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State of play and future of the paper & pulp industry in Europe. Berry Wiersum – CEO of Sappi Fine Paper Europe Brussels, 7 March 2013. The pulp and paper industry in Europe. European pulp & paper industry: Turnover (Bn euro) 81 Added value (Bn euro) 18 - PowerPoint PPT Presentation
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State of play and future of the paper & pulp industry in EuropeBerry Wiersum – CEO of Sappi Fine Paper Europe
Brussels, 7 March 2013
The pulp and paper industry in Europe
European pulp & paper industry:
• Turnover (Bn euro) 81
• Added value (Bn euro) 18
• Pulp production (million tonnes) 39
• Paper production (million tonnes) 95
• Employment (thousand jobs) 222
• 60% of direct & indirect jobs in rural areas
European paper value chain:
• Added value (Bn euro) 100
• Employment (thousand jobs) 1,600
Page 2
CEPI Paper & Board Production by Grade 1991 - 2011
Page 3
Evolution of the main paper products grades
Source: Eurostat, Nov 2012
2005
M01
2005
M06
2005
M11
2006
M04
2006
M09
2007
M02
2007
M07
2007
M12
2008
M05
2008
M10
2009
M03
2009
M08
2010
M01
2010
M06
2010
M11
2011
M04
2011
M09
2012
M02
2012
M07
75
80
85
90
95
100
105
110
115
C - Manufacturing
C171 - Manufacture of pulp, paper and paperboard
C1721 - Manufacture of corrugated paper and paperboard and of containers of paper and paperboard
C1722 - Manufacture of household and sanitary goods and of toilet requisites
C181 - Printing and service activities re-lated to printing
Ind
ust
ry p
rod
uct
ion
in
dex
- m
on
thly
dat
a -
(200
5 =
100
)
Page 4
The paper industry as part of the manufacturing sector
Source: Eurostat, Nov 2012
2005
M01
2005
M06
2005
M11
2006
M04
2006
M09
2007
M02
2007
M07
2007
M12
2008
M05
2008
M10
2009
M03
2009
M08
2010
M01
2010
M06
2010
M11
2011
M04
2011
M09
2012
M02
2012
M07
40
50
60
70
80
90
100
110
120
C - Manufacturing
C171 - Manufacture of pulp, paper and paperboard
C231 - Manufacture of glass and glass products
C2331 - Manufacture of ceramic tiles and flags
C2351 - Manufacture of cement
C2352 - Manufacture of lime and plaster
C24 - Manufacture of basic metals
C2442 - Aluminium production
D351 - Electric power generation, trans-mission and distribution
Ind
ust
ry p
rod
uct
ion
in
dex
- m
on
thly
dat
a -
(200
5 =
100
)
Page 5
The industry as global player – trade flow
Page 6
0
20
40
60
80
100
120
1995 2000 2005 2010 2015 2020
Million tons
Graphic
Packaging
Graphic paper demand in Europe is expected to decline by 1 million tons during the current decade, while demand for tissue paper and packaging grades will continue to grow.
Tissue
Paper Demand in Europe through 2020: packaging and tissue being ahead
Source: Poyry, March 2011Page 7
-4
-3
-2
-1
0
1
2
0 20 40 60 80 100Share of consumption in 2008, %
Demand growth, %/a
Sack paper
Othergrades
Cartonboards
TissueContainerboards
Newsprint
Uncoatedwoodfree
Uncoatedmechanical
Coatedwoodfree
Coatedmechanical
Demand for paper in Western Europe is expected to decline by 0.5%/a through 2020, calculated from the high 2008 level. The demand for graphic papers is relatively weak.
Average -0.5 %/a
Long-Term Demand Growth in Western Europe through 2020
Source: Poyry, March 2011Page 8
Sackpaper
Cartonboards
Tissue Containerboards
Coatedwoodfree
Othergrades
Average 3.1 %/a
Uncoatedwoodfree
The rapid growth of the Eastern European markets is forecast to continue well into the future. Demand for coated woodfrees will increase relatively fast.
0
1
2
3
4
5
6
0 20 40 60 80 100
Share of consumption in 2008, %
Demand growth, %/a
Uncoatedmechanical
Newsprint
Coatedmechanical
Long-Term Demand Growth in Eastern Europe through 2020
Source: Poyry, March 2011Page 9
Graphic paper outlook
Dynamics of Commercial Print versus Publishing
Page 10
Graphic paper outlook
Will advertising recover?
Adspend as % of GDP
Yes, it will, but will not recover fullyThe winners on this partial recovery will not be
paper … but all the new media channels
Source: EMGE
Page 11
Graphic paper outlook
Print versus Digital revenues trends
Page 12
Graphic paper outlookGDP Growth to decouple from WFC/MCR Growth in Europe – increasing impact digital media
Page 13
Enhancing the European Economy
42.1 billion square meters
686 plants across Europe
75% of European goods travel in corrugated
Source: FEFCOPage 14
Paper for Packaging
Potential drivers for growth
Growth of grocery retail market Corrugated packaging is a powerful sales agent at the point of sale It can be ‘tailor-made’ to meet specific needs and so increases efficiencies:
Handling in-store Distribution and transport efficiencies
Page 15 Source: FEFCO
Potential drivers for growth
Consumer attitudes Desire for information at point-of-sale Sustainability
Corrugated packaging is 100% renewable, 100% recyclable and 100% biodegradable
Around 80% of consumers prefer paper based packaging (Gfk Germany 2009)
Page 16 Source: FEFCO
Regional Consumption of Tissue, 1994-2021
Page 17 Source: RISI
Expansion concentrating on emerging markets(Million Tonnes)
Growth Rate of World Tissue Consumption, 2004-2021
Page 18
The next few years expected to show good global demand growth
Source: RISI
Expected Relative Tissue Consumption Growth by Region, 2010-2021
Page 19 Source: RISI
Emerging markets showing high growth rates
Roadmap 2050
Page 20
Roadmap 2050
Page 21
Manufacturing: Europe and the World
Total manufacturing industry production, seasonally adjusted
Source: OECD, Dec 2012
Jan-0
5
Jul-0
5
Jan-0
6
Jul-0
6
Jan-0
7
Jul-0
7
Jan-0
8
Jul-0
8
Jan-0
9
Jul-0
9
Jan-1
0
Jul-1
0
Jan-1
1
Jul-1
1
Jan-1
2
Jul-1
2
60
80
100
120
140
160
180
200
India
Korea
Turkey
Russian Federation
Brazil
Mexico
South Africa
Euro Area (17 Countries)
United States
Japan
Canada
Ind
ex 2
005
= 1
00
Page 22
Enabling conditions for a competitive paper industry
• Energy prices are « life threatening », even for the oil-based sector
Electricity (EUR/MWh; US data excl. tax) Natural gas (EUR/MW)
Page 23
Comparison prices natural gas EU-US
Page 24
Consumption natural gas SFPE = 6.000 GWh p.a Competitive disadvantage SFPE = € 105 million p.a
Enabling conditions for a competitive paper industry
Our research suggests that regulation and compliance continues to be the biggest overall risk. In fact, four out of the seven sectors we surveyed ranked this as number one. Across all sectors, both cost cutting and pricing pressure rose significantly up the ranking, although many respondents indicated steps taken to mitigate these risks have been reasonably effective.
Page 25
The next generation technology requires new skills
1. Chemical and Engineering to improve and develop clean technologies
2. Flexibility and multiskilling – ability to move between zones
3. Flexible time management to handle volatile demand
4. Collaborative skills internally and between entities
5. Self starter DNA as hierarchies evolve to accommodate the individual contributor
6. Information Technology
Page 26
Summary
The Pulp and Paper Industry is viable and sustainable
It creates a lot of indirect employment
As graphics declines, packaging and hygiene grow
Europe needs access to competitive energy and feed stocks
Europe needs to kick the habit of cost increasing regulatory overload
The Roadmap 2050 is a major opportunity to revitalize the industry
Page 27
Page 28
CEPI aisbl / Confederation of European paper Industries250 Avenue Louise, Box 80, B-1050 BrusselsTel: +32 2 627 49 11 / Fax: +32 2 624 81 [email protected]
www.cepi.org / www.paperonline.org / www.paperforrecycling.eu
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