I have been doing some research for a paper to be presented at a private client conference, so I will be a bit circumspect here, but the bottom line is this--pulp and paper companies will have no choice but to become larger.

This is not driven by demand, but by necessary economies of scale. Consumer and regulatory demand is adding costs to the business and those costs need to be spread over more MSF or tonnes, however you measure your output (I deliberately mixed English and Metric systems).

To achieve these economies of scale in slow growing or stagnant markets, there is only one set of choices: mergers and/or acquisitions.

However, this may not be the only choice for tissue producers; their businesses grow with population growth, and they may have room to build these upcoming costs into their business.

Packaging, containerboard and market pulp players may not have much choice other than the M & A route.

Hence, some may already be in the stages of advanced thinking on this. This brings to mind Smurfit Kappa/WestRock and International Paper/DS Smith/Suzano (however that may work out).

More later, but the last of the smaller companies are likely on their way out.

Jim Thompson is CEO of Paperitalo Publications.