Georgia-Pacific (GP) President and CEO Jim Hannan’s two-year-old daughter often keeps him up at night. But once she falls asleep and his thoughts turn to running the world’s fifth largest containerboard producer, he tosses and turns over the speed of the sustainability movement currently gripping this country.

At last week’s Fibre Box Association Annual Meeting in Palm Desert, Calif., he was one of five top industry executives that participated in a panel discussion on industry issues, moderated by pollster John Zogby. All were asked what keeps them up at night.

“Let the market solve the problems, let the market price sustainability costs,” he says. “We’re in an environment that's accelerating beyond the science. People have to figure out the rules and regulations. We have to communicate on a fact-based manner or we will face political decisions.”

He then asked the 110 meeting attendees if they would be willing to pay 30 percent more for their electricity if it meant being sustainability-compliant.

“There has to be a middle ground,” he stresses. “Everything comes with a cost.”

Other industry issues that lead Hannan to experience restless nights include North America’s aging workforce and local rules and regulations on how to conduct your business.

“I worry about the U.S. becoming less competitive to do business in, especially on a state-by-state basis,” he says.

For John Faraci, chairman and ceo, International Paper (IP), and Steve Klinger, president and coo, Smurfit-Stone Container Corp. (SSCC), sleepless nights are caused by the constant war for talent throughout the world. In Shanghai, IP has hired 150 engineers, many of them for its packaging operations.

“We can compete with the Motorolas and GEs, we can hire talent,” Faraci says. “Our constraint will be people and nothing else.”

“Fifty percent of my time is spent interviewing people and understanding development plans,” Klinger states. “We need the right people in the right jobs.”

On the sustainability issue, Faraci says don’t be afraid of it, embrace it.

“We have everything to be proud of,” he states. “But we’ve done a lousy job of communicating it to the public and our customers. We thought we were going to be criticized so we remained silent. We have to criticize ourselves. We make a mistake if we try to compete in a way that doesn’t tell the story in an effective way.”

However, like Hannan, he stresses that sustainability achievements are complicated and aren’t cost-free.

Marc Andre Depin, president and ceo, Norampac, is concerned about where old corrugated container prices are headed and the future demand for corrugated products In general while Anthony Pratt, chairman and ceo, Pratt Industries, worries over reducing his company’s carbon footprint.

Stop Worrying—
The Canadian dollar has strengthened mightily over the past couple of years and now is at parity with the U.S. dollar. Montreal-headquartered Norampac’s Depin tells his employees to stop worrying about the Canadian dollar’s strength and just run the business.

His company doesn’t make equipment or box plant purchasing decisions based upon the strength or weakness of the Canadian dollar, he notes. What worries him are the cost structure differences between making a box in Canada versus making that same box in the U.S.

“We need to do more with less,” he says. “It’s getting there but it’s difficult.”

IP’s Faraci has been doing more by converting one of the company’s paper mills in Florida to a 23 lb lightweight linerboard maker. He wonders whether the sustainability movement will move the industry more rapidly into lightweight boards, which already prevail in other parts of the world.

“We have to think more about customer needs and whether we have appropriate values,” he states. “Don’t ignore linerboard but sell the advantages of the corrugated box.”

Avoiding the Landfill—
Pratt Industries’ Pratt believes that the U.S. still has recovered paper advantages, noting that a lot of waste still ends up in landfills. His company has been investing in material recovery and waste-to-energy facilities in the U.S. He says that one way to get more recovered paper out of landfills is to implement a fee system that would prohibit dumping over a certain set limit.

“The more [paper] waste we intercept from the landfill, the more we will have a positive carbon footprint,” he stresses.

When he was asked whether or not U.S. box makers needed the new recycled linerboard mill his company is building in Shreveport, La., he quickly stated that because of the Love Box Co. purchase two years ago his company was experiencing a linerboard shortage. So this new mill, which is scheduled to start late this year, will be for internal use and won’t lengthen his company’s exposure to the open market.

Speaking of linerboard, SSCC’s Klinger made it clear to the audience that his company won’t abandon the independent box maker.

“Independents shouldn’t worry about containerboard supply,” he says. “We’re long in whitetop, linerboard and medium. We’re committed to independents for a long time.”OBM

CALLOUT:
"We have to think more about customer needs and whether we have appropriate values. Don't ignore linerboard but sell the advantages of the corrugated box."--IP's Faraci