The Future of Pulp and Paper Industry

Papers are one of the things that are used on a daily basis.  Students use paper for writing in school, offices use paper for their mails and letters, publication companies use paper for printing books, newspapers, and magazines, papers are used for arts and crafts, and there are actually more uses of paper aside from those that are mentioned earlier. The pulp and paper industry has boomed and in a good state for the past years, but many people are saying that they are or will soon face some challenges and changes.

Exhibition at Tissue World Miami

Come March 21-23, 2018, there will be a tissue industry trade show and conference in Miami, USA, where over 200 exhibiting companies and 2500 visitors are expected to attend. This paper expo is expected to attract numerous industry experts, and if you are concerned about the future of the industry you should attend.

Next, in an article by Peter Berg and Oskar Lingqvist, let us find out about some transformational changes in the pulp, paper, and packaging industry in the next decade.

Pulp, paper, and packaging in the next decade: Transformational change

If you thought the paper industry was going to disappear, think again. Graphic papers are being squeezed, but the industry overall has major changes in store and exciting prospects for new growth.

From what you read in the press and hear on the street, you might be excused for believing the paper and forest-products industry is disappearing fast in the wake of digitization. The year 2015 saw worldwide demand for graphic paper decline for the first time ever, and the fall in demand for these products in Europe and North America over the past five years has been more pronounced than even the most pessimistic forecasts.

But the paper and forest-products industry as a whole is growing, albeit at a slower pace than before, as other products are filling the gap left by the shrinking graphic-paper2 market (Exhibit 1). Packaging is growing all over the world, along with tissue papers, and pulp for hygiene products. Although a relatively small market as yet, pulp for textile applications is growing. And a broad search for new applications and uses for wood and its components is taking place in numerous labs and development centers. The paper and forest-products industry is not disappearing—far from it. But it is changing, morphing, and developing. We would argue that the industry is going through the most substantial transformation it has seen in many decades. Read more here.

Many of us might think that the pulp and paper industry is already leading to an end due to some reasons like modernization, but we are actually wrong.  That could never happen because pulp and paper is used in many of our needs and necessities like tissue paper and such. However, the paper industry already expects prices to rise soon. Bhanvi Arora will tell us more about.

Paper Industry Expects Prices To Rise Soon

The Indian paper industry is expecting an increase in the prices of pulp and paper in the coming months in line with the increase in global prices.

Internationally, prices were low about two years ago but they have improved now, Harsh Pati Singhania, vice-chairman and managing director, JK Paper Ltd., told BloombergQuint at the sidelines of an event in New Delhi today.

International prices of pulp and paper have risen, with merchants in the U.K. increasing prices of uncoated paper between 5-7 percent. Pulp prices have risen £70-80 per tonne since the start of this year in the U.K.

International hardwood pulp prices rallied from $200-690 per tonne, mainly due to supply disruption as pulp mills in Indonesia and Brazil experienced lower production due to environmental concerns as well as maintenance shutdowns. Read more here.

Price increase is really inevitable in any business. As for the paper industry, the raised cost of raw materials caused price hike for paper production which has an effect in the paper industry around the world. They said that there is a need for more areas of plantation for their raw materials. However, according to Moody’s Corporation, global paper and forest products industry will remain stable on steady operating income growth. Let us read more about it below.

Moody’s: Global paper and forest products industry outlook to remain stable on steady operating income growth

Toronto, March 23, 2017 — Higher prices and stronger wood product, paper packaging and market pulp demand offsetting rising input costs and lower paper demand will keep the outlook for the global paper and forest products industry stable, says Moody’s Investors Service in a newly published global outlook for the sector. Consistent with the stable outlook, the rating agency expects consolidated operating income increases of 2-4% for its 46 globally-rated forest product companies over the next 12-18 months.

Moody’s expects that the consolidated operating income of the 29 North American companies it rates will remain essentially flat, with 2-4% growth over the outlook period. Such growth is consistent with analysts’ expectations of modest operating income growth from North American paper packaging, wood products and timberland producers being partially offset by lower operating earnings from pulp and paper companies. Significantly, these same companies account for about 60% of the global rated industry’s operating income.

“Notably, despite flat operating incomes overall for the North American subset, US timberland and wood products companies including Weyerhaeuser Company, Rayonier Inc., and Potlatch Corporation stand to benefit as the demand for new US housing increases about 8% in 2017 and as lumber prices escalate with the implementation of duties on Canadian lumber exported to the US,” said Moody’s Senior Vice President Ed Sustar. Read more here.

It is good to know that despite the rising cost, the pulp and paper industry will still remain stable. I am pretty sure that even when the price will increase, this industry would not be removed because they produce things that people need. As said earlier, there will be changes but it would be not be enough to put this industry down. Some paper mills might close, but there will always be paper mills operating around the world. People only have to come up with solutions to address the challenges that this industry is currently facing.


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