Cultural Paper Market Trends (Part 2)

The largest production area for cultural paper is currently, its new production capacity will grow much faster than Southeast Asia. There are few plans for new capabilities for newsprint in North America and Western Europe. By 2000, North American net production capacity will drop by 200,000 tons per year, and plans for additional capacity have not yet been determined. The production capacity of newsprint in Western Europe will be only 469,000 tons per year, and the annual increase rate will be less than 0.9%. In addition, most of the above two areas still have many unresolved factors before the completion of most of the new production capacity.
Some large printing and writing paper projects in North America and Western Europe have been included in the plan, but they are still relatively small compared to the scale of development in Asian countries. The newly increased production capacity of printed and writing paper in North America was only 0.8% in 2000. However, Western Europe has a relatively high growth rate. By the year 2000, the annual production capacity will increase by 2.8 million tons, and the annual increase rate will be 1.8%. The newly added production capacity will be the category of coating, most of which will be put into production in 1998.
What are the constraints?
The traditional nature of the supply and demand cycle, and the consequent price fluctuations, especially in the industry in the past few years, may have suggested the use of commercial taxation measures to curb the development of future production capacity. Although this is a rare method in the history of industrial development, perhaps it may be appropriate. The timing for choosing to invest in new production capabilities is difficult. As investment continues to grow rapidly and brings with it huge risks, the main reason is that the scale of the company requires newly installed equipment to have world-scale competitiveness, so that investment will rise rapidly. In addition to considering financial factors, the development of future production capacity must also consider the supply of fiber raw materials. Globally, there must be sufficient fiber raw materials to support investment projects, and it is necessary to estimate in advance that there will be supply capacity for the next 10-15 years. This is not an issue that cannot be overcome. As far as the area is concerned, there are some issues to consider but it is not a big problem. In North America, Western Europe, and many Southeast Asian regions, the supply of coniferous wood is somewhat problematic, either because local resources are lacking or other considerations, such as environmental restrictions on the cutting of timber. It can be said that Russia has huge unexploited long fiber resources. As long as it is cost-effective to develop it economically, it may solve the problem of long fiber. At the same time, the shortage of fiber raw materials in production plants is also focused on the recycling of resources, or increase the use of secondary fibers. Here again, some restrictions are obvious. For example, it is impossible for the United States and Western Europe to provide long-term continuous supply of major fibers from Asian or labor insurance manufacturing plants. The limitations of recycling are increasing in Western countries. Although domestic use of secondary fibers is constantly increasing, this is by no means an elastic resource.
These constraints can slow down the growth of production capacity. However, it is not enough to stop or even reduce it. However, it has been mentioned earlier that the increase in production capacity has been significantly reduced, and if not even a long-term problem is the use of fiber raw materials, it is also a factor that will continue to restrict the development of production capacity in the medium term.
The significance of changing the supply model Finally, a brief comment on the significance of the change in the global cultural paper supply model. We believe that the globalization of industry has long appeared to be getting worse. So far, the globalization of corporate restructuring, mergers and acquisitions seems to be still in the ascendant stage. Here are a few examples to illustrate this development trend. For example: In the West, there has been a coalition of companies, and the union of companies between regions is ongoing. One example of the reverse development trend is that things happen in companies in underdeveloped regions that start acquiring companies in Western development markets.
It is fair and sensible to assume that the paper industry will continue its restructuring process, which occurred ten years ago. However, the direction and form of restructuring are hard to predict. The following situations may occur: Gradually forming a small number of truly global large companies. Many Western and Japanese companies have already become such large companies. Continue to strengthen regional strength. Further mergers, restructurings, and rationalization of unemployed companies between Western Europe and North American companies continue to evolve.
Some large-scale companies at the national level will appear in developing countries. China and India are following this line of development and there are already some prototypes. The question is whether state-owned enterprises will further strengthen into large-scale enterprises (such as China's situation) or whether large-scale Indian companies will occur. These companies tend to have more shares. The potential for further strengthening will be great, but it will largely depend on the country's policies, and it may also be related to the Western funds that have been obtained.
Developing countries are moving toward pulp and paper enterprises. This may become a major issue for corporate development. In some countries with rich fiber resources, such as South America, there are still pulp mills that do not develop into pulp and paper companies. This is also the case in countries with rich fiber resources in Southeast Asia, such as Indonesia, Malaysia, and Thailand, where there is almost a momentum. Pulp mills prefer to give timber suppliers more economic benefits, although this momentum can only be clearly demonstrated after 2000.
It is clear that the development of the world's cultural paper is still driven by moderate momentum, and the prospects are still growing. Most of the benefits come from opportunities. Opportunities are waiting for you. Whoever seizes the fastest growing global market seems to have the greatest chance of making a huge profit.