Industry Risk Analysis

Published: 2020-05-15 01:46:03
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IBIS World makes no representation to any person with regard to the completeness or accuracy of the data or information contained herein, and it accepts no responsibility and disclaims all liability (save for liability which cannot be lawfully disclaimed) for loss or damage whatsoever suffered or incurred by any other person resulting from the use of, or reliance upon, the data or information contained herein. Copyright in this publication is owned by IBISWorld Inc. The publication is sold on the basis that the purchaser agrees not to copy the material contained within it for other than the purchasers own purposes.

Mill operators may manufacture their own pulp or purchase it from pulp mills. The primary activities of this industry are: • Manufacturing of paper rolls from pulp, including printing and writing paper, packaging paper and industrial paper. • Clay coating of manufactured paper. • Manufacturing of absorbent sanitary/tissue paper. • Manufacturing of newsprint. INDUSTRY RISK SCORE Forecast Period: December 31, 2010 Three types of risk are recognized in our analysis. These are: risk arising

In addition, the data illustrates that risk in the Manufacturing division (of which this industry is a member) is at a MEDIUM-HIGH level. As such, the level of forecast risk in the Paper Mills industry is higher than that of the US economy and that of the more specific Manufacturing division. Structural Risk Analysis Structural risk is forecast to be at a MEDIUM-HIGH level over the outlook period. The main structural risk factors for the industry are the fact that the industry is in a decline stage of its economic life cycle, medium level of competition, medium industry volatility and low government assistance.
Competition is medium as there are enough producers within the US Paper Milling industry to ensure that buyers of their products have a good deal of choice, and product quality and pricing is kept in check. Offsetting these high risk factors are high barriers to entry, a medium level of exports and a medium level of imports. Growth Risk Analysis Growth risk is forecast to be at a HIGH level over the outlook period. IBISWorld predicts that the industry revenue will contract by 3. 3% over 2010, which is an improvement compared to the average -6. 8% growth in 2008 and 2009. Sensitivity Risk Analysis
Sensitivity risk is forecast to be at a HIGH level over the outlook period. This is a similar level of risk compared to 2009. The industry is most sensitive to the downstream demand from converted paper product manufacturing, domestic price of printing and writing papers and business sentiment. Demand from converted paper product manufacturing is expected to improve slightly, also raising prices. This will be aided by rising business sentiment and in increase on expenditure such as advertising which increases the need for paper. The Trade Weighted Index will remain weak during 2010 which will decrease import competition.
Sensitivity risk will still be HIGH as many of these improvements will be small. [pic] Structural Risk The structural score for an industry is a weighted aggregation of structural dimension scores (SDS). These scores are functions of classifications representing quantity of or exposure to seven key indicators. |Structure Variable |Level |Trend |Score |Weight | |Barriers to Entry |high |steady |3 |13 | |Competition |medium | |5 |20 | |Industry Exports |medium |increasing |3 |.

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