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Abstract

After the recession of early 1990s the major pulp and paper companies in Finland engaged in further consolidation and widened their earlier “European” investment orientation into “global” business strategies by mill acquisitions in North America and elsewhere. In the search for better profitability, the shareholder value paradigm was gaining strength as a business model. Profitability peaked in 2000, but then turned downwards as it largely did also globally. Product demand, prices and costs developed unfavourably. Global competition increased and problems of excess capacity became more severe, in particular in Europe. In Finland the strategies of belt tightening and leaning, ultimately called “survival strategies”, were adopted. The pace of mill closures, production breaks and personnel lay-offs, started in 2005 and has lasted until today. The paper discusses what went wrong and can be learnt, if anything, as the survival test seems to be passed, profitability of paper companies is improving, and shareholders are gradually gaining back what belongs to them.

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