Raincloud or silver lining?
Black swans and grey rhinos have been on my mind since I returned from Shanghai Pulp Week during my first visit to China since the pandemic. Black swans are unpredictable events with high impact while grey rhinos are also high-impact events but ones we should or could have seen coming. Both were key topics of conversation inside and outside the conference venue, often with an increasingly youthful, English-speaking cohort of Chinese lead buyers.
Since Covid-19, we have faced a flock of black swans: Russia’s invasion of Ukraine, subsequent spiralling energy and input costs, conflict in the Middle East, the disruption of supply chains by attacks on shipping taking the Suez Canal route, not to mention accelerating climate-induced events globally. Perhaps they were actually grey rhinos and more predictable than we care to admit.
At Södra we are fortunate that we can mitigate some of the effects of global events and shifts, predictable and otherwise. For example, we have never relied much on imports of Russian wood because we control our supply chain via our members’ forests. However, we are exposed to the stronger competition for wood in southern Sweden which has led to a steady increase in wood prices and so we have to pay higher prices to our members.
Strikes in neighbouring countries have become something of a predictable event so I would argue they are more rhino than swan. Other grey rhinos thundering our way in Europe might include the mounting tide of legislation, not least the EUDR and the PPWD which we are preparing for at numerous levels. Might the inexorable rise of AI prove to be a headache or a tool to tame the rhinos? Could AI help us plan for and predict the unknown with greater accuracy or might it bring new threats we have not yet understood?
As always, one person’s raincloud can be another’s silver lining. We know, for example, that the current reality of pulp shipments avoiding the Suez Canal route is a factor in tightening the pulp market. But we also know that the market can turn just as quickly against us, and we never take the present as a template for the future. We hope that by working with customers whatever the present conditions, we can help smooth out the bumps in the road ahead for us all. Our SMI 2.0 tool is a good example of working together for better control stock management and value chain efficiency.
All we can do is expect and prepare for the unexpected and keep working together in the hope of a more peaceful, predictable future. But I’m not holding my breath.
Henrik Wettergren
Vice President Södra Cell International
Vice President Södra Cell International Phone: +46 470 894 52
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