Industry transformation through innovation will be a long process, and we’re not there yet. This was the message from the pulp and paper industry leaders assembled for a panel discussion that kicked off the PaperWeek Canada conference and trade show earlier this week.
David Lindsay, president and CEO of FPAC, described the challenges facing the forest products industry as the business phenomenon of “creative disruption.” He noted that much the planning and mapping work toward transformation is complete, and that we have alignment of the innovation system in Canada. The Biopathways reports developed by FPAC was cited as an example of the planning stage. Now, “we’re changing the business models, and each individual company has to figure out its path.”
“We are on the journey. We’re just not there yet,” said Lindsay.
Glenn Mason, assistant deputy minister, Natural Resources Canada, reminded participants of the “epochal” events of 2008 – currency appreciation, the global recession, the U.S. housing collapse, the U.S. black liquor credit – that led to more than 150 mill closures in the forest products and pulp and paper sectors. The industry has slowly recovered, with the federal government contributing the $1-billion Green Transformation program, market diversification initiatives, and funding assistance for innovation through the IFIT program.
The positive response to IFIT shows that the pulp and paper industry has “lots of intent and desire” for transformation, Mason commented.
Lindsay noted that the industry needs to change its mindset from producing bulk commodity products to a stronger customer focus for producing niche products. At the same time, he cautioned that companies must remain competitive and make sure the fundamentals of the business don’t slip.
Lindsay described the current growth in wood pellets and green electricity as “a life-saving step” in the journey to transformation, one that is propping up the industry while demand for other products is soft.
PaperWeek Canada runs from Feb. 2 to 5 in Montreal. It is organized by the pulp and paper industry association PAPTAC.