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China, India, Latin America and Russia remain the growth drivers in the forest products market, while European and Canadian producers have been impacted by market forces, a new report has found.

PricewaterhouseCoopers' (PwC) 11th annual Global Forest, Paper and Packaging Industry Survey has highlighted global variations in financial fotunes across the sector during 2007.

Craig Campbell, one of the survey's authors, said: "The global forest, paper and packaging products sector continues to be shaped by shifting business and environmental factors, creating opportunities for some regions and challenges for others.

"Mills with the lowest production costs structures are the ones that are best able to manage currency fluctuations and rising costs."

In terms of return on capital employed (ROCE), the three top regions were Latin America with 7.8%, Emerging Asia with 7.3%, and the US with 5.5%. Canada's producers earned the lowest average at -0.1%.

High ROCE performers in 2007 included Swedish company Setra Group, Kimberly-Clark in Mexico and Kimberly-Clark in the US.

On the supply side, the report said the competitive advantage was continuing to shift towards South America, and found China remained a major influence on the demand side.

In terms of revenue, the number one spot in the 2007 PwC Top 100 list was taken by US-based International Paper, with sales of $21.9bn (£10.97bn).

Clive Suckling, global forest, paper and packaging leader at PwC, said: "Of the many economic factors which have affected the industry, the continued depreciation of the US dollar against other world currencies, the rising costs of transportation, raw materials, especially fibre, supply and energy, have had the greatest burden on financial results."