2009: The Pulp and Paper Industry in retrospect

LONDON, Dez. 22, 2009 (Viewpoint) - As we near the end of first decade of the "noughties" how has the pulp and paper industry fared?

Well, it certainly hasn't been boring, in fact a good description would be traumatic, but uneventful certainly not. One thing is for sure, the industry is as fragmented as it ever was, this despite all the mergers, acquisitions, takeovers and closures over the last 10 years.

An example of this fragmentation is made apparent by the industry's still dire image in the eyes of the public. It does seem that no matter what attempts are made at giving the image of the industry a makeover, something comes along to throw mud at it - and mud sticks. Take the black liquor saga in the US. This would have been a prime opportunity for the public to see that the paper industry has been using green fuels for decades, instead, it comes out worse off because it is accused of exploiting a tax loophole, and worse, it has also been accused of adding fossil fuels to its mix to obtain the credits. And then, to add insult to injury, recycled mills in the US - ones that interestingly haven't had the windfall - publicly attack the mills that have, accusing them of deforestation! Talk about biting the hand that feeds - let's see how long a recycled mill lasts without the benefit of good quality recovered paper with a proportion of virgin fiber in the mix.

The problem with all of this of course is that, to borrow a well worn phrase, when a paper mill sneezes, the whole of the industry catches a cold. We should have all learned that by now.

The power of marketing

And the subject of virgin fiber, or rather the certified sources of where it comes from, has been another dominating factor of the last 10 years. In fact, I have to be honest, I had not even heard of FSC when I first joined the paper industry in 2000, now you can't escape from the three little letters. Hats off to the NGO's on this one, as they have not only marketed the "brand" FSC to the end consumer, but they have opened the door to other certification systems as well, for instance PEFC even though they (the NGOs) still fail to acknowledge the scheme.

The road to FSC certification, particularly in Europe, has been a rocky one of the last 10 years. When the scheme was first bandied about in the pulp and paper industry, there was a virtual religious opposition to it, especially from the Scandinavians. However, slowly but surely, and one by one, opposition to the scheme has petered out and has now virtually died a death altogether as large organisations realise the power of consumer marketing - the latest being pulp market pulp giant Södra which only a couple of years ago was vehemently opposed to signing up to the scheme.

The fight now moves onto another continent, namely Asia, and in particular Indonesia where is seems the whole world of NGOs, and their wives are down there camped at pulp and paper companies mill entrances and watching their every move. It will be a really interesting spectacle to watch over the next decade as Indonesia is a special case and is also gaining the attention of big banks looking to set up "commercially financed avoided deforestation projects" to help with the effects of climate change by selling off carbon credits. Merrill Lynch is the first, and has pledged to invest millions in the country over the next four years.

The concrete jungle - and the future

In the developed world, paper companies might not have done a fantastic job of marketing their credentials to the general public, but in the last decade vigorous amounts of work have been carried out on the ground, face to face in the concrete jungles, getting the message across about sustainability. Speak to a major print buyer or publisher now, and they will tell you all about FSC, PEFC, carbon footprint and recycled content. These buyers are now even getting interested in the whole life cycle of the paper, including how much energy a paper mill sells back to the national grid.

Now that the sustainability message has got across in the developed world, particularly when it comes to moving large amounts of paper, a new challenge has loomed to keep us all busy over the next decade. Those at the coal face, the hardened individuals who actually sell the products to the bigger users, are encountering a completely new phenomena. They are being asked to prove the return on investment of using paper as opposed to electronic media. This stems from marketers budgets being slashed in the recent turbulent economy, at the same time as having to share what is left with the new media. That should keep us all busy. Clearly, there is going to be plenty more to report on in the coming decade, let's just hope there is some good news.