According to PricewaterhouseCoopers (PwCs) quarterly net earnings summary for the period ending 30 June 2003, the depreciation of the US dollar against the euro contributed to the fall in earnings. The European companies were Stora Enso, Norske Skog, SCA, UPM-Kymmene, Ahlstrom, Jefferson Smurfit and Metslitto.

PwCs senior manager for global forest and paper products, Dave Thompson, said the situation would continue until there was a significant change in the exchange rate.

In North America there were signs of an improvement in the general economy, which would hopefully filter through to the European market by early 2004.

Profit margins continued to fall as European producers incurred costs in domestic currency and sold some production in US dollars.

The recent forest fires that swept across Europe and Canada (PrintWeek, 14 August) could also have an effect on wood chip supply for the pulp and paper industry.

Thompson said that in Canada some mills had been forced to take downtime and import chip supply, and this could be repeated in parts of Europe that were badly affected by the fires.

In the US, 10 of the largest public forest and paper companies, including Georgia-Pacific, International Paper, MeadWestvaco and Weyerhaeuser, reported a combined 33% increase in net earnings rise to 548m against the same period last year.