These were just some of the findings to emerge from PricewaterhouseCoopers' (PwC's) 17th Annual Global Forest and Paper Industry Conference held in Vancouver.
"The biggest single impact on the global industry in 2003 was the dramatic increase in the value of the euro and the Canadian dollar against the US dollar," said PwC global forest and paper group partner, Craig Campbell.
If this trend were to continue, Campbell said the impact in the European industry would be far more widespread.
This would be due to the introduction of timber-producing countries such as Estonia, Latvia and Lithuania, who all enter the European Union in May.
European producers suffered from a dramatic hike in the euro, which increased 20% on average against US currency in 2003, and 6% on average in 2002.
Like their Canadian counterparts, Campbell said the rise in the value of the euro positioned European producers at a disadvantage to those in the US. This is because the global forest products industry prices its products in US dollars.
Despite this, Campbell said one sign of possible recovery in the industry was the increase in the total net earnings of the world's 100 largest publicly-traded forest and paper product companies. Net earnings increased 24% on 2002 to an estimated 3.4bn ($6.1bn) in 2003.
"Forest and paper products companies are operating in a global marketplace. Survival in the industry depends on being a low-cost producer," warned Campbell.
Story by Andy Scott
