Our special focus this week is on Paper and Forest Products. We spoke with Analyst Don Roberts of CIBC World Markets, and he calls the current changes going on in paper “the biggest we have seen since the end of the Colonial era”.
One of these changes he cites in the emergence of the Russian Forest Sector:
Mr. Roberts: Russia has been a sleeping giant. In the short term, they are probably going to pull back out of the market as they implement their dramatic export tax on logs. However, the government has publicly stated that it is targeting to have over $50 billion invested in the sector between now and 2020. Now, a lot of that will have to go to infrastructure and a lot of central governments put out targets that are never met. However, they have a guy in the driver’s seat in Moscow who is relatively serious. We may not agree with how he’s doing things, but bear in mind that at the end of the day Russia has more standing timber than Canada and Brazil combined. Despite that tremendous resource, Russia ran a trade deficit in paper and forest products last year. I don’t think that that is going to last.So we are in the midst of some big-picture changes.
For the full roundtable discussion on Paper, including an overview of potential problem areas, and stock picks, click here.
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