Exclusive outtakes from industry leaders
The global paper industry has struggled for more than six years to claw its way out of a slump, as soft demand and overcapacity have kept prices down, leading to poor earnings, production curtailments and layoffs.
The current global downturn has further eroded demand for basic materials, including paper, as print advertising has dropped steeply in the crisis. Companies have been forced to run just to stand still, temporarily or permanently shutting mills and axing staff.
The sector is now at a crossroads. Will businesses after the recession look roughly the same, only smaller? Will demand ever return when electronic books and newspapers are surging? With many forestry companies big producers of biomass, what role will green energy play in the future?
Overcapacity has kept a lid on paper prices for years, while increasing costs of wood and energy have eaten into the paper makers’ already low margins.
Combining paper and packaging production may seem like the obvious union, but head of Finnish packaging maker Huhtamaki said it proved time and again to be a money loser and his company will not go that route.
Huhtamaki manufactures a wide array of food and beverage packaging and other packages for industry. It buys raw materials from forestry companies and converts them into packages.
Chief Executive Jukka Moisio told a Reuters Paper Industry Summit in Helsinki that packaging a product actually reduces the amount of waste used rather than creating it.