Keynote Conference Speaker - Futurist: Packaging,Energy,Paper,Waste,Recycling,Sustainability

[00:00:00] I want to look today at your future, the future of pulp and paper, because these are challenging [00:00:08] times but they're interesting ones and there is a great opportunity. In summary, my message [00:00:14] is this: that paper and cardboard have, I believe, a fundamental, vital contribution [00:00:21] to a sustainable future. We need these products, we will be using them, they have a tremendous [00:00:27] amount to offer our future world, even though here in Europe there are great challenges. [00:00:34] And I'm going to look at four areas. I'm going to look at demographics, I'm going to look [00:00:38] at digital impact, I'm going to also look at distribution and our destiny. But first I want [00:00:45] to look at demographics, because we live in an extraordinary time. We live in a day when [00:00:50] one billion children are growing up. One billion people are under the age of 18 right now. [00:00:57] All of them will be part of our consumer world within the next 15, 16 or 17 years. And all [00:01:06] of them have parents. So we're dealing with three billion people, one billion children, two [00:01:13] billion parents, three billion people who are consumed with the sword of the next generation. [00:01:20] And it's that group of people that will drive the demand for paper and cardboard worldwide. [00:01:27] And when you think about the fact that the middle class is growing explosively and you add that [00:01:35] together, you begin to see the future. You begin to see the reason why so many things are [00:01:41] in short supply. It's the reason why, it's one of the many reasons why oil prices are high, [00:01:47] because rapidly growing populations in these poorest countries, which are becoming increasingly [00:01:56] wealthy. They are driving demand. It's the same with food supply. We have a situation where hundreds of [00:02:04] millions of people in the next five years will start to eat meat every day. And we know that if you just eat grain, that's one way of eating, but if you use the grain to feed an animal and then eat the animal, you drive a five or six times increase in the amount of grain that we need because animals produce so little meat for every kilogram of grain. [00:02:32] And at the same time, we see our world, in comparison, seems to be dying. You know, in Germany, if you live in Germany today, you need eight great-grandparents to produce a single great-grandchild. Extraordinary. Why? Because if the average couple only has one or 1.2 or 1.3 children, then your population will halve in every generation. [00:02:59] It's simple mathematics. You either have to make people or you have to import them. And Germany, France, Portugal, my country, Spain, Italy, and much of the rest of Europe have forgot how to make babies and we are having problems importing them psychologically. [00:03:19] So that is a challenge for the European Union. And we will see massive immigration. Where will it come from? Well, of course, it will come from some of these one billion people, all of whom I would love to spend, I'm sure, a little bit of time in a place like Sweden, working for a while, maybe. [00:03:38] So when you balance this massive growth in most of the world, in terms of economic growth, population growth, with the relative decline of our wealthy countries, you still end up with a small growth in paper and pulp, of course, around 2% per year. [00:03:57] And you can see the difference. This is China's growth, 7.5% per year in terms of pulp and paper. This is India, the U.S. and the world. [00:04:04] And when we think about the fact that in the U.S. an average citizen uses, like we do, around 300 kilograms of paper a year, and yet in Africa, you see only, in many African countries, only 1 kilogram of paper used. [00:04:16] You can see the opportunity for absolutely phenomenal paper and pulp growth. Look at India, even 4 kilograms, only 4 kilograms. Now, I know that's an average. But we have 1.3 billion people in India. [00:04:23] We already have a middle class of 1, 2, or 3, or 3, let's say, actually, more like 200.5 billion people in India. [00:04:30] We already have a middle class of 1, 2, or 3, let's say, actually, more like 200.5 billion people in India. [00:04:45] When the middle class becomes 400 million people, and you start to see India paper consumption in the middle class up near the American level, then you begin to see the future. [00:05:06] And in the meantime, we have other challenges too, especially with energy costs, and we can have a great debate about this massive energy spike and where it's going in the future. [00:05:17] All one could say is that with the energy prices as they are, I'll just go back to that slide, it's quite clear that this is looking more and more like a bubble. [00:05:26] Now, the fundamentals of the energy industry have not changed so dramatically since earlier in the 200s when we had an oil price of only $15 a barrel. Extraordinary to think that now. [00:05:39] And you can't tell me that the energy situation has deteriorated that dramatically in the last six months. [00:05:46] That would logically justify such a meteoric rise. [00:05:50] So, we will see all kinds of things happening to start bringing that price down over the next five or ten years from where it is now. [00:05:59] And partly because at this fantastically high level, just about every other form of energy saving starts to make sense. [00:06:06] And every person in Sweden, if they've not already installed geothermal heating for their own homes and hundreds of other innovations, [00:06:14] every person in this country and across the whole world will be looking at ways to save energy. [00:06:20] And of course, this applies to your industry as well. [00:06:23] So, let's come back to the future of newsprint. [00:06:27] And we are already seeing an invasion, as you know, which will continue of Russian newsprint, China newsprint and so on. [00:06:37] And at the same time, the newsprint industry in the United States, Australia, Canada, Japan, Sweden, France is suffering problems. [00:06:47] Because, well, it's not just the readership, it's advertising revenue. [00:06:51] And where is it going? It's going online. [00:06:54] If we look at the US newspaper revenues, they fell almost 10% in the last 18 months. [00:07:02] Online revenues have grown 19% during the same period. [00:07:07] But nevertheless, magazines are doing pretty well, as is another area which I'll come onto in a minute. [00:07:14] But that's not the whole story if we're looking at newsprint globally. [00:07:18] Just look at what is happening here in India. [00:07:21] Incredibly exciting. [00:07:23] 5,500 newspapers already. [00:07:26] 25 million new readers of newspapers in the last 24 months alone. [00:07:33] And it's just the start. [00:07:35] So we are seeing India move rapidly into a newspaper age and it will be a long, long time before we see India's newspaper market declining. [00:07:47] Now, that takes us onto the digital impact. [00:07:49] And many people talk to me. [00:07:51] They say, "You're a futurist. Surely you believe in the paperless office." [00:07:56] And I say, "Yes and no." [00:08:00] Because life is quite complicated. [00:08:02] You see, let's have a look at the realities of it. [00:08:05] You know, The Economist recently suggested, they suggested that the only product, the only paper product in future, [00:08:14] that might survive some kind of technological attack would be Kleenex paper. [00:08:20] The stuff you use to wipe your bottom in space or to blow your nose. [00:08:24] And they suggested that everything else, well, you know, we find some digital replacement. [00:08:29] I'm not so sure. [00:08:31] I'm sure you'll be relieved that I say that. [00:08:33] Because the future is not created by fantastical technological predictions. [00:08:39] The future, my friends, is controlled by another word, which I'll come to. [00:08:43] In fact, perhaps the most important word that will drive your future. [00:08:47] Perhaps. [00:08:48] It's certainly one of the most important words. [00:08:50] Let me tell you a story. [00:08:51] I was in New York the other day and I was staying in a hotel which had 4,322 stories and only one lift. [00:08:59] And, you know, I arrived there I was at the lift and there was a crowd, it could have been you, [00:09:03] and we were all standing there looking at our watches. [00:09:06] I was late, I confess. [00:09:08] I had five minutes to get down, connect the computer, get onto the stage. [00:09:12] Not quite that bad. [00:09:13] I was stressed. [00:09:15] Now, at that moment we were all standing there, the lift button is lit. [00:09:20] I'm 4,000 stories up. [00:09:22] I was tempted at that moment to do something totally crazy. [00:09:29] I was actually tempted, for a moment, to press the lift button more than once. [00:09:37] Now, confession time. [00:09:39] Yes, let me ask you too. [00:09:40] Put your hands up. [00:09:41] I'm not saying you would do such a crazy thing, but from time to time you have been tempted, [00:09:48] in an irrational moment, to actually touch that lift button again. [00:09:53] Put your hands up if you've actually done that. [00:09:56] Okay, you've actually done it. [00:09:57] Yes, well you see, like me. [00:09:58] Now, we talked about astronauts just now. [00:10:01] You see, I have one question I want to ask the astronauts. [00:10:05] You see, I was - I'm going to ask you - I was talking to 850 airline pilots. [00:10:11] By the way, I mean, what was I doing? [00:10:12] What was I thinking of when I pressed that lift button more than once? [00:10:17] Can I control a lift more than Bill Gates himself? [00:10:20] Of course not. [00:10:21] I was totally irrational. [00:10:23] But yet, I was talking to 850 airline pilots. [00:10:27] I asked them this question. [00:10:28] Put your hands up if you talk to the lift. [00:10:34] Come on, baby. [00:10:35] It's time to come. [00:10:37] They all put their hands up. [00:10:39] Let me ask you a question. [00:10:40] I don't know what the answer will be, because astronauts are very strange people. [00:10:46] But, let me tell you, let me ask you a question. [00:10:49] Did you - do you remember at any time during your 14 days in space, anyone talking to a [00:10:56] piece of equipment? [00:10:57] Most likely, yes. [00:10:59] There we are. [00:11:00] Crazy. [00:11:01] Now, listen, I just want you to remember one thing. [00:11:05] When we are under pressure, we can all behave totally irrationally. [00:11:13] And, my friends, if you look at the future of oil price right now, if you look at the sub-prime [00:11:18] crisis, if you look at the reaction there was to the SARS outbreak, which only killed 862 [00:11:24] people, you find irrational forces at work. [00:11:28] And, in the future of the paper and the pulp industry, even though there are big issues like [00:11:35] demographics, energy costs and the rest, there are, I suggest, some very powerful irrational [00:11:41] forces, emotional forces that will drive the future. [00:11:45] And, the future will be influenced by these emotions. [00:11:48] And, what are they? [00:11:49] Well, just to say, that's why we need to be careful about market research. [00:11:54] Market research will tell you the future for the next few days. [00:11:58] But, it doesn't always give you the right answer about the use of paper packaging for the [00:12:03] next decade, or the use of books, or the readership of magazines. [00:12:07] Why? [00:12:08] Because emotions change faster than people think. [00:12:12] And, people have an emotional reaction to paper. [00:12:16] That is one of the reasons why paper has survived in the paperless office. [00:12:22] And, I'll come back to that. [00:12:24] You know, people have an emotional reaction to a piece of paper that they have written on. [00:12:29] It becomes part of them in a different way than a piece of computer code on the screen. [00:12:34] Yellow Pages, yes, they're under pressure from Google Maps. [00:12:37] Yes, Direct Mail is under pressure from email distribution and the rest. [00:12:43] Yes, it's true that paper letters look like the last century. [00:12:47] But, there are surprises here. [00:12:49] Look how well books are doing. [00:12:52] I'm a great believer in books. [00:12:53] I have written 12 of them. [00:12:55] In fact, books have grown as a market by 2.5% in the US over the last few years. [00:13:02] Per year. [00:13:03] Why? [00:13:04] Well, one of the reasons is because people are emotionally connected with a book. [00:13:09] They pick up a book. [00:13:10] They hold it in their hands. [00:13:12] They smell it. [00:13:13] They write in it. [00:13:14] It becomes part of them. [00:13:16] They keep the book. [00:13:17] They put it on the shelf. [00:13:18] If you want to burn a book. [00:13:20] If you want to make a headline in the national media. [00:13:23] Go to the market. [00:13:24] It's one of the markets where they sell vegetables in Stockholm. [00:13:29] With some books. [00:13:30] By a poet. [00:13:31] A particular poet. [00:13:32] Or by a particular novelist. [00:13:35] And go and burn them in a public place. [00:13:38] I guarantee CNN will be there. [00:13:40] Why? [00:13:41] Because it is such an emotional thing. [00:13:44] Tell me. [00:13:45] Would CNN be there if they burnt some newspapers? [00:13:49] No. [00:13:50] Magazines by the same writer? [00:13:52] No. [00:13:53] Book? [00:13:54] Yes. [00:13:55] There is something almost spiritual about a book. [00:13:58] Remember. [00:13:59] Emotion. [00:14:00] And books. [00:14:01] Talking of books. [00:14:02] Even books. [00:14:03] Are under pressures too. [00:14:05] When the English editions of Harry Potter were brought out. [00:14:08] It was a big campaign that they had saved nearly 200,000 trees. [00:14:13] Because of the way that the books were made. [00:14:15] But let me just come back to something to do with medicine. [00:14:19] You see there is something very important about paper. [00:14:22] It's not just the emotional connection. [00:14:24] It's a biological connection. [00:14:26] Let me explain. [00:14:27] Your eye can process 3,000 terabits of data every second. [00:14:35] Your ears only about 112,000 bits of data. [00:14:40] If I speak faster than 100 words per minute. [00:14:45] My words disappear into chaos. [00:14:48] But you can read a newspaper at around 3,000 words or 10,000 words per minute. [00:14:57] You don't read every word. [00:14:58] You just stand and you turn the pages. [00:15:01] And you know what is in it. [00:15:02] You know what is not in it. [00:15:04] You cannot possibly process that amount of data on a screen like this one. [00:15:14] Which is only 1024 pixels that way by 768. [00:15:17] Or even on a high resolution screen. [00:15:19] There is not enough visual data coming into your brain from the screen. [00:15:25] And that my friends is why reading a newspaper online is such a crazy waste of time. [00:15:32] And you know my friends. [00:15:34] If you have a huge report sent by email. [00:15:37] There is only one sensible way to read it from the point of view of your time and energy. [00:15:43] Which is sadly for the environment. [00:15:46] Good for you. [00:15:47] Which is to print it all out. [00:15:49] And scan it. [00:15:51] Skim it through. [00:15:52] And bin it back again. [00:15:54] Now it may not be very sound from the environmental point of view. [00:15:58] But from your brain point of view. [00:16:00] It is the quickest way to get that data in. [00:16:04] And that my friends. [00:16:05] Is the reason why color brochures. [00:16:08] Direct mailed. [00:16:09] Will win. [00:16:10] Continue to win. [00:16:11] When they are well done. [00:16:13] It is the reason why a book is such a pleasure to hold. [00:16:16] It is the reason why for serious readers. [00:16:19] Like me. [00:16:20] Who have to read the equivalent of three books. [00:16:23] Every morning. [00:16:24] Of national papers. [00:16:26] I have to read that every day. [00:16:28] To keep abreast of the future. [00:16:31] For me I have to do it on paper. [00:16:33] If they stop printing newspapers. [00:16:35] I will have to print them at home. [00:16:37] And I will print them on the largest sheets I can find. [00:16:40] Because my time really really matters. [00:16:44] Now what about distribution and packaging. [00:16:47] And then I am going to say something about our destiny. [00:16:49] Yes we can talk about Walmart. [00:16:51] We can talk about just about any way of moving goods. [00:16:56] I have to say this. [00:16:57] Plastics are nowhere in this business. [00:17:00] Paper will always win. [00:17:01] Why? [00:17:02] It is convenient. [00:17:03] You can recycle it. [00:17:05] It is strong. [00:17:06] It is very light. [00:17:07] And it is a sustainable thing. [00:17:09] And with increasing worries about black stuff. [00:17:12] And where you get it out of the ground. [00:17:14] And wasting carbon. [00:17:16] Then I think the paper product will continue to do really well. [00:17:20] Yes we will hear a lot more about disposable cartons. [00:17:24] We will hear a lot more about intelligent cartons. [00:17:27] And you know that RFID technology will be in every one of your products in the future. [00:17:33] Because it costs so little. [00:17:35] And not just in the cartons but on paper as well. [00:17:40] The wonderful technology which allows us to print the aerials. [00:17:45] The aerials you need around radio frequency identification devices can be inserted by you with ink. [00:17:52] You just print the magnetic ink onto the strip and make sure it connects with the chip itself. [00:17:59] And straight away you have intelligent paper. [00:18:02] You can build it into every single one of your processes. [00:18:05] And we can do it for almost zero cost in the future. [00:18:08] We are already seeing 10 billion RFIDs released into the environment every year. [00:18:15] Each of them has a life expectancy of up to 100 years. [00:18:20] They store data. [00:18:22] They can read and write. [00:18:24] They talk to other RFID chips. [00:18:27] They can communicate from one to two meters away. [00:18:31] They need no power. [00:18:33] They need no battery. [00:18:34] Because they are powered by the electromagnetic waves in the room itself. [00:18:39] So every carton is tagged. [00:18:41] It means a reduction of up to 70% of theft. [00:18:45] A saving in warehouses of 70 to 80%. [00:18:49] It means that for the first time we have a mechanism to actually see on the screen [00:18:55] every single package everywhere in the world in real time. [00:19:00] It is the technology the internet has been waiting for. [00:19:03] Every one of my IT clients in distribution, logistics, wholesale and retail and manufacturing [00:19:09] have been waiting for the moment when they can actually prove online on a screen [00:19:15] the location within one meter on the surface of the earth of every product [00:19:19] and watch it going out of the store in your bag. [00:19:23] And it is a complete revolution and it will help to change our destiny. [00:19:27] Talking of destiny. [00:19:28] Yes I mean the radical future. [00:19:30] But I am not talking about odd things like the cardboard houses or cardboard furniture. [00:19:35] I am really talking about the environment. [00:19:39] And we have already heard about it. [00:19:40] And you will hear a lot more about it over the next two or three days. [00:19:43] And remember the future is not about science. [00:19:46] It is about, what is the most important word? [00:19:50] Emotion. [00:19:51] I don't care what you think about the science. [00:19:54] I happen to think the science is more or less proven [00:19:57] that this is a very serious issue that we should respond to. [00:20:01] But even if I am wrong, even if we are all wrong, [00:20:04] the future will be driven by an emotional reaction to this graph. [00:20:08] And it is growing. [00:20:10] And you can expect at least a 10 or 20 times the passion attached to global warming issues [00:20:17] in the media, in your own homes, in your children, in your grandchildren, in your cousins, [00:20:25] your nephews and nieces, in your neighbours, in politicians. [00:20:29] You will see this passion grow. [00:20:31] Three years ago, you could hardly find a head of state of any nation [00:20:36] that was talking each week about climate change. [00:20:40] But today, you can hardly find a head of state that isn't talking about climate change on a regular basis. [00:20:50] Every one of the new presidential candidates for the United States election are talking about new policies for America on climate change. [00:21:03] Even America is coming into line on this issue. [00:21:07] And as our anxiety is growing about our ability to destroy the planet, maybe, and destroy our future, [00:21:17] we are also becoming more anxious about every other part of the environment. [00:21:22] And so we see a change from plastic packaging to paper packaging. [00:21:27] Good news for you. [00:21:29] We see a change from plastic bottles to paper bottles. [00:21:33] Good news for you. [00:21:35] And I have to say, marvellous, actually, for storage too, [00:21:38] because paper is so much more efficient on the shelf. [00:21:42] When you think of how much wasted space there is in a crate of round bottles, [00:21:48] when you've got a tetrapec carton like this, a paper brick, [00:21:51] then you're getting a massive increase in density of product per metre, which is great news. [00:21:58] The difficulty, of course, is recycling some of this stuff because you have plastics, [00:22:03] a little bit of plastic in there, you have a little bit of aluminium foil, [00:22:07] and you have a lot of cardboard, so it does need a special facility, but it can be done. [00:22:12] And you see just about every area of the packaging industry is trying to reshape its products [00:22:18] to save an extra millimetre here and there. [00:22:22] And many of my clients are doing these things. [00:22:24] You know this is happening, but paper, paper, paper, cardboard, cardboard, cardboard is coming back. [00:22:29] And you just have to look at what's happening with paper bags. [00:22:34] In my country, it will soon be illegal, I think, to give away a plastic bag to a shopper without charging them for it. [00:22:43] In India, in Delhi, they banned plastic bags some time ago because they regard them as a national nuisance. [00:22:50] Good news for paper. [00:22:52] So, yes, you're seeing all kinds of thoughts about forests as well and the tree huggers and so on. [00:23:00] But forests are turning out to be the world's greatest friend. [00:23:03] And as we are starting to focus on less weight paper products, more eco-friendly paper, [00:23:09] and even 100% recycled papers that are as good quality as the rest, and I'm sure we will get there, [00:23:16] even as we focus about new ways to reduce energy, to radically improve our paper pulp processes, [00:23:23] even with all of that, I think we will find this: [00:23:27] that the wood industry itself moves more and more from being a supplier of paper to a deliverer of power. [00:23:36] And that, I think, will turn out to be the wood industry's greatest future potential. [00:23:41] Because if we do get much more efficient at recycling, [00:23:45] if we do get ourselves to a place where we can produce some of the best papers in the world, [00:23:50] using almost 100% recycled product, [00:23:53] then we will need, and the same with cardboard, by the way, [00:23:56] then we will need less and less of your forests every year in order to regenerate that pool. [00:24:01] And that will release a huge potential, as I say, for power. [00:24:07] And that raises a final issue, which is offsetting. [00:24:12] Already, we are seeing papers that are fully offset. [00:24:15] What do I mean by that? [00:24:17] What I mean is this: paper manufacturers are working out their total energy consumption, [00:24:23] and then they are going and buying a credit on the energy market. [00:24:27] And they're saying: [00:24:28] Okay, we will pay for some scheme in... [00:24:33] I don't know, let's say... [00:24:35] Actually, I'll give you a good example. [00:24:37] We will pay for a wood chip furnace in the northern part of Sweden, [00:24:44] which is burning... [00:24:45] In a school that was burning oil. [00:24:47] It used to burn oil. [00:24:48] And they can't afford a new boiler to burn wood chips, [00:24:51] but we have hundreds of tons of free wood chips here in the timber yard here. [00:24:57] And they can have them for very little. [00:25:00] And we will put in, as a paper company, we will put in a new wood chip boiler into that school. [00:25:07] And they're going to contribute 60% of the cost. [00:25:10] And we'll contribute 40%. [00:25:12] And that makes it commercially viable for them. [00:25:14] And they will pay a certain amount for the wood chip. [00:25:17] And the wood chip will grow. [00:25:19] As a result of this, in this school we know that we will save, let's say, 100 tons of carbon every year. [00:25:25] That carbon that has been saved is a direct result of our gift of 40% subsidy to pay for that boiler. [00:25:33] And that gives us, as a company, 100 tons of carbon as a credit, [00:25:38] which we can use to balance 100 tons of carbon that we used to make paper this year. [00:25:44] That is a genuine offset. [00:25:46] You control it yourself. [00:25:48] It's provable. [00:25:49] It wouldn't have happened anyway. [00:25:50] The school would never have converted without your help. [00:25:52] And you can use it to balance these things. [00:25:55] And so in conclusion, we'll see a lot more of that kind of thing. [00:25:59] Why? [00:26:00] Because the slogan of future for paper and carbon will be that we make life easy. [00:26:06] But we do it in a great way. [00:26:08] We do it for you. [00:26:09] And a way that's convenient for you. [00:26:11] We do it in ways that assist you and your family and those that you care for. [00:26:15] We do it in a way which is good for our community, our local community. [00:26:20] And it's good for our earth, for the future of the earth. [00:26:23] Everything we do, we do carefully. [00:26:25] We reduce our toxic waste. [00:26:27] We've reduced our energy consumption. [00:26:29] We produce wonderful products with almost 100% recycling. [00:26:34] We are extraordinarily conscious of environment and sustainable forestry and all of that. [00:26:42] And we make sure that in every possible way, we minimize the distances that we send product around the world. [00:26:48] And we do these things because we believe in a future which is a sustainable one. [00:26:53] It's a protected one. [00:26:54] And one that will be worth living in. [00:26:56] And that is why I believe that pulp and paper have this tremendous future. [00:26:59] Even though the competitive pressures here in Europe with some issues of over production and so on. [00:27:06] And will continue to be there. [00:27:08] Even though the pressure will continue to be on for innovation. [00:27:11] For creativity. [00:27:12] For cutting costs. [00:27:13] For being incredibly energetic in our marketing and sales. [00:27:17] For developing new products. [00:27:19] For ever higher quality papers using less resources. [00:27:23] Yes, even with all of those things, I do believe that cardboard and paper are here to stay. [00:27:28] They will drive part of our sustainable future. [00:27:30] And worldwide, this is a very, very important industry. [00:27:34] Thank you very much.