Porter Reflects (CONT’D FROM PAGE 34)
WestRock’s.” Porter says the increase in e-commerce high- lights the importance of digital technology, which is driving increased automation at box plants. “Clearly digital execu- tion, e-commerce and the supply chains that are required to support that is a huge change and that’s going to con- tinue to accelerate.” The rapid increase in e-commerce combined with the disruption of COVID-19 and cyber security attacks have created a perfect storm of containerboard supply shortag- es. Box plants have been juggling the increase in demand with tight supply. Porter believes the new capacity coming online will help balance the shortage, “WestRock custom-
ers in all parts of the world are short on paper because there was this explosive spike in demand. It will come back into balance. Where there is demand, supply will follow. Porter visiting WestRock’s Hebron, Kentucky, preprint facility.
Sometimes the supply follows in oversupply. Sometimes undersupply. Supply/demand is never perfectly balanced because once it gets perfectly balanced something will change that and will cause it to be long or short. New capacity will catch up. I don’t see demand dropping off. I think there will be in- cremental growth and the industry is poised for solid times ahead.” However, the amount of new capacity coming online in the next few years has some analysts concerned that the U.S. is headed into an oversupply situation. “I think not,” Porter says. “There is new capacity coming and it needs to come. There are some old- er assets that deserve to be idled over time. The dynamics over the last two or three de- cades show those ebbs and flows of new ca- pacity demand and old capacity going offline so the balance will be fine. Neither of those situations are a crisis. It’s just part of a very large global supply/demand system that is capital-intensive, so it takes time to bring that capacity on, to reach that balance.” WestRock was recently the victim of a cy- ber attack. While Porter deferred comment to those within the company better posi- tioned to respond, he noted that the attack emphasizes how reliant industries are on digital solutions and the importance of pro- tecting those solutions. “That demonstrates the vulnerability that society faces.” As far as advice for other converters, he says, “As executives, just hire the best and make sure that is top of mind.” Market Trends During a presentation Porter gave at the 2018 Corrugated Week conference in India-
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July 12, 2021
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