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2002 Environmental Conference: CEOs demand consolidation in organizations

Organizations within the pulp and paper industry should team up for more productivity, said the three CEOs at the 2002 International Environmental Conference’s CEO Panel last April.

“There are too many organizations in North America, there are lots of duplications,” said Frank Dottori, President and CEO of Tembec Inc. “There should be just one North American organization that has representatives from the Eastern and Western sector.”

His views are supported by fellow CEOs John Weaver, Abitibi-Consolidated Inc., and Jerome Tatar, Mead Corporation. The three of them agreed that at hard times like this, when the industry is experiencing some difficulties, consolidation is the key.

“We have a lot of overlaps,” said Weaver. “More conferences must be framed on a ‘North-American context’ since (they focus on) Canada and U.S.A. anyway.” He explained that for companies looking to cut costs, the idea of sending employees to several conferences within a short span of time is just impractical.

“Do I send one guy from every department at several conferences? Or will one employee at one conference be enough?” asked Weaver.

Tatar said elimination and duplication is absolutely critical in this industry.

“We should set up a ‘task force’ to take care of consolidations of organizations as well,” he joked.

Dottori said consolidation is the industry’s way of keeping at par with other industries. He sees not only organizations merging in the future, but more companies as well.

“Consolidations will continue because the main motivation is to make money,” said the former chair of the Canadian Pulp and Paper Association (CPPA). “We have to look where the opportunities are — to succeed, you have to keep on growing.”

Weaver explained that there is one major reason why North America is going through consolidation: It is cheaper to buy than to build. By consolidation, North America can compete with its European counterpart.

“It is a global competition, and we’ll find ways in North America to compete.”