2016 Recycling Confex Middle East: Finders, keepers

The global recovery rate of old corrugated containers (OCC) could be as high as 85%, but that still may not be enough to satisfy future demand for the recovered fibre grade, according to presenters at the 2016 Recycling Confex Middle East, which took place in Dubai, United Arab Emirates (UAE), in early December.

Among the good news for OCC buyers and sellers is that the Gulf Cooperation Council (GCC) region will likely continue to generate more of the grade, said session chairman Atul Kaul of Saudi Arabia-based WARAQ Arab Paper. Kaul said Saudi Arabia generates about 55% of the GCC region’s recovered fibre while the UAE is the next largest contributor at 27%.

Farah Hamirani of UAE-based Paper Chase International says the value of OCC generated in the GCC region has been rising as buyers in India have appreciated its low moisture levels. The region also has material available, she said, with only 50% of the OCC generated within the GCC being consumed by mills within the region.

Those long-term trends are more welcome than the short-term situation in late 2016, with many Indian buyers on the sideline because of the demonetization (currency retirement) policy in that nation. “Mills are struggling to source raw material,” said Hamirani, because of the tight cash flow situation in India.

Kashif Amin, the managing director of the Middle East office for Sweden-based Ekman, said a forecast developed by Ekman says China will “still be far from self-sufficient in terms of recovered paper” in 2018 and will continue to be the largest buyer on the global market.

However, Ekman also anticipates other nations in Asia, including India and Vietnam, also will increase their appetites for scrap paper. As to where that fibre will come from, Amin commented that the world average recovery rate for OCC may already be 85%, and each ton collected to boost that rate involves “collection costs that will rise.”

Representing mill companies on the panel, K.B. Raut of UAE-based Union Paper Mills, said that while OCC is collected in the GCC region, the overall paper recycling rate may be only 30%. “The potential is 70%,” he remarked, noting that this level has been reached in other parts of the world.

Raut said increased collection from households and offices will be needed in the UAE and its neighbouring nations to begin reaching the 70% and 80% paper recycling rates found in parts of Europe and Japan.

The 2016 Recycling Confex Middle East was 5-6 December at the Hyatt Regency Dubai in the United Arab Emirates.