2019: What’s in Store for the Pulp and Paper Industry?
With just a few weeks before we usher in the new year, several industry forecasts will be released to guide major players on what to expect. In the pulp and paper industry, it will be interesting to note what trends will impact the business in 2019. This industry is one of the largest in the world led by producers from North America, Northern Europe, and East Asian countries.
It will be a proactive strategy for the industry players to come up with innovative ways on how to sustain their businesses. Their efforts need to contribute to the increase in production and sustain industrial growth. So, what will be the trends for the paper and print industry in 2019? Let’s look at these aspects.
Global outlook of the industry
According to a report by Moody’s, the global paper and pulp production will remain stable with overall operating earnings continuing to expand in 2019. World production of paper and paperboard is forecasted to reach 490 million tons by year 2020. European and US productions will remain stable with China and Japan joining the ranks of top paper producers. Moreover, the paper industry will focus on serving more niche markets as a result of changing demand and production methods. Cardboard and packaging paper products will have continued global demand.
Strengths and weaknesses of the industry
Based on the market research made by PG Paper, there are 3 reasons for the strengthening of the industry. These are the increasing ecommerce demand for cardboard as a packaging material, new market outlets from the middle class in emerging markets, and increasing demand for hygiene products. In contrast, these are the factors that are contributing to the negative side of the sector: feedstock cost sensitivity, high investment costs to sustain future growth, and competition of plastics with cardboard in the aspect of packaging.
Rising prices and scarce supply for magazine papers
In an article published by Publishing Specialist, the prices for magazine-quality paper in the US will continue to increase due to a shortage in supply. It is forecasted that prices for this kind of paper will increase by 25% come 2019. The shortage in supply may be attributed to decrease in production of coated paper by paper companies. These paper companies had shifted their production to packaging papers and cardboards for boxes. This trend has influenced the rising demand for packaging from ecommerce businesses such as Amazon.
Impact of digital transformation
With increasing Internet usage and the rise of social media, the demand for print paper will continue to decline. But worry not. Paper and packaging industries will rethink strategies and new business models to ride the tide of digital change. With increasing demand from the ecommerce sector, intelligent packaging and personalization will be in demand.
Also, digital technology in paper and pulp production will change the way manufacturing processes are being automated. Manual processes can be digitized to increase production and precision. High levels of manufacturing uniformity at lower energy production are attainable.
To conclude, the paper and pulp industry will remain stable come 2019 provided that overall operating earnings are contained. There’s a nagging perception that with the continuous digital transformation of processes, paper is a dying product. On the contrary, the demand is strong with the increase in activities in ecommerce industries and other products that still need paper. After all, the industry will not go extinct as long as the major players will think of ways to innovate and disrupt within their sectors.