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company’s business soon became most profitable, its dividends unusually good and the
Billerud shares were considered to be among the finest in Sweden. Gratis shares were
repeatedly issued.
The company’s finances, however, gradually became subject to heavy fluctuations.
This, in the first place, was due to the variations in the prices of the most important
raw material in the manufacture of wood-pulp, namely the pulp-wood.
In the first year of the company’s activity, 1884, the sulphite pulp fetched a price
of Kr. 280 pr ton, while the paper-wood only cost 24 Kr. per cubic fathom. At that
time competition for the wood felled in the company’s purchasing district was
insignificant, especially for small dimensions. However, as manufacturing industries increased
in number, while the supply of timber remained practically at a standstill, conditions
rather favoured the owners of the forests to the detriment of the industries. Later on,
when the pulp industr}7 gained a footing in the province of Norrland with its immense
and cheap supplies of timber, competition became still more severe for this industry
in the province of Vermland, and in other parts of the south and centre of Sweden.
The margin of profit on the manufacture of pulp was pressed down by competition
from the industrial districts in Norrland, which were favoured by lower prices for wood.
The relation between the price of wood-pulp, on the one hand, and the price of wood,
on the other hand, can, however, on the whole be observed to have grown steadily
worse. The price of sulphite pulp per ton and of wood per cubic fathom was:
in 1884 for sulphite pulp 280 Kr. for wood 24 Kr.
» 1913 » » » 140 » » » 45 »
» 1918 » » » 340 » » » 120 »
As approximately 1 V4 cub. fathoms of wood are required for one ton of pulp the cost
of the wood, in proportion to the current average price of chemical pulp, was:
in 1884 11 %, in 1913 25 %>, in 1918 44 %.
It is only natural that this state of affairs affected the financial standing of the
Billerud Company. This company had from the beginning based its enterprise solely
on the purchase of wood on the open market and not by acquiring its own forests.
Now, as we have shown above, when the price of the pulp-wood rose on account of
ever-increasing competition, it began to qppear that it was the forest-owners and not
the industries who were gaining the real benefit of the cellulose industry which had
so suddenly begun to flourish in Vermland. On this account, when the present manager
of the concern took over the reins in 1907, Billerud’s position was rather weak. The
years 1908 and 1909 also gave bad results. The total net profit for 1908 was about
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