Global trends towards resources

The formation of trends in the global pulp and paper industry has many causes. The dominant trend at present is a notable price fluctuation.

However, the facts leading to these results are not as simple, given the nature of forest resources worldwide.

The industry’s experience is that the key determinants governing the trends of the forest industry namely demand and supplies are undergoing a gradual transition.

Trends in the consumption of pulp and paper resources vary from the developed world to the developing world. The developed world shows a declining usage of paper as opposed to developing countries with a higher usage of paper for printing purposes.

Higher levels of infrastructure facilities and better living standards experienced by the developed world, especially high internet penetration and advancements in similar communicative devices that replace traditional paper, have resulted in this situation.

On the other hand, developing countries with less internet penetration and other hindrances towards advanced communication such as low IT literacy are more dependent on traditional paper based communication practices such as printed material.

However, the printing sector is not the only determinant of this trend. Instead, the packaging sector also accounts for a greater market share of pulp and paper resources worldwide.

The notable point is that developed nations use more resources for packaging purposes in comparison to developing nations, contrary to the developed nations’ trend of minimising newsprint and similar products.

Virgin and recycled resources are at the forefront in the market of packaging material.

This by no means implies the fact that the usage of paper in technologically advanced countries is less than that of the rest. Instead, the developed world accounts for 75 per cent of the world’s forest resource consumption at the moment. However, the growing trend is that it sees a gradual decrease compared to developing countries. All in all, hands-on experience in the industry assures that the overall demand for pulp and paper is still growing, worldwide.

In this backdrop the trends that we see in the production are not encouraging as it falls short of demand. Day by day the industry is experiencing a gradual reduction of the total products that enter the market.

This consequence can be attributed to several reasons. The reason that is dominant at present is the aftermath of natural disasters which hit Japan, which is one of the biggest suppliers of pulp and paper resources.

For example, after the recent tsunami and earthquake in Japan two Nippon Paper mills, Iwanuma mill and Ishinomaki mill, with a total capacity of 570,000mt, stopped operations. This is almost 16% of total paper production capacity in Japan.

The industry is experiencing similar drop outs worldwide with very few new entries to the production of pulp and paper.

AGINTL is a global trading entity in the industry that is constantly sensitive to market needs. Our longstanding experiences that have been mentioned earlier led us towards making a strategic shift in our primary focus from the developed world to the developing world to capitalise on the dominant consumption trends prevailing in the regions such as Asia and Africa.



(The writer is founder CEO of AGINTL Ltd. AGINTL represents the best names in the field of pulp and paper namely Norske Skog, April Fine, Abibow, SPB, Joenju, etc.)