Global Trends in the Paper Industry
The paper industry is changing. In 2015, worldwide demand for graphic paper declined for the first time ever. However, exciting new opportunities in specialist papers, sustainable packaging and digitalisation offer new avenues for growth for the paper industry.
A McKinsey report which looked at the transformational change in the pulp and paper industry identified some of the challenges facing the paper industry.
It makes the point that the graphic paper market is shrinking and there is no obvious estimate about where the market floor will be.
Paper packaging growth
However, the authors also note that, while the market for graphic papers is shrinking, the market for paper packaging is growing worldwide. This growth is being driven by societal changes, including our changing shopping habits. In particular, online shopping means there is a growing need for paper and carboard packaging materials.
Improved product safety, the unboxing experience, counterfeiting measures and improvements to last-mile delivery are all identified as offering particular opportunities for innovation and growth for paper manufacturers.
The McKinsey authors, Peter Berg and Oskar Kingqvist , identified particular opportunities for producers of softwood fibres. They say, “In the medium term, requirements for a stronger, lighter-weight packaging and the need to balance out the deteriorating quality of recycled fibre could increase demand.”
However, while they see opportunities for growth, the authors also point out that the plastics packaging market is growing faster than paper packaging growth. This has prompted the authors to argue, “Given the confluence of technological changes, demographic changes, and resource concerns that we anticipate over the next decade, we believe the industry will have to embrace change that is, in character, as well as pace, vastly different from what we have seen before.”
The report authors are keen to highlight the benefits that digital manufacturing could bring to the sector, identifying drone-based forestry monitoring and improved mill automation as examples of areas that are ripe for optimisation through technology.
Overall, the verdict is optimistic: manufacturers have huge opportunities for optimisation and innovation if they respond effectively to changing market demand and the possibilities of digitalisation.