Power, Inc.: The Epic Rivalry Between Big Business and Government--and the Reckoning That Lies Ahead by Rothkopf David

Author:Rothkopf, David [Rothkopf, David]
Language: eng
Format: epub, mobi
Publisher: Farrar, Straus and Giroux
Published: 2012-02-28T00:00:00+00:00

Out of the Ashes of Europe: The EU and Stora

After 1945, Stora Kopparberg integrated itself into the world economy. Forestry had continued to become one of its most important lines of business for the same reason it was so important to Sweden: forests cover 60 percent of the country. But the industry is heavily dependent on foreign markets. It is also fiercely competitive worldwide, a fact that only grew more pronounced as more and more forest products from distant corners of the globe were made available and affected international pricing and demand. To cope with the competition, the company purchased one of Sweden’s leading cardboard producers, and in 1962, it made a bold venture overseas, literally retracing the initial international route of the Vikings to establish a forest products plant in Nova Scotia.

The company would later receive criticism from Canadians who sued because they objected to Stora’s spraying of local forests with dioxin, a poisonous herbicide. For Stora, this raised for the first but not the last time the important issue of what social obligations international companies have to local populations and to what degree they assume responsibility for meeting the terms of the social contract from governments whose rights they have assumed or whose influence they have superseded.

Gradually during the 1970s, Stora reduced its increasingly uncompetitive exposure to the steel business and focused more and more on forests. The result was that the company grew steadily throughout the next decade. By 1988, a journalist noted that Stora, this ancient enterprise about which so few people have heard a thing or given a thought, “owns forests half the size of Belgium, produces enough liquid-packaging board to make two milk cartons for every person in the world and makes newsprint for Sweden’s newspapers and some of Europe’s other largest dailies.” To offer another such analogy, today Stora either owns, manages, or leases land in Europe, Asia, and South America that is equivalent in acreage to Qatar.

In the late 1980s, by the time of the Swedish Match deal, Stora had clearly embarked on another chapter in its long, twisting story. Its acquisition of Kreuger’s old firm, although ultimately not the game changer it was thought it might become, was at the time the largest cash and securities deal in Sweden’s history. The country, sensing the importance of international markets to its business, was also working like other Swedish firms to position itself to be competitive in the unifying markets of the European Union.

Bo Beggren, Stora’s president at the time of the Swedish Match deal, stated: “We have been a fairly quiet, silent company over the years but [recently] we have embarked on an aggressive expansion. We were searching for something new to develop, and Swedish Match, with its international organization, was an obvious partner.” Beggren further underscored the company’s new course during a “coming-out” party in 1988, hosted to celebrate the seven hundredth anniversary of Bishop Peter of Vasteras’s deal for his shares in the old mining company. The event was held at the bottom of the mine’s Great Pit.

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