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Still strong, despite the virus

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The Confederation of European Paper Industries recently released its official figures about the performance of the sector over the last eighteen months, pointing out that although the impacts of the pandemic were dramatic, manufacturers can foresee interesting opportunities of development.

There is no doubt that, as well as many other industrial activities, paper and board production was significantly impacted by the Covid -19 breakout over the first two quarters of this year. Nonetheless, chances for a steady rebound are still there and, most of all, it has to be noticed that the sector suffered a less pronounced slowdown than other manufacturing activities.
These are only a few of the evidences that the recent CEPI international online press briefing brought to light, suggesting that, as the Confederation of European Paper Industries stated, the segment can rely on its «intrinsic resilience».
Data witnessed a -4.5% decline in paper and board production, compared to the -20.4% fall that other industries experienced between the months of January and May, 2020.
The decrease was rather predictable, since the EU’s economy was already weakening since late last year. At the same time the Coronavirus seemed to be able to boost sales in such categories as tissue and toilet paper, whose numbers remained reasonably high, and of course in that of packaging, whose success was also driven by the growth of e-commerce. CEPI also noticed that «the Covid-19 crisis has also accelerated an underlying change in consumption patterns related to the increase in teleworking and digitalisation». And that these trends «could have a long-lasting impact in the retail structures and production patterns».

Ups and downs
Bernard Lombard, trade and industrial policy director at CEPI, offered the audience an overview of paper and board’s recent performance on the basis of available data about the EU’s economy, global tensions and trade wars. He therefore noticed how all of these combined factors affected paper consumption and contributed to its 3.4% decrease in 2019, when production was down 3.1%. At the same time, nonetheless, the European market pulp grew at a 6.1% rate and this was due both to massive investments in new capacities, as Bernard Lombard considered, as well as to a more robust demand from export markets. In fact, market pulp exports grew 48% in 2019; driven by the request from Asian countries most of all. Whereas international sales grew 6.7% between 2018 and 2019, they were able to gain a further 10.3% last May, in comparison to May 2019. Taking into account the first five months of this year and the same period in 2019 they decreased by 1.0%. In detail, the manufacture of corrugated paper, paperboard, containers of paper and paperboard decreased by 7.9 percentage points between February and May, this year, due to the Covid-19 pandemic; manufacture of pulp, paper and paperboard was down 5.7%; printing and printing related service activities fell 22.8%. Sustainability and competitiveness represent an important part of the industry’s agenda and could undoubtedly play a major role in supporting its future development, despite the current crisis. Figures seem to confirm the veracity of this commitment. As the production of market pulp and paper remained reasonably stable over the last seven-eight years, «CO₂ direct emissions declined by 2.7% and the specific CO₂ emissions (per tonne of product) further decreased in 2019 by 1.0%». On top of that, as Lombard recalled, last year the share of domestic wood used by the pulp & paper industry went up to 84.2%. Hardwood represents 28.8% of overall consumption; softwood represents the remaining 71.8%. Recycling is of course a crucial part of the green strategy that the industry is striving to implement and over the last months it had to face a number of criticalities, triggered by the spreading of the coronavirus. «Paper for recycling availability», Bernard Lombard recalled, «has been at risk or even decreasing in many European countries due to lower collection activity – absence of workforce and sanitary measures in first place – in March and until early April. Since then, the limited availability is a result of lower generation of paper for recycling, especially from pre-consumer sources, due to lower economic activity. The gradual re-opening of hotels, restaurants and shops will impact the paper for recycling availability».

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