Economic Aspects of Paper

In 2002 the world production of paper and board was ca. 331 V 106 t. Although paper and board are used in some form or other in all parts of the inhabited world, the production is left to a limited number of countries. More than 9000 paper machines are responsible for production in 111 of the approximately 200 countries in the world, whereby the 15 largest producer countries alone account for 82 % of total world production (Table 1.2).

The various requirements for the production of paper are not met everywhere. For instance, suitable raw materials must be available, including water, energy, and trained personnel. Furthermore, the construction of paper mills requires a very high investment, and a sufficiently large market and a favorable location are both essential prerequisites for economic papermaking. For these reasons, the modern paper industry is based mainly in the coniferous forest zone of the Northern Hem¬isphere, with centers in Europe, North America, and in Japan.

World paper production has increased more than sevenfold since 1950 when production was ca. 44 V 106 t (Table 1.3). During this time, the regions which did not belong to the classical paper producing countries – above all China – have come to the fore, and their share of world production grew from ca. 3 % in 1950 to 13 % in 1980, and to 30 % in 2002. At the same time, the circle of paper producing countries has widened considerably from 61 to 111 and now includes a large num¬ber of developing countries. In these countries, the tendency towards self suffi¬ciency is influenced by national economic considerations and the need to save foreign exchange for paper imports (Table 1.2).

In 2002, Europe, North America, Japan and China produced 82 % of the total world production (Table 1.3). However, the development in these regions has var¬ied considerably. China’s paper production has increased more than threefold since 1980 and it is now the second largest paper producer in the world. In Japan, the paper industry has developed from a low during the postwar years to become the third largest paper producer. In the last four or five decades, Western Europe has more or less been able to maintain its share of world production. North Amer¬ica has had to accept large losses of its share of production, which has, however, been increasing relatively constantly (Table 1.4).

In 2002 graphic papers accounted for 43 % of total paper production. This in¬cluded newsprint (37 V 106 t) and other printing and writing papers (104 V 106 t). The production of packaging papers was 153 V 106 t, and that of the remaining papers and boards was 37 V 106 t (Table 1.5).
At present, a nearly one-third (100:330) of the world production of paper and board is sold across borders. In 2002 exports and imports accounted for about 100 V 106 t.

The net imports to the United States, i. e. imports minus exports, amount to
7.3 V 106 t which corresponds to a quota of 8 % (based on the consumption). In contrast, Canada with its comparatively low population, has net exports amounting to 12 V 106 t which is 60 % of its paper production. The major part of Canadian exports goes to the United States. Western Europe with 9.5 V 106 t, a quota of 11 %
(based on the internal production) is a net exporter. Western Europe as a whole has more than 380 V 106 consumers and is the largest market in the world.

In Japan the amounts imported and exported balance out at ca. 1.5 V 106 t. China is a net importer with 4.8 V 106 t, a quota of 11 %. Of the remaining regions, the countries in Africa and Asia are the largest net importers. The imports and exports of South and Central America are roughly balanced.

World consumption of paper and board in 2002 was 331 V 106 t. The United States has by far the highest consumption of all countries, followed by China and Japan. Germany is the fourth largest consumer, above the United Kingdom (Table 1.6).
Looking at the world paper consumption from a geographical point of view, it is apparent that the industrial countries of Western Europe, North America, and Japan not only produce but also consume the bulk of the paper (Table 1.7).

There is also a relatively rapid increase in the consumption of paper in the remaining regions, especially in Asian countries such as China, South Korea and Taiwan, which are becoming increasingly important for the international paper market. In the past 40 years, countries in South and Central America as well as in Eastern Europe and Africa have increased their share of world paper consumption annually. Improvements in the living conditions in these regions have been ac¬companied by a corresponding increase in the consumption of paper. The rise in both the standard of living and the individual income is as important a prereq¬uisite as the spread of literacy for the consumption of writing paper and printing products. Another important factor is the build up of export and consumer in¬dustries with their demand for packaging materials.

The amount of paper consumed, however, is not an adequate measure of the standard of living of a country. The relative per capita consumption can only give a very rough indication of the living standard because other factors such as the average income, way of life, and consumer patterns must also be taken into con¬sideration. In terms of paper consumption, the countries can be grouped accord¬ing to their per capita consumption. For example, while the average consumption in Western Europe is 204 kg and in North America 280 kg, the per capita con¬sumption in Eastern European countries is 36 kg, in Latin America 33 kg, and in Africa only 7 kg. Paper consumption per inhabitant is less than 1 kg in about 25 developing countries.
A comparison between population and paper consumption in different regions shows that Asia, which represents 60 % of the world population, accounted for only 34 % of world paper consumption. Conversely, North America has 5 % of the world’s population but a consumption of 29 % (Table 1.8). An important indicator for the development of paper consumption is not only the gross national product but also the population growth (Table 1.7).
World population has more than doubled from 2.5 V 109 in 1950 to 6.2 V 109 in 2002. The per capita consumption of paper worldwide was 18 kg in 1950 and 53 kg in 2002, an increase of 294 %. Thus the relative consumption of paper per capita has increased considerably faster than the world population. It is obvious that these average global values do not reflect the substantial regional differences.

In summary, the largest growth percentage potential for paper consumption is in the Third World countries, especially in Asia and Eastern Europe, while industrialized countries such as the United States, Japan, and the Western European countries have relatively low growth rates, but still represent, in absolute terms, a considerable market potential.