Paper Industry: Tangible Recovery After the Crisis - Raw Material Costs Soaring

FRANKFURT, Germany, February 24, 2011 /PRNewswire/ -- Thanks to the very good development in terms of volume in 2010, the paper industry has managed extensively to recover from the economic crisis. Dr. Wolfgang Palm, president of the German Pulp and Paper Association, stated at the association's annual press conference that production and sales had risen over the year by more than 10 per cent to 23.2 million tons. This meant that the industry had already surpassed the pre-crisis performance in 2008. Sales rose in 2010 by 17 per cent to 14.4 billion euros, although company profits were considerably encumbered by soaring raw material costs, which rose on average in 2010 by over 80 per cent for recovered paper and almost 70 per cent for pulp compared with the 2009 figures. This development was bound to have an impact on the market and many companies announced that they would be following other industrial sectors and increasing their prices, said Palm.

Packaging papers saw a marked increase in volume. Production in 2010 was 13 per cent higher than in 2009 and also 9 per cent higher than in 2008. Graphic paper production also improved by 10 per cent, although it was still 5 per cent down on the 2008 level. The manufacturers of hygiene papers registered 6 per cent growth over 2009 while technical and speciality papers experienced a marked recovery with a 15 per cent improvement in 2010 after the heavy decline in 2009.

The driving force within the paper industry in 2010 was foreign sales, which performed better than domestic sales, improving by 15 per cent compared with just 6 per cent within Germany. Western Europe remained the largest foreign market. The industry is hoping this year for greater stimulus from the domestic economy.

    
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SOURCE German Pulp and Paper Association