Production and consumption are rising in Asia
World production of paper and paper board totals some 390 million tonnes. Growth is the most rapid in Asia, thanks mainly to the quick expansion of industry in China. Asia already accounts for almost 40 per cent total world paper and paperboard production. The share of North America, by contrast, is contracting.
Consumption is growing
Consumption of paper and paperboard is increasing even more rapidly in Asia, in China especially. Asia already accounts for 40 per cent of global consumption, while EU and North America account for about one quarter each.
Per capita consumption of paper and paperboard varies significantly from country to country and regionally. On average, one person uses about 60 kilos of paper a year; the extremes are 265 kilos for each US resident and some seven kilos for each African.
Only around 40 kilos of paper per person is consumed in the populous area of Asia. This means that Asian consumption will continue to grow strongly in the coming years if developments there follow the precedent of the West. In Finland, per capita consumption of paper and paperboard is about 200 kilos.
Overcapacity in Europe
Rapid growth in Asian paper production in recent years has increased the region’s self-sufficiency, narrowing the export opportunities available to both Europeans and Americans. Additionally, Asian paper has started to enter Western markets– from China in particular. Global competition has intensified noticeably as the new entrants’s cost level is significantly lower than in competing Western countries.
The European industry has been dismantling overcapacity by shutting down unprofitable mills. In total, over five percent of the production volume in Europe has been closed down in the last couple of years.
China is increasing production and exports
Globally speaking, the products of the forest industry are primarily consumed in their production country, so it can be considered a domestic-market industry. The largest trade flows are between the countries of Central Europe as well as between the Nordic countries and Central Europe. Additionally, a lot of Canadian paper is exported to the United States. In Asia, Korea is a significant exporter.
The most significant intercontinental trade flows are directed from Europe and North America to Asia, from Europe to North America as well as from North America to South America.
The industry’s profitability has to be improved
Globally speaking, the profitability of paper industry companies has been weak in recent years. Overcapacity has led to falling prices and this, coupled with rising production costs, is gnawing at the sector’s profitability.