Pandemic Accelerates Decline In Paper Products Industry, Resulting In Mills Being Shut Down

The Business Research Company’s Paper Products Global Market Report 2021: COVID-19 Impact and Recovery to 2030

The COVID-19 pandemic has accelerated the rapid decline of the paper industry, causing manufacturer Stora Enso to close down two of its paper mills and thus reduce its paper production capacity by over a third[i]. According to TBRC’s paper products report, the outbreak of the coronavirus disease acted as a massive restraint on the paper products manufacturing market in 2020 as supply chains were disrupted due to trade restrictions and consumption declined due to lockdowns imposed by governments globally. Steps by national governments to contain the transmission have resulted in halting of manufacturing activities and a decline in economic activity with countries entering a state of lockdown and the outbreak is expected to continue to have a negative impact on businesses throughout 2020 and into 2021. This, along with several industries and business activities adapting to the situation by becoming virtual, limits the paper industry.

Stora Enso, based in Finland, is a manufacturer of pulp, paper and other forest products. The company has had to make the unfortunate decision of closing down two of its paper and pulp mills due to the immense decline in use of paper products globally. Thus, the company plans to reduce its paper production capacity by shutting these two mills, one in Sweden and the other in Finland[ii], shifting to the use of cardboard, biomaterials, and wood instead, which remain profitable.i

As per data on the Global Market Model, the global paper products market is expected to recover from the crisis and grow from $837.6 billion in 2020 to $885.6 billion in 2021 at a compound annual growth rate (CAGR) of about 5%. The growth is mainly due to companies rearranging their operations and recovering from the COVID-19 impact. The market is then expected to reach $1080.4 billion in 2025 at a CAGR of 5%.

Asia Pacific is the largest region in the global paper products market, accounting for 35% of the market in 2020. North America is the second largest region, accounting for 26% of the global market. Africa is the smallest region in the global paper products market.

The paper industry has been shifting from labor intensive manufacturing processes to automated production facilities. Automation has enabled paper product companies to enhance productivity and reduce production costs. These technologies are also saving energy costs. Control systems such as integrated drive systems (IDS) are improving plant efficiency by minimizing energy consumption and simplifying service and maintenance processes. For instance, Stora Enso had partnered with Siemens to automate its Skoghall facility.

Other major companies in the paper market include Georgia-Pacific Corporation, International Paper Company, Kimberly Clark Corporation, Tetra Laval Group, and Svenska Cellulosa Aktiebolaget.

 

About The Global Market Model

The Global Market Model is the world’s most comprehensive database of integrated market information available. The ten-year forecasts in the Global Market Model are updated in real time to reflect the latest market realities, which is a huge advantage over static, report-based platforms.

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[i] https://on.ft.com/32M375F

[ii] https://bit.ly/3veFyyg

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