SPCI´99: Marcus Wallenberg: Shareholders urge for structural changes
During the inauguration of the fair SPCI´99 Marcus Wallenberg from Investor AB held a speech about the shareholders´ view of the pulp and paper business. He said that if the industry does not change fundamentally it will be difficult to attract future investors. Marcus Wallenberg presented the long run stock market underperformance, annual appreciation April 29,1994 - April 30, 1999: Forest Index: Market Index:USA: 14 % 24 %Canada: 0 10 %Finland: 22 % 30 %Sweden: 8 % 20 %Marcus Wallenberg mentioned following key reasons for low profitability:- Fragmented Industry- High Proportion of Fixed Costs- Overcapacity and Unclear Reasons Behind Capital ExpenditureThese above written conditions results in high volatility to underlying prices. What is then required from the shareholder´s perspective, according to Marcus Wallenberg?:- Future Consolidations- Sound Investment Policies- Rapid Adoption of New Technologies and Business Models- Increased Customer FocusMarcus Wallenberg said that the changes have already started, but there is a lot more to come.(Papernews, SPCI´99-news) (BMH)