Pulp and paper markets in Europe - UNECE · China Asia Pulp & Paper (APP) Hainan 900* Brazil Veracel (Stora+ Aracruz) Eunapolis 900* Germany Mercer Zellstoff Stendal 550* Chile Arauco

UNECE/FAO, 26 septembre 2005AFOCEL LECContact : P.A. Lacour ([email protected]) 1

Pulp and paper markets in Europe

P.A. LacourAFOCELEconomics DepartmentDomaine de l’Etançon77370 NANGISTél.: 01 60 67 00 35Fax.: 01 60 67 00 [email protected]


Content of the presentation

PaperPulpRecovered paperTrends affecting the P&P Industry


Statistical sourcesAll data are coming from CEPICEPI countries are:

United KingdomIrelandSwitzerlandHungarySwedenGreeceSpainGermanySlovak RepublicFrancePortugalFinlandPolandDenmarkNorwayCzech RepublicNetherlandsBelgiumItalyAustria


PAPER


Paper Production by Region in 2003CEPI Countries29%

Rest of the World2%

Other Europe3%

North America31%

Asia30%

Latin America5%

Total: 328.1 Million Tonnes


Turnover and Paper Production in CEPI Countries 1991 - 2004

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

70,000

75,000

80,000

85,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Turn

over

(Mill

ion

Euro

s)

65

70

75

80

85

90

95

100

105

110

115

120

Pape

r Pro

duct

ion

(Mill

ion

Tonn

es)

Turnover Paper Production


Paper Production by Grade in CEPI Countries in 2004

Newsprint11%

Other Graphics40%

Sanitary & Household6%

Total Packaging39%

Other4%



Total Paper Production by CEPI Country in 2004

Spain6%

Rest of CEPI

Countries17%

Austria5%

United Kingdom

6%

Italy10%

France10%

Sweden12%

Finland14%

Germany20%



Paper Consumption by Region in 2003

CEPI Countries26%

Other Europe3%

North America30%

Rest of the World2%

Asia33%

Latin America6%



Trade Flows of Paper to and fromCEPI Countries in 2004

Other Europe: Exports to 2,996 Imports from 1,291

North America: Exports to 3,153 Imports from 1,762

Latin America: Exports to 1,147 Imports from 418

Rest of the World: Exports to 2,162 Imports from 369

Asia: Exports to 5,303 Imports from 375

'000 Tonnes


PULP


Pulp Production by Region in 2003CEPI Countries22%

Other Europe4%

Asia22%

Rest of the World3%

Latin America7%

North America42%



Number of Pulp Mills and Pulp Productionin CEPI Countries 1991-2004

0

40

80

120

160

200

240

280

320

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Num

ber o

f Pul

p M

ills

30

32

34

36

38

40

42

44

46

Pul

p Pr

oduc

tion

(Mill

ion

Tonn

es)

Number of Pulp Mills Pulp Production Trend in Pulp Production

+1.9 %


Pulp Production by CEPI Country in 2004

Finland29%

Rest of CEPI Countries

10%

Sweden28%

Austria5%

Spain5%

Portugal5%

Germany6%

Norway6%

France6%



Pulp Consumption by Region in 2003

CEPI Countries25%

Other Europe3%

North America37%

Asia28%

Rest of the World2%

Latin America5%



Trade Flows of Pulp to and from CEPI Countries in 2004

Other Europe: Exports to 310 Imports from 501


Rest of the World: Exports to 122 Imports from 300

Latin America: Exports to 19 Imports from 2,593

North America: Exports to 248 Imports from 4,296

'000 Tonnes


Pulpwood Consumption by Origin in CEPI Countries 1991 - 2004

0

20

40

60

80

100

120

140

160

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Mill

ion

m3

Domestic Imported


RECOVERED PAPER


Raw Materials in Papermaking in CEPI Countries 2004

Non-FibrousMaterials

15.1%

Recovered Paper41.1% Pulp Other

than Wood1.0%

Woodpulp42.8%



Evolution of the Recovered Paper Utilisation and the Recycling Rate in CEPI

Countries 1991 - 2004

0

5

10

15

20

25

30

35

40

45

50

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Rec

over

ed P

aper

Util

isat

ion

(Mill

ion

Tonn

es)

38

40

42

44

46

48

50

52

54

56

58

Rec

yclin

g ra

te (%

)

Recovered Paper Utilisation Recycling rate


Recovered Paper Collection Rate, Utilisation Rate and Utilisation in CEPI

Countries in 2004

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 20% 40% 60% 80% 100%Utilisation rate %

Col

lect

ion

rate

%

NO

SESK

CZ

PT

BE

AT

DE

FR

IT

UK

CH NL

ESHU

FI

PL GR


Recovered Paper Trade Balance by Country

-1000 -500 0 500 1000 1500 2000 2500 3000

AUSTRIA

SPAIN

SWEDEN

NETHERLANDS

SLOVAK REPUBLIC

FINLAND

HUNGARY

GREECE

ITALY

CZECH REPUBLIC

NORWAY

PORTUGAL

POLAND

SWITZERLAND

IRELAND

DENMARK

FRANCE

GERMANY

BELGIUM

UNITED KINGDOM

2000 2004

Net exporter

Net importer


Trade Flows of Recovered Paper to and from CEPI Countries in 2004

North America: Exports to 18 Imports from 241

Latin America: Exports to 16 Imports from 1


Other Europe: Exports to 359 Imports from 85

Rest of the the World: Exports to 70 Imports from 9

'000 Tonnes


Recovered Paper Utilisation by Sector in CEPI Countries 2004

0

10

20

30

40

50

60

70

80

90

100

1 11 21 31 41 51 61 71 81 91Share of total paper & board production (%)

Util

isat

ion

rate

(%)

Mixed Grades Corrugated and Kraft Newspapers and Magazines High Grades

Newsprint

Other graphic grades

Case materials

Car

ton

Boa

rds

Wra

ppin

gs,

othe

r pac

k.pa

per

Hou

seho

ld &

sa

nita

ryO

ther

s


Trends affecting the P&P Industry


Cyclic businessCyclic business with a downward trend of pricesLow profitability, overcapacities in many pulp and paper gradesStrong impact of exchange rate (ex : USD/Euro)


Companie's strategies (1/2)

Global business and global strategies (especially for commodity grades)Global companies in a process to refocus on a small number of grades Consolidation will continueInvestments close to the markets and or/in regions where production costs are lower e.g.: in the pulp sector: most of the investments are in South-America and Asia


Companie's strategies (2/2)Bleached Chemical Market Pulp- Main capacity expansion projects worldwide (with start-up by 2007-2008) (As of september 2005).

500Fray BentosENCEUruguay

1 000Fray BentosBotnia SAUruguay

1 130780Santa FeCMPCChile

1 140200Belo OrienteCENIBRABrazil

900*HainanAsia Pulp & Paper (APP)China

900*EunapolisVeracel (Stora+ Aracruz)Brazil

550*Zellstoff StendalMercerGermany

600Nuevo AldeaAraucoChile

440*ValdiviaArauco Chile

1 100150JacareiVotorantim Cel. e Papel(VCP)Brazil

Total Capacity (in case of new lines in existing mills) (000 t)

New Capacity (000 t)

MillCompanyCountry

* Realized


130

140

150

160

170

180

190

200

210

220

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Ave

rage

Siz

e ('0

00 T

onne

s)

210

220

230

240

250

260

270

280

290

300

Num

ber o

f Pul

p M

ills

Average Size Number of Pulp Mills

The average mill capacity will continue to growAverage Size by Pulp Mill (Capacity) in CEPI Countries

1991 - 2004


Forest certification still at a too low level

Forest certification is key for the P&P IndustryCertified areas (especially PEFC) are expandingVolume of certified wood remains too low in many countriesThe number of Chain of Custody also unsufficientDemand of certified pulp and paper products remains low from the consumer side


Wood for energy generation will increasingly compete with the

procurement of pulp mills

The use of biomass for energy generation (heat, electricity) is fostered by several drivers (subsidies, price of oil,…)Subsidies for biomass based energy might have adverse effects on wood procurement of pulp millsThis would jeopardize the competitiveness of pulp mills But the production of "green energy" on industrial sites also presents opportunities (e.g.: development of bio-refineries)


Conclusion

In Europe, production of paper and pulp continues to increaseGlobal competition also increasesProcess of consolidation will continue for commodity productsSome issues connected to fibre supply and marketing are key to the competitiveness: ability to sell certified paper products, no distortion of compettition between the various uses of wood (energy vs pulp and paper)

Pulp and paper markets in Europe - UNECE · China Asia Pulp & Paper (APP) Hainan 900* Brazil Veracel (Stora+ Aracruz) Eunapolis 900* Germany Mercer Zellstoff Stendal 550* Chile Arauco

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