Expect more consolidation in the North American newsprint market as industry players try to deal with the impact of declining demand, says the new head of AbitibiBowater Inc.
"I would not be surprised to see more consolidation and I certainly hope that it's going to happen," new Abitibi chief executive officer Richard Garneau said on a post-restructuring conference call Friday.
"Maybe another round of consolidation could be required."
But he added that dwindling demand for newsprint in North America - spurred on by the shift to digital media - will be offset by increased consumption in emerging markets such as Asia and Latin America.
Montreal-based Abitibi, which recently emerged from a massive financial and operational restructuring under court-ordered bankruptcy protection, is well positioned to manage declining newsprint demand in North America as it moves to bolster exports to markets in Latin America and India as well as shifting production to higher value-added papers, said Mr. Garneau, an industry veteran who has just taken over as CEO from David Paterson.
"We can manage the decline in North America by focusing more on the overseas market," he said.
Even as newspaper publishers grapple with the fallout from the digital revolution and figure out the long-term impact - younger readers, for example, who are more comfortable getting their news off the web or social media - Mr. Garneau said he's confident that "print is not going to disappear."
He also said Abitibi is keen to buy newsprint and coated paper assets, but "only if the right opportunity arises."