Norske Skog, the world's second biggest newsprint paper producer, is still waiting for the long expected upturn in demand and European prices remain flat, the Norwegian company's Chief Executive said on Thursday.
"I think it will take much of 2004 before we will see any significant upturn in Europe," Jan Oksum told Reuters in an interview. "Our industry has had some false starts already."
Norske Skog, which has paper mills on five continents, has been hit along with its rivals by a drop in demand due to a sluggish global economy. It has also taken big cost cuts, partially compensating weak sales.
"We think the upturn will come. But we plan and act based on a perception that we must make any improvements ourselves. Markets will not rescue us," he said.
Oksum, who was appointed chief executive last autumn, said increased economic activity in the US had still not given any significant impulse to paper demand, and that European advertising would probably lag North America.
"European newsprint demand was flat until the end of 2003. We do not have any confirmed figures for December but it seems like we have had a seasonable upturn at the end of the year," he said.
Oksum also referred to expectations that European newsprint prices will change little this year when the current round of annual price talks are concluded.
"I guess the common perception is that the overall result will be plus-minus zero," Oksum said, adding there were some variations among the markets in which talks were concluded.
Negotiations with customers such as big newspaper houses have lasted longer than previously expected. "I think it is reasonable to expect (negotiation) activity in February too," Oksum said. German talks are still continuing.
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