If 2020 has proven anything, it’s that you can never truly predict the future. However, we will endeavor to do so in today’s look ahead to 2030 and the paper and pulp industry. Will digitalization do away with paper? Not likely. New opportunities for growth and innovation promise an exciting future.
How the Paper & Pulp Industry is Evolving
2015 marked the first year that there was a decline in worldwide demand for graphic paper. That fall has continued in the five years since. However, the industry as a whole is still growing at a slow but steady pace.
Other products have filled the gap left by graphic paper, including packaging, tissue papers, and pulp for hygiene products. There is also a small but growing demand for textile applications. More research is being done into new applications of wood and its components in labs and development centers across the nation. This signals a big shift is on the way in the industry as it pivots to meet changes in demand.
The Effects of the Pulp & Paper Industry’s Consolidation Efforts
Many areas of the industry have seen large companies consolidate their chosen areas of focus. Globally, the largest pulp and paper companies have not grown very much, instead they’ve reduced in size in order to focus on fewer industry segments.
In some segments, the ownership concentration is close to reaching levels where further consolidation may not be approved by competition authorities.
In North America, the Coated Wood Free segment is the most highly concentrated, while the containerboard segment shows the least concentration. The companies in these segments are positioned for further growth through high margins and low debt.
The financial resources available to these companies represent a powerful force for change in the industry. How they utilize these resources will shape the industry in the decade to come. Because some of the companies have large war chests, they may be challenged to find opportunities that match their resources.
Shifts in the Pulp & Paper Market Demand Gearboxes, Mixer Drives & More
Demand is expected to grow for paper and board products within the next decade. While graphic paper (printing paper, writing paper, newspaper, etc.) will likely continue to decline, the demand for packaging and tissue products promises great growth. Some segments may grow more than others, but demand for fiber-based products is expected to increase globally.
Broken down into specific segments, these shifts maybe what to expect:
- Graphic papers should expect to see a continuing decline and pressure to restructure machines to packaging and specialty papers. Having the right Falk surplus gear reducers and parts to convert machines will be imperative to keeping operations competitive.
- Consumer packaging and tissue will be driven by demographic shifts and consumer trends, such as the demand for sustainable and convenience products. This demand will likely grow on par with GDP. In this segment, materials development will be key to driving innovation and staying ahead of the market. By ensuring that your operation has the gearboxes designed for the pulp and paper industry, fluid sealing solutions for paper companies, and appropriate mixer drives you can be well-positioned to take advantage of opportunities in this segment.
- Transport and industrial packaging will see similar opportunities for innovation and growth. 2020 has seen the rise of e-commerce drive the demand growth of transport packaging. New solutions in this industry will be needed to meet industry challenges like last-mile delivery, and sustainable packaging.
The Future of the Pulp & Paper Industry
There are many potential opportunities that the next decade might bring to the pulp and paper industry, but there will also be some challenges. Adaptability will be required and there is expected to be three major concerns that pulp and paper companies will have to tackle over the next decade:
- Managing short and medium-term industry turbulence
- Finding how to continue to optimize cost
- Finding new value-creating growth roles for forest products
Through it all, NW Industrial Sales, LLC is positioned to support the pulp and paper industry for all its needs to optimize and adapt to the changing industry. We offer a large inventory of Falk surplus gearboxes, gear reducers, and parts, and more than 70 years of combined experience serving paper and pulp and other industries.
You also gain access to our partnership with Rexnord for parts as well as a nationwide network of maintenance and our product repair and renewal services. We are available 24/7 to meet your needs, contact us today.
