During the recently concluded Paper Recycling Conference Europe, held in Warsaw, Poland, Oct. 30-31, 2013, representatives from different sectors of the paper industry looked at the challenges and opportunities available for companies involved in the paper recycling industry.
The session titled, The Future of the Paper/Recycling Industry, provided attendees with a look from various points over where the paper and paper recycling industry is heading.
Dr. Graham Moore, a strategic consultant with Smithers Pira, noted that considering the economies in Europe, paper recycling has been a success. Moore said the overall recycling rate in Europe reached 71.7 percent in 2012, and only 10 countries in Europe have a paper recycling rate of less than 60 percent. However, the paper recycling rate has started to level off as the consumption of newsprint declines. In fact, the figure is down slightly from Europe’s high-water mark of 72 percent, reached four years ago, he said.
Additionally, Moore pointed out that the global consumption of recovered fiber is fluctuating, though the overall trend is flattening.
|Ranjit Baxi discusses export markets for recovered fiber at the recently concluded Paper Recycling Conference Europe.|
Meanwhile, the consumption of recovered fiber continues to be dominated to China. Moore’s presentation noted that in 2012 China consumed 31 percent of all the recovered fiber marketed in the world. However, more recently China has started to ease back its new purchases. Moore’s presentation noted that over the first six months of 2013 consumption of recovered fiber by China declined by 0.7 percent from the same time in 2012. Overall, the global growth of recovered fiber growth equals only 58, 000 metric tons between the first half of 2012 and the first half of 2013, with most of the growth coming from Asia and Eastern Europe, he said.
Moore said that while the growth of recovered fiber consumption in Europe would continue, increased consolidation would reduce the number of players and end-use applications, such a retail-ready packaging, would drive improvements in product performance and print quality.
Rickard Arnqvist with Stora Enso provided a look at the paper industry from a mill’s perspective. In his presentation, Arnqvist discussed the growth of Stora Enso, noting that the company has made a number of strategic investments in the faster growing sector of Eastern Europe.
In his presentation, Arnqvist said significant changes were taking place with graphic paper throughout Europe. He noted that the steady decline in demand would force the European paper industry to continue to close excess capacity to bring supply and demand into balance. Looking out five years, he said rojections for European graphic paper demand will be around 6.5 million tons less than present demand.
With demand for graphic paper declining, Arnqvist said the European paper industry would be challenged to focus on keeping costs down throughout the whole fiber supply chain. The result will be that “only the fittest will survive.”
At the same time, the quality of the recovered fiber market would become more important, he pointed out. And, as for the popularity of single-stream collection in the United States, Arnqvist says that European companies must avoid the commingled collection. “Separate collection system must be the rule in Europe.”
For packaging, business would be better, with growth of between 2 to 3 percent coming through this decade, though he said he expected most of the growth to come from emerging markets. There would be significant need for further containerboard production capacity until 2020, though most of it would be in emerging markets, which would drive the increased demand for fiber, Arnqvist said.
Jim Malone, European sales and purchasing manager for DS Smith Recycling, focused on the collection side of the recycling equation. His company, a part of the DS Smith Group, handles more than 5 million metric tons His presentation noted that the global demand for both paper and recycling will continue to grow over the next 10 years.
Malone also noted that the European recycling rate has been flattening out after peaking at 72 percent in 2009.
Ranjit Baxi, chairman of J & H Sales, looked at the trends in the export market for recovered fiber. His outlook was far more optimistic. With the expected growth in demand for recovered fiber, there will be a growing demand for higher quality recovered fiber, he noted. “We are seeing a transitional changing market condition. The buyer is getting more in control globally and not the seller,” Baxi said.
For recyclers, he said that companies need to modify their approaches. “We need to understand and focus on the buyers’ quality specification and regulations.”
Meanwhile, Baxi noted, “Lower grades are at greater risk due to lower quality standards and may even decline.” By 2020, he added, the growth in lower grades could result in more of that fiber ending up in the RDF (refuse derived fuel) stream.