Jefferson Smurfit Group has retained its dominant influence over US associate Smurfit Stone with the appointment of Mr Pat Moore to succeed Mr Ray Curran as president and chief executive, following Mr Curran's retirement at 55.
Since Smurfit merged its JS Corporation subsidiary with Smurfit Stone, it has dominated top level management of the company even though Smurfit owns no more than one-third of the merged operation's equity. Shortly after the merger was completed, Mr Curran moved from finance director of the Smurfit group to become president and chief executive of the Chicago-based Smurfit Stone.
Since then, he has presided over an aggressive disposal programme, which has seen Smurfit Stone sell its newsprint and timberland operations to concentrate on the core containerboard and linerboard business. His tenure as chief executive has also seen a radical rationalisation programme aimed at reducing the group's debt. Since the merger, Smurfit Stone debt has fallen from almost $8 billion (€8.94 billion) to just more than $5 billion, despite paying $1.4 billion two years ago for Canadian group, Saint Laurent Paperboard.
While the cost-cutting operations have been an undoubted success, the US company's trading record over the past three years has been decidedly mixed, with the packaging sector in the US suffering from serious overcapacity. It took until the final quarter of 1999 for Smurfit Stone to report a quarterly profit. Stronger trading during 2000 was followed by a profits warning a year ago and a sharp fall in first-quarter 2001 profits.
Second- and third-quarter results showed continued weak trading, with the group suffering from the downturn in the US economy.
There has been strong speculation over the past year that Jefferson Smurfit and Smurfit Stone might merge. Smurfit Stone has a current market value of €4.4 billion while Smurfit is valued at €2.7 billion.
The new president and chief executive, Mr Moore (47), has held senior operation and financial management positions with Smurfit Stone and JS Corporation since 1987 and has been vice-president and chief financial officer of Smurfit Stone since 1998.
