Global paper consumption is at a record high level and it will continue to grow. The Finnish forest industry could hold on to its position if its competitiveness is secured. There are 49 pulp and paper mills in Finland.
Paper production and consumption growing in Asia
Approximately 400 million tonnes of paper and paperboard are produced globally. Growth is fastest in Asia, mostly due to China’s rapidly-expanding industry. Asia already accounts for well over a third of global paper and paperboard production. Meanwhile production in North America is shrinking.
Paper and paperboard consumption continues to grow in Asia, especially in China. Estimates suggest that global paper consumption in 2025 will amount to 500 million tonnes, which means growth of about 1.6% a year. Asia’s share of global consumption is already 44%. Europe and North America account for almost a third of consumption. Demand in Eastern Europe is also growing faster than in traditional markets.
Per capita paper consumption growing
Per capita paper and paperboard consumption varies a great deal by country and region. The global average is about 55 kilograms of paper per person, with the extremes being the US’s 300 kilos and Africa’s about seven kilos.
In densely-populated areas in Asia, paper consumption amounts to only approximately 35 kilos per capita. This means that there is massive growth potential in Asia, if development follows the same trajectory as in the Western industrialised countries. In Finland in 2011, paper and paperboard consumption amounted to about 194 kilos per capita.
Consumption of graphic papers falling in Western countries
In 2012, 39.9 million tonnes of graphic papers were manufactured in Western Europe, of which Finland accounted for about 17%. Over 70% of printing paper is consumed in Western Europe and North America.
In Western Europe in 2012, packaging paper production amounted to 41 million tonnes. Finland accounts for about 9% of packaging paper and paperboard manufactured in Western Europe.
In 2012, a total of approximately 10.7 million tonnes of paper and paperboard was manufactured in Finland. Of this, 6.6 million tonnes was printing and writing paper (including newsprint). About 65% of Finland’s printing and writing paper production uses mechanical pulp. Printing paper is used in, for instance, magazines, brochures and publications.
Overcapacity in Europe
The fast growth of Asian paper production in recent years has increased the region’s self-sufficiency and reduced both Europeans’ and North Americans’ export opportunities. Moreover, Asia – especially China – has started to export paper to markets in the west. Because costs are much lower in new producer countries than in competing countries in the West, global competition has become considerably tougher.
The sector’s profitability must be improved
At the global level, forest industry companies’ profitability has been weak in recent years. Product price drops due to overcapacity combined with rising production costs have weighed on the sector’s profitability worldwide.