Contenu connexe Similaire à The Packaging Revolution: Adjusting to the New Dynamics in Europe and the World (20) Plus de EuropeanPaper (20) 1. The Packaging Revolution:The Packaging Revolution:
Adjusting to the New Dynamics
in Europe and the Worldin Europe and the World
Alejandro Mata
E i E F P dEconomist, European Forest Products
November 2015
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2. Alejandro Mata, Economist
E F t P d tEuropean Forest Products
• Bachelor’s degree in Engineering,Bachelor s degree in Engineering,
MBA degree earned in 2007
• Worked in business and market
f f fintelligence functions for one of
Europe’s leading paper producers
• Have been analyzing andHave been analyzing and
forecasting the industry since 2009
• Author of the Paper Trader Europe,
the Paper Packaging Monitor
Europe, the European Graphic and
Packaging Paper 5-Year and 15-Yearg g p
Forecasts
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3. What We Will Talk About?
Current conditions
T j ti Two-year projections
Capacity changes
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5. Is Global Containerboard Still Growing?
10%180
6%
8%
120
140
160
2%
4%
80
100
120
illions
0%
2%
40
60
80
Mi
-4%
-2%
0
20
40
Volume (L)
Percent Change (R)
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01 03 05 07 09 11 13 15 17
6. Emerging Markets Are Growing Faster
10.0%180
Emerging Markets
6 0%
8.0%
140
160
Emerging Markets
Mature Markets
Global Growth (R)
4.0%
6.0%
100
120
ons
0.0%
2.0%
60
80
Millio
4 0%
-2.0%
0
20
40
6
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-4.0%0
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
7. Allowing Them to Gain Relevance
32% 19%
25% 21%
32% 47%%
7% 8%
4% 5%
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Apparent consumption share of the total: 2000 vs. 2014
8. But Even They Are Slowing Down
10%
2001-2008
6%
8%
2001 2008
2012-2017
4%
6%
2%
-2%
0%
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World North
America
Europe Far East Latin
America
All Other
10. Mind the Gap
120
100
110
90
100
Emerging Europe
80
Western Europe1.2
1.4
onnes/GDP
60
70 Non-Durable
Industrial Production
1
ThousandTo
Usage Rate (R)
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60
01 02 03 04 05 06 07 08 09 10 11 12 13 14
0.8
01 03 05 07 09 11 13
11. EU Corrugated Box End Uses
Beverages
DurableDurable
32%32%
Beverages
32%32%
F h P d t
NonNon--durabledurable
68%68%
Fresh Products
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Foodstuff
13. peern Europ
100%€ 700
Production Cost Operating Rate
–Weste
90%
95%
€ 500
€ 600
(Virgin)
80%
85%
€ 400
€ 500
erboard
75%
80%
€ 300
Contain
70%€ 200
2010 2011 2012 2013 2014 2015 2016 2017
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14. pe
• Demand relatively flat for the next two years
ern Europ
Demand relatively flat for the next two years
–Weste
• Western Europe becoming more self-sufficient
thanks to Varkaus conversion
(Virgin)
• Operating rates rising right now due to import
substitution
erboard
• Conversions will bring rates down as of next year
Contain
• Profitability might trend down due to weakening in
the supply and demand balances
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• Profitability still higher than for recycled grades
15. Import Duties in Turkey
T k i i ADDTurkey imposing ADD
- 20% (CIF value) for US imports of
unbleached kraft linerboard, 175 g and less
- Started in July 2015
- Companies affected: IP, RockTenn
US exports down 52% (July)
US di ti t tUS redirecting exports to:
- Latin America and Emerging Europe
- Other southern EU countries like Italy and
Spain
Big benefits for:
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g
- Any company selling in Turkey
16. ope
22 000
23,000
Capacity Demand Production
tern Euro
20 000
21,000
22,000
d) –West
18 000
19,000
20,000
(Recycled
16 000
17,000
18,000
rboard (
15,000
16,000
2010 2011 2012 2013 2014 2015 2016 2017
Containe
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C
17. ope
100%€ 600
Production Cost Operating Rate
tern Euro
95%€ 500
d) –West
90%€ 400
(Recycled
85%€ 300
rboard (
80%€ 200
2010 2011 2012 2013 2014 2015 2016 2017
Containe
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C
18. ope
• Recycled packaging grades growing the most
tern Euro
Recycled packaging grades growing the most
going forward
d) –West
• Exports need to rise due to strong capacity coming
on line; however, world becoming more saturated
(Recycled
• Operating rates stable for the time being
• As of next year rates will start to come down a bit
rboard (
• As of next year, rates will start to come down a bit
due to conversions (covered later)
Containe
• Profitability still impacted by lower operating rates
and higher recycled fiber costs
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C
g y
19. Why So Much in Recycled Containerboard?
European Demand TrendsEuropean Demand Trends
Market Concentration
World Trends (trade flows)
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20. Major Capacity Changes (Containerboard)
SKG Towsend Pro Gest
Stracel
270,000 (FR)
Conversion (LWC)
SKG Towsend
Lightweight (UK)
Conversion (recycled)
Varkaus
Pro-Gest
420,000 (IT)
Conversion (Newsprint)
Aviretta
200,000 (DE)
Conversion (SC)
Kraft and White Top
390,000 (FI)
Conversion from UWF
Parenco
385,000 (NL)
Conversion (Newsprint)
2014 2015 2016
HHusum
Kraft White Top
300,000* (SE)
Conversion (CWF)
Leipa
290,000 (DE)
Conversion (Graphics)
Hinojosa
90,000 (ES)
Conversion (Graphics)
Kipas
Lightweight
Modern Karton
400 000 (TK) Two New Machines in 2017
Virgin
Recycled
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Lightweight
400,000 (TK)
400,000 (TK) Two New Machines in 2017
• Hamburger – 450,000 (DE or TK)
• Schoellershammer – 250,000 (DE)
21. European Demand Trends
Is cartonboard in
140
150
Is cartonboard in
secular decline?!
120
130
100
110
80
90
Containerboard
C t b d
60
70
80 Cartonboard
Newsprint
P&W
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60
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
22. Market Concentration
Top 5 Next 5 Other
Kraftliner
74%
22%
• Clear(er) leadership
• Overall steeper industry cost curve
• Top players dominating the cost curve
4%
Top players dominating the cost curve
16%
Top 5 Next 5 Other
Recycled Containerboard
• No clear leadership
38%
46%
• No clear leadership
• Smaller gap between the first and
fourth quartiles on the industry cost
curve
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46%
• Easier to secure an attractive position
onthe industry cost curve
23. World Trends (Trade Flows)
North America – Net Exporter
Capacity Expansions
?
Capacity Expansions
(Boxboard)
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Not many clear opportunities for Europe
24. World Trends (Trade Flows)
LightweightLightweight
North America – Net Importer
Less capacity
buildup globally
Warning! Global market becoming more
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Warning! Global market becoming more
competitive
26. Is Global Boxboard Growing?
10%70
6%
8%
50
60
2%
4%
30
40
illions
0%
2%
20
30
Mi
-4%
-2%
0
10 Volume (L)
Percent Change (R)
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01 03 05 07 09 11 13 15 17
27. Emerging Markets Growing Faster
10%70
Emerging
6%
8%
50
60 Mature
Global Growth (R)
2%
4%
30
40
illions
0%
2%
20
30
Mi
-4%
-2%
0
10
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01 03 05 07 09 11 13 15 17
28. But Even They Are Slowing Down
10%
2001-2008
6%
8%
2001 2008
2012-2017
4%
6%
2%
-2%
0%
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World North
America
Europe Far East Latin
America
All Other
30. en Europe
100%€ 1,100
Production Cost Operating Rate
–Western
90%
95%
€ 900
€ 1,000
(Virgin) –
80%
85%
€ 700
€ 800
nboard (
75%
80%
€ 600
€ 700
Carton
70%€ 500
2010 2011 2012 2013 2014 2015 2016 2017
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31. e
• Demand will remain relatively flat for the next
n Europe
Demand will remain relatively flat for the next
two years, at least in Western Europe
• Net exports rising for the moment
–Western
Net exports rising for the moment
• Europe needs to raise net exports to help digest the
conversions of Kotkamills and Husum
(Virgin) –
• Operating rates rising right now mainly thanks to
i i t d b tt d d i E
nboard (
increasing exports and better demand in Europe
• Conversions will bring rates down as of next year
Carton
• Margins under pressure due to conversions
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33. pe
100%€ 700
Production Cost Operating Rate
ern Europ
95%€ 600
–Weste
90%€ 500
ecycled)
85%€ 400
board (R
80%€ 300
2010 2011 2012 2013 2014 2015 2016 2017
Cartonb
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34. pe
• Demand will remain practically unchanged
ern Europ
Demand will remain practically unchanged
during the next two years
–Weste
• Net exports also not predicted to change much
during the next two years
ecycled)
• Operating rates will continue to move down thanks
board (R
g
to added capacity and flat demand requirements
Cartonb
• Weakening of supply and demand balances most
likely to impact margins
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36. Main Challenges for Europe
In Europe
• Overcapacity
•Active expansion
in global marketsin global markets
•Net exporter of
virgin boxboardvirgin boxboard
•Demand also
struggling
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38. Thank you for your attention
For more information:
China Boxboard Study –
2014 U d t
For more information:
2014 Update
www.risi.com/chinabox
Coming Soon!g
2015 World Boxboard Study
www.risi.com/worldbox
38 © Copyright 2015 RISI, Inc. | Proprietary Information
