Industry Statistics Confirm Paper Consumption Shrinkage
02-04-2013
  
The IndustryEdge 2012 statistics below do show consumption shrinkage in most segments of printing and packaging, however in respect to packaging and to a lesser extent paper from Internet purchased imports are not accounted for but would still  reflect overall industry shrinkage in the paper industry.
 
As a major industry indicator the largest sheet fed printer Gresham Private Equity with 1200 employees comprising Veta in Melbourne and Geon in Sydney were both placed in receivership Wednesday February 20thbefore being taken over by KKR . This follows on from the Champ`s exit from Blue Star both totalling $500 million in losses so there is little doubt that large print groups are hurting and suffering from their decrease in traditional demand. Energy costs are being felt by everyone and no doubt the carbon tax is slowly flowing into manufacturing costs.
 
The high Australian dollar we know is also hurting Visy and Amcor prime board exports and with domestic mill closures further downward price pressures will be felt. Fortunately export prices have been reasonably stable as sold in US dollars but when costed back into A dollars the lower levels are not helping struggling waste paper packers.
 
Whilst demand for low quality waste grades remain strong, environmental inspections and consumer audits are resulting in claims for moisture, outthrows, and prohibitives. MRF processing remains flawed and when the most modern MRF`s can only produce an ONP grade with 8-16% outthrows and prohibitive, which will only get worse with the reduction of newsprint consumption, the question must be again asked are expensive MRF`s now cost effective? Premium prices are being paid for better quality. Fiber yield is now being taken very seriously and during these bearish cycles better quality is being rewarded.