ISRI CONVENTION: A Paper Planet

As long as middle classes are expanding, so will the hunger for scrap paper.

Some 3 billion new capitalists are driving up demand for all commodities, including scrap paper, Pete Grogan of Weyerhaeuser Inc. told attendees of the Paper Spotlight session at the Institute of Scrap Recycling Industries Inc. (ISRI) Annual Convention.

 

Grogan said the rush into free market economic systems in China, India and Eastern Europe is fueling the global growth in paper and packaging production. “It is the essence of the recovered paper story—because they are consuming a lot more products,” he stated.

 

While North American paper mill capacity roughly matches the needs of its market, the European market is still exhibiting growth. Grogan notes that with the recent expansion of the European Union from 15 nations to 25, the economies of Europe “are more integrated than at any point in time since the Roman Empire.”

 

The active trading is helping to bolster the economies of former Soviet bloc nations that were once home to inefficient, state-supported paper mills. Additionally, a generation of young Europeans who Grogan referred to as the “e-generation” supports the environment and recycling, and will make purchases based on recyclability and recycled content.

 

Without question, the one-fifth of the world’s population living in China that is striving to advance economically is “having the most dramatic effect on recycling of any nation in the world,” said Grogan. “China is the 800-pound gorilla. In my opinion, it’s like a new sun in the economic solar system.”

 

Grogan noted that the nation is building the world’s largest paper mills even though it has only 4 percent of the world’s trees. The country is likely to continue to produce record annual amounts of paper and paper products for years to come.

 

Grogan predicted that China will consume 20 percent of the world’s recovered paper by 2020 and that the nation is in the “early stages of recovering its status as the world’s largest nation and largest economy.” One forecast has China attaining this status around the year 2039.

 

Along with China and Eastern Europe, the economy of India is another one featuring a growing middle class that currently stands at around 300 million people and counting. Like China, the nation of India is building larger shopping centers to offer packaged goods to its growing middle class—part of a recovered paper chain that is developing.

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Unlike China, which is becoming the factory of the world, India is becoming the ‘back office’ of the world. This probably means less corrugated packaging is necessary, but a more educated populace is reading newspapers, magazines and using office grade paper.

 

Activities in these three places—as well as in Latin America and parts of Africa—should spur a worldwide need for paper products and recovered paper feedstock for the foreseeable future.

The ISRI Annual Convention was held in the first week of April at the Mandalay Bay Resort in Las Vegas.

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