Despite recovering from recessionary challenges, industry revenue growth is expected to slow
Los Angeles, CA (PRWEB) July 16, 2012
The Global Paper and Pulp Mills Industry is a large worldwide industry, taking in $575.4 billion in revenue during 2012 and showing annualized growth of 4.2% over the past five years. Some 4,007 mills operate globally, employing approximately 428,757 people. According to IBISWorld industry analyst Teruni Nugawila, in 2012, the industry is expected to continue recovering from 2009, the worst year in the past decade. A global drop in demand caused revenue to contract in 2009, with major adjustments to capacity and employment. This indicated tough operating conditions for most companies, and the inability to cut costs and capacity at a fast enough rate to match a drop in demand. Production is expected to increase during 2012, while the world price of pulp is forecast to grow by 4.3%. As a result, industry revenue is forecast to grow by 6.0% in 2012.
Industry firms have battled volatile demand conditions over the past five years. On one hand, consumption of printing and writing paper and newsprint is declining in the developed world due to competition from electronics. On another hand, demand for packaging paper and paperboard has been buoyant due to a boom in manufacturing in rapidly developing Asian economies and the corresponding need for packaging materials. For this reason, operators have shifted toward more production of paperboard and less production of paper. This product mix change is expected to continue over the period through 2017, as internet penetration increases in more countries.
The next five years will be challenging for the Global Paper and Pulp Mills Industry as it grapples with problems such as maintaining sustainable production and preventing dumping practices. The industry's revenue growth is forecast to slow over the next five years. Competition from cheaper products produced in China, Indonesia and other developing countries will put pressure on major players from Europe, the United States and Japan. In addition, accommodating for an increase in regulation on greenhouse gas emissions will hurt the industry, as costs will rise but demand conditions will remain volatile.
Labor dependency in mills is falling. Technological developments in paper making machinery are still relatively rapid, meaning that production workers are fewer. Computerization of systems has allowed for less workers manning machinery, which has led to a falling trend in industry employment. “Given that most of the pulp, paper and paperboard is produced in Europe and North America, where paper making is highly technological, weakening labor dependency is not surprising,” says Nugawila. Emerging economies still have a higher number of workers per establishment compared with the westernized world. However, foreign investment in these countries has allowed for imports of technology over the past ten years, which means the lag between the developed world and developing countries is shrinking. For more information, visit IBISWorld’s Global Paper and Pulp Mills industry report page.
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IBISWorld industry Report Key Topics
Paper mills produce pulp, bulk paper and bulk paperboard from a variety of purchased inputs, including woodchips, clay, lime, dyes, chemical resins and others. This includes the manufacture of paper from any fiber and the production of pulp from recycled paper. Some companies may manufacture paper and/or paperboard from purchased pulp while others produce their own pulp.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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