Bio Pappel reports narrower margin for 2020

Mexico City-based recycled-content paper and board producer Bio Pappel has reported 2020 results that show higher overall shipments but a narrower profit margin. The company cites “higher raw material costs due to a lower supply” in the global scrap paper market as a factor.

Bio Pappel, which produces printing and writing papers in Mexico and packaging board in Mexico and the United States, shipped 3.1 percent more finished product from its mills in 2020 compared with 2019.

That was despite COVID-19 restrictions in 2020 that caused “the cancellation of the school season and office work that reduced the consumption of notebooks and cut paper,” states the firm.

The good news for Bio Pappel, as for many papermakers in 2020, came on the packaging side. The company’s higher shipment and revenue figures can be attributed to “strong demand in the packaging sector, the consolidation of our expansion plan in the United States and the transformation of our products to achieve a mixture with greater added value,” according to the firm.

Bio Pappel says its 1.684 million tons shipped in 2020 fetched a unit price that was 2.6 percent higher compared with the previous year, creating a 2020 net sales figure that was 5.7 percent higher than that for 2019.

However, the company’s rising cost of sales narrowed its EBITDA (earnings before interest, taxes, depreciation and amortization) margin from 20.8 percent in 2019 to 17.7 percent last year.

“The positive results achieved by Bio Pappel during 2020 reflect the company’s strong operational, financial, market and management fundamentals in the face of one of the biggest crises in health and economics in history,” states Miguel Rincón, the company’s director general.

Rincón also expresses optimism in 2021 about Bio Pappel’s “growing presence of our operations in the United States due to efficient regional integration and market leadership.”