European Boxboard Market

Transcription

1 European Boxboard Market Challenges Ahead CEPI Paper Week Brussels, November 2017 Alejandro Mata Senior Economist, European Forest Products Copyright 2017 RISI, Inc. Proprietary Information

2 Alejandro Mata Economist, European Forest Products Bachelor s degree in Engineering, MBA degree earned in 2007 Worked in the business and market intelligence segment for one of Europe s leading paper producers Has been analyzing and forecasting the industry since 2009 Author of the Paper Trader Europe and Paper Packaging Monitor Europe, the European Graphic Paper 5 Year and 15 Year Forecasts and the European Paper Packaging 5 Year and 15 Year Forecasts Copyright 2017 RISI, Inc. Proprietary Information 2

3 Boxboard Demand Growth Restrained China slowing % 8.0% Recession in Brazil Consumer spending down BOXBOARD DEMAND GROWTH (MILLION TONNES) % 4.0% 2.0% 0.0% % Influence of e commerce % Demand Change % Change Copyright 2017 RISI, Inc. Proprietary Information 3

4 Economic Tailwind Boosting Demand Copyright 2017 RISI, Inc. Proprietary Information 4

5 Europeans Consuming More More dining out 4.0% 3.0% 2.0% At home YEARLY PERCENTAGE CHANGE 1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Source: Eurostat Total Food Restaurants Copyright 2017 RISI, Inc. Proprietary Information 5

6 Mar 08 Jul 08 Nov 08 Mar 09 Jul 09 Nov 09 Mar 10 Jul 10 Nov 10 Mar 11 Jul 11 Nov 11 Mar 12 Jul 12 Nov 12 Mar 13 Jul 13 Nov 13 Mar 14 Jul 14 Nov 14 Mar 15 Jul 15 Nov 15 Mar 16 Jul 16 Nov 16 Mar 17 Jul Pharma Leading the Way Production in the EU Manufacturing Industry Pharmaceuticals Automotive Food & Drinks Manufacturing Machinery & Equipment Percentage change relative to the first quarter of 2008 Source: Eurostat Copyright 2017 RISI, Inc. Proprietary Information 6

7 But What If the Wind Changes? Copyright 2017 RISI, Inc. Proprietary Information 7

8 Europe s #1 Issue: Overcapacity Supply & Demand Growth % % % Demand Supply Operating Rate 89% 88% 87% Copyright 2017 RISI, Inc. Proprietary Information 8

9 Major Capacity Changes (Cartonboard) Tonnes per Year Kotkamills Folding Boxboard 400,000 (FI) Kama Pulp & Paper Folding Boxboard 220,000 (RU) Husum Folding Boxboard 400,000 (SE) Dobrush Virgin Cartonboard 200,000 (BLR) Gruvön Virgin Cartonboard 550,000 (SE) Copyright 2017 RISI, Inc. Proprietary Information 9

10 Europe s Boxboard Trade Surplus 4 3 World consuming more NET EXPORTS, MILLION TONNES W. Europe E. Europe Latin America North America China is changing Europe Asia Copyright 2017 RISI, Inc. Proprietary Information 10

11 Boxboard Demand in Key Regions Nearly a majority of world demand comes from Asia Large markets, fast growth Boxboard Demand (Million Tonnes) Large, mature markets Lower consumption levels, high growth Asia North America Western Europe Eastern Europe Latin America Middle East Africa Oceania Copyright 2017 RISI, Inc. Proprietary Information 11

12 Asia (China) Supply and Demand Growth in China China is the largest market in Asia, accounting for 60% of overall demand and most of the growth year over year Growth in capacity has slowed down to a fraction of what it was a few years ago Demand is also growing more slowly, leading to very low operating rates Demand Supply Copyright 2017 RISI, Inc. Proprietary Information 12

13 Chinese Capacity Growth Increasingly Concentrated in Ivoryboard Capacity expansions slowing down Increases concentrated on recycled grades in the past Focus is shifting towards virgin Capacity Growth, Thousand Tonnes Virgin Recycled Copyright 2017 RISI, Inc. Proprietary Information 13

14 Rest of Asia Also Becoming Saturated 2.0 Asia became a net exporter as of 2016 Asian Net Exports NET EXPORTS (MILLION TONNES) China Rest of Asia Net Exports Exports Imports Copyright 2017 RISI, Inc. Proprietary Information 14

15 Remember This? Production Copyright 2017 RISI, Inc. Proprietary Information 15

16 A Word on e Commerce Still growing rapidly Changing go to market for many companies Benefiting demand for fibre based packaging, mostly containerboard Copyright 2017 RISI, Inc. Proprietary Information 16

17 And Finally. Product Substitution According to Pouch Manufacturers Offers better visual properties and personalization?? Are cheaper to produce and buy?? More environmental friendly than boxes?? What has happened recently? Migration The industry agrees a solution is needed Actions have been initiated Packaging is not the only industry in the supply chain that needs to take action Copyright 2017 RISI, Inc. Proprietary Information 17

18 Questions? Copyright 2017 RISI, Inc. Proprietary Information 18

19 Thank you! For more information: European Paper Packaging 5 Year Forecast European Paper Packaging 15 Year Forecast Paper Packaging Monitor Europe Copyright 2017 RISI, Inc. Proprietary Information 19