines
  • 6. 1 Virgin Kraft white top machine

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5 Integrated companies 85% integration 53 corrugators 12 Independents 20 containerboard machines 3.274 million tons

2003 2011 2016

6 Integrated companies 113% integration 45 corrugators 10 independents 13 containerboard machines 2.172 million tons

Containerboard Market Evolution

5 Integrated companies 99% integration 39 corrugators 7 independents 11 containerboard machines 2.186 million tons

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Containerboard industry changes since 2011

2011 2012 2013

Cascades Containerboard shutdown Burnaby, BC WestRock shutdown Matane , QC mill Minas Basin shutdown Hantsport, NS Atlantic Packaging converted a recycled newsprint machine to containerboard in Whitby, ON 14

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People ENTREPRENEURSHIP

Is the greatest characteristic of the leaders of the Canadian containerboard industry

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Change of mentality Access to new technology Sustainability

The next generation of recycled linerboard

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What is needed to achieve the goal ?

End user

What is the end user looking for? To produce at lowest cost while maintaining the quality to perform.

Box manufacturer To find a substrate which can optimize the performance of the box through a new concept called Rightweighting.

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What is Rightweighting?

It’s about continued Fiber reduction not less strength. Takes new technology to deliver improved production options.

It’s about forward thinking to create new linerboard grades for a proliferation of newer flute types

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It’s about meeting the need for smart alternatives for developing packaging for e-commerce, retail and shelf ready packaging and for design cartons. It’s about monitoring additional physical properties of linerboard. Corrugated technology, zero crush converting and digital imaging have been waiting for advanced containerboard products to fill the need for right weight packaging.

What is Rightweighting ?

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Rightweighting, its origin

  • 1. Started in 2000’s, European containerboard

producers decided to invest in new technology to produce lightweight

  • linerboard. Over 30 new machines were built

in Europe since.

  • 2. Unfortunately the North America

containerboard industry did not follow the trend and very few investments were made to adapt paper machines to offer lightweight containerboard grades.

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Easy to understand

  • 1. North America has 143 containerboard

machines.

  • 2. Median age 41 year old.
  • 3. Median technology age 19 year old.

Why would they push for lightweight ?

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You Snooze,You Lose

  • 1. Cars ( Performance )
  • 2. Web shopping ( time saver )
  • 3. Newspapers ( Video and direct access )
  • 4. Depot stores ( Lower prices )
  • 5. Lightweighting ( Packaging optimization )

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Canadian producers take the lead

3 of the last 5 containerboard projects were from Canadian producers.

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What is that new technology?

The new generation of linerboard paper machines are designed to build compressive strength to obtain the highest STFI (SCT) per basis weight.

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Building compressive strength Furnish Former Pressing Starch Drying Calendar Scanning

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Building compressive strength

Furnish High quality OCC Refining degree Fines content

Fiber fractionation

Pulp analyzer 26

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Building compressive strength

Former

Fourdrinier

  • r gap

former Maximize fiber squareness Dilution head box

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Building compressive strength

Pressing

Densification

Shoe press

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Starch

Size press (add starch to the sheet to increase the strength) A unique tool to increase strength up to 35% more ECT.

Building compressive strength

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Drying

New technology assures low shrinkage, (dimensional stability)

Building compressive strength

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Calendar

Improve smoothness for better printability

Building compressive strength

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Scanning

Improve scanning technology

More accurate autoline testing

Building compressive strength

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Box producer benefits

Board combination today for 25 ECT: North America Europe

26/23/26 20/23/20 19% of savings for Europe

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Fiber reduction

Linerboard Medium North America 31/35 lbs 33 lbs Europe 20.5 lbs 18 lbs

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New market opportunities

New market

Folding boxboard (micro flutes)

Retail ready packaging (forecasted increase 5.2% annually)

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  • 1. New capacity and technology towards

lightweight

  • 2. Rightweighting is here
  • 3. Basis weight is no longer an indicator of

strength

  • 4. Finally available in North America, driven by

Canadian entrepreneurs.

Key takeaways

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THANK YOU!

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References

  • http://www.statcan.gc.ca/start-debut-fra.html
  • http://www.canadianforex.ca/forex-tools/historical-

rate-tools/yearly-average-rates

  • https://www.nrcan.gc.ca/forests/report/area/17601
  • http://www.nrcan.gc.ca/publications/key-

facts/16013