Operational environment

At the turning point 

Globally, some 370 million tonnes of paper and board is produced annually. During the last decade, production volumes have grown the fastest in Asia, particularly in China.
 
The global average paper and board consumption per capita is about 55 kg. The strongest demand growth for paper and board is presently in Asia and Eastern Europe. The global growth is expected to continue in all main paper and board grades.
 
After the turn of millennium, the profitability of the European paper industry has significantly weakened, mainly due to the decline in paper prices, heavy cost inflation and unfavorable currency rates. The industry has suffered from the overcapacity, which has led to the closure of a significant amount of the capacity since 2006.
 
The market balance in Europe for primary fibre board is better than the paper grades.
 
In all main paper and board grades, there is a clear need for price increases to cover the cost inflation experienced during the past few years and to increase the industry’s profitability. Companies in the industry continue to focus and specialise on certain grades where they intend to improve their market positions. The best potential to expanding to new end uses appears to be in the fibre packaging business.