Demand from developing markets, especially Asia and South America, will support industry growth
Los Angeles, CA (PRWEB) August 09, 2013
The Global Paper and Pulp Mills industry generates significant business around the world, generating $563.6 billion in revenue during 2013. Over the past five years, revenue from the Global Pulp and Paper industry is expected to increase at an average annual rate of 0.4%, driven by strong performance in paperboard packaging and tissue products. During the global economic downturn in 2009, however, industry revenue dropped a sharp 19.2% due to a severe drop in pricing and shipment volumes. “Demand for printing and writing paper dropped due to a structural change towards digital media and lower advertising spending due to the global recession, particularly in mature markets in Europe and North America,” according to IBISWorld industry analyst Caitlin Moldvay. Furthermore, decreased consumer spending and industrial production resulted in lower demand for paperboard from the packaging sector. Even revenue from tissue products, a staple consumer product, declined as consumers shifted towards more inexpensive varieties.
Following the end of the global downturn, however, the Global Pulp and Paper industry has recovered strongly. A boom in manufacturing in rapidly developing Asian economies and the corresponding need for packaging materials has increased demand for packaging paper and paperboard. “Tissue products have also been a strong growth segment, primarily due to rising consumption in Asia,” says Moldvay. The industry is expected to continue recovering in 2013, aided by a projected 12.0% increase in pulp prices during the year. IBISWorld expects that revenue for the Global Pulp and Paper industry will increase 3.0% in 2013.
Rising industrial production, particularly in Asia and South America, will boost demand for paperboard products. Furthermore, overall industry growth in developing markets is expected to outpace growth in the US and European paper markets. This trend is largely due to the ongoing decline in newsprint and fine paper production as a result of the continued transition to digital media. The industry is spread out across the globe, but is mainly concentrated in North Asia, Europe and North America. Not surprisingly, the top four companies in the industry (i.e. International Paper Company, Oji Paper Co. Ltd, Procter & Gamble and Stora Enso Oyj) are based in these three regions. There is a low level of market share concentration among the top four companies, however, and IBISWorld estimates that these companies combined generate less than 10.0% of industry revenue. All four companies are global enterprises with locations in many countries, but competition in the industry is high, preventing them from gaining a greater share of the market. Furthermore, competition is fierce in countries with emerging economies, such as China and Brazil. Merger and acquisition has been a common trend over the past five years; in particular, companies have acquired paperboard and other packaging companies in order to bolster their revenue in this high-growth sector.
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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