Paper360 - January/February 2018 - 16
Sensing the Future
The paper industry is entering a transformational era, with the
bioeconomy representing "the greatest promise of our future."
This was the message from Peter Oswald, CEO of Mondi Group
and outgoing chairman of CEPI, the Confederation of European
Paper Industries. CEPI held its annual European Paper Week
event in Brussels in November, and Oswald was the lead-off
speaker for the event's high-level session titled "Sensing the
Future." The event offered an industry forecast that went well
beyond the coming year, and called for a major shift in the way
pulp and paper manufacturers view the market.
The pulp and paper industry is at the center of the bioeconomy,
Oswald said in his welcome address. Globally, public awareness
of climate change issues will continue to drive a desire to connect
with, and protect, the environment.
It's an idea echoed by keynote speaker Dr. Gunter Pauli, chairman of Novamont and author of The Blue Economy. He offered
examples of disruptive technologies that go beyond the traditional model of "value-added." For instance, in South America's
Patagonia forest, the largest area of biodiversity is not trees-it's
yeast, with more than 3,000 varieties, which can be used to produce a variety of products including beer, bread, and wine. "Do
pulp and paper companies consider themselves the caretakers of
yeast revenues?" asked Pauli. "No-but revenue can be made."
This thinking applies to the bioeconomy, which includes not only
traditional pulp and paper products, but chemicals, high-value
byproducts, foods, and fuels.
In the future, shareholders will demand multiple product
streams as the only viable investments; the key to taking advantage of these value streams will be integrated cash flow models,
Pauli said. "We don't need innovation that changes one product
Dr. Gunter Pauli: "If you want to be an innovator, you need to be able
to align business opportunities with an existing asset base."
Photo credit: CEPI
into a bioproduct-we need innovation that changes the entire
business model for long-term success. The pulp and paper industry is still very much a commodity-based industry, but that is
why the opportunity is so big."
Also speaking in the session was Sylvain Lhôte, CEPI's director general. Earlier this year, CEPI released the newest version
of its 2050 Roadmap, which details the pathways and investment needed to cut member companies' carbon emissions by
80 percent while creating 50 percent more added-value. Lhôte
reported that, when he presents the Roadmap to various groups,
he always gets the same two questions. "People never ask 'What is
it?' or 'Why do this?'," he said. "I think this reveals true industry
alignment to the Roadmap's goals. Instead, everyone asks 'Where
are the investments happening?' and 'How do we finance this
The Roadmap projects the need for increased investment of
44 billion euros (US$52.2 billion)-about 40 percent more than
current levels-to transform the industry in Europe and lead the
low-carbon bioeconomy by 2050. The industry, and the world,
are at a crossroads, Lhôte explained. "How do we spur a circular
bioeconomy in Europe? CEPI wants to provide the Roadmap."
Global P&W paper demand has declined steadily
with mechanical grades the hardest hit (Fig. 5).
In 2017-18 the decline in demand for P&W paper
should slow, but it varies by region: for example,
North America at -2.4 percent; Western Europe
at -4 percent; Eastern Europe at 1.4 percent; Latin
America at 0.4 percent; and Asia remaining neutral.
Newsprint is still on the decline globally. The
decline in demand for newsprint in North America
is accelerating, but capacity closures have allowed
for some recovery in prices. The decline in magazine
advertising pages is the main factor driving down
paper use. As producers look to new markets to
try to sell their paper, governments are increasingly resorting to tariffs to stem the tide of imports.
Changes in capacity through 2019 show a net decline
of 2.8 million metric tons.
Fig. 5: The decline for P&W grades began in 2008; mechanical grades have been the hardest hit.
Graeme Rodden is senior editor, North and South
America, for Paper360°. You can reach him at