Karjala Pulp believes that Russia has all chances to become number one on the world newsprint markets.
On the 21st international Adam Smith Institute conference “Pulp & Paper in Russia & CIS 2016”, during strategic expert discussion Deputy CEO Karjala Pulp Dmitry Turkevich tried to define a role of Russia in creating the world pulp and paper market.
First ideas expressed were quite optimistic saying that the market will still live for the next 7-10 years. The speaker believes that serious industry problems can touch off a war for market shares. However, most experts view it favorably saying that such intense competition can mobilize for struggle for high quality. Here important are also the government participation and support.
During the meeting, the idea that in the nearest future the world newsprint market will decline by 4 % a year was called into question. Not everything is so clear here and we need to analyze the existing markets more thoroughly. For example, markets with developed economies still have the highest rates of newsprint consumption per capita, though they are considered lost due to the large-scale computerization of society. The annual consumption rate in the US, Japan, Canada and other countries is 13 to 35 kilograms per capita. Whereas in India, Brazil, China, Russia and other countries with developing economies, it is 1 to 5 kg per capita per year and is going up.
According to Dmitry Turkevich, we shall not forget that newsprint production cost in developing countries where almost a half of all productive capacities are located is much higher than in Russia or China. Especially for this reason, the world manufacturers redesign papermaking machines to produce something more promising – mostly light packing paper. In 2015, the market lost capacities of 1,9 million tons newsprint. In 2016, manufacturers got rid of 500 thousand tons. According to some reports, in 2017, the leading world brands are planning to reduce capacities totally for 1 million tons.
“On the one hand, we see a decline in newsprint consumption, though it’s not so rapid as analysts forecast. On the other hand, the world manufacturers shut down or redesign the mills. For example, in 2014 we saw overproduction of newsprint: 29,3 million tons were produced, but only 28,4 million tons were consumed. Now Russia ranks world’s second newsprint exporter and it is quite possible that very soon we will be the first. Already now, pulp and paper mill Kondopoga, being the largest newsprint mill in Russia and Europe, produces 3% of all world newsprint”, said Dmitry Turkevich