Published - 2018/02/22
Amazon vs. Forest industry 1-0
On February 21st, 2000, I was moderating a panel discussion in Stockholm and the theme was: The IT society, a threat against printing paper?
Starting up the panel discussion, I reminded the audience that there was an Internet company traded on NASDAQ called Amazon that had 3,000 employees, negative profits, and a market cap of 8 billion US dollars. This was equivalent to the market cap of SCA, Stora, Enso, UPM and Holmen – COMBINED. Most people in the audience laughed and exclaimed that the world had gone crazy. Not so many are laughing today. Since then, Amazon’s stock price has soared by over 2100% and the market cap is now 700 billion US dollars. What about the named forest industry stocks? Well, they have risen too and are today valued at 60 billion US dollars. With Amazon´s market cap outperforming the selected basket of forest industry stocks 12-fold, we can conclude that at half-time it’s 1-0 to Amazon.
However, the game isn’t over until the referee blows the whistle. What will happen in the next 18 years? Today the forest industry is in much better shape than in 2000. Their business models are supported by mega trends such as increasing e-commerce, aging population, growing middle class, a world going non-plastic, etc. The industry is optimistic about the future, with many new ideas and innovations in the making. In the second half of the game my bet would be to go long in forestry and short in Amazon.
We see these trends; with all the new opportunities they offer for the forestry industry. And we’ll take an active role in this process of change. Because we help create value for companies around the world by transforming data and knowledge into strategic advice and efficient communication.