Visions for pulp and paper industry E-Book

Pekka Niku

• Herausgeber: Books on Demand
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 86

Veröffentlichungsjahr: 2022

Beschreibung

We are living in turbulent times. The industry needs visions and strategic scenarios on how to navigate into the uncertain future. Uncertainties can be turned into opportunities. The key topics discussed in this book are: what are the mega trends, specific trends and weak signals affecting the global pulp and paper industry? How is the operating environment changing? What is happening to the plastic to paper trend? What are the opportunities and risks of the future? The book is based on Pekka Niku's over 40 years' practical experience as a forest industry consultant. Time span of the visions is up to 2035, and beyond.

Leseprobe

This book is dedicated to my wife Kaija

TABLE OF CONTENTS

Disclaimer

Introduction

Megatrends and weak signals

Internet and electronic media

Single-person households

On-line shopping

Impact of pandemia

Impact on paper consumption

Impact on wipes

Impact on Face masks

Geopolitical tensions

Lightweighting

Digital watermarks and Holy Grail 2.0

Ban on plastics

Food packaging trends

Plastic recycling

Barrier coatings

Paper bottles

EPS issues

Fish Boxes away from EPS

Ban on EPS in packages

Molded fibre products

Stone paper

Industry 3.0 - 5.0

Diapers and population age pyramid

Urbanization

Africa rising

Global scenarios

World paper and board demand up to 2035

Graphic papers – Death dance?

Tissue papers

Market outlook

Alternative fibres for tissue

Product development trends in tissue

Corrugating materials – winners

Market trends

Corrugating technology trends

Digital printing of corrugated board

Box on Demand

Cartonboards

Market outlook

Challenges in product development

Sack and bag paper

Technical and specialty papers

Paper recycling

Non wood pulps

Non wood fibres

Bamboo

Non wood pulping technology

Specialty pulps for barriers

Rush for Textile Fibres

World market pulp demand

Nicotine renaissance

Innovations and R&D

Papermaking technology

Operations improvement – Kaizen

Trade fairs in transition

Branding and marketing

Cybersecurity

Saudi Vision 2030

Space visions

Future of consulting

Riding out of the crisis

Roadmap to the promised land

Abbreviations

Annex

Ideas

Disclaimer

Pekka Niku Consulting Ltd. Oy has prepared this Document in accordance with the standards of skill, care and diligence generally practised by members of advisory and management consultancy profession currently operating in the region under similar conditions.

In no event shall Pekka Niku Consulting Ltd. Oy have any liability under or in relation to this Document. Copyright, all rights reserved.

Introduction

“The only constant in life is change.” Heraclitus

In 105 Chinese Tsai Lun invented paper, which internet started to crush in the 1990s. Today’s paper industry resembles “Wounded Angel”, like in the famous Finnish painting by Hugo Simberg.

Wounded Angel by Hugo Simberg

The key topics discussed in this book are: what are the megatrehds, specific trends and weak signals affecting the pulp and paper industry? How is the operating environment of global pulp and paper industry changing? What is happening in plastic-to-paper trend? What are the opportunities and risks of the industry in the future? The industry needs visions, scenarios, resilience and strategic roadmap on how to navigate into the uncertain future.

The following chart illustrates the impact of internet on the Finnish paper industry. Especially graphic papers started to decline in 2006, whereas cartonboards and packaging grades (and tissue) in general have grown. Pulp is doing quite well, too.

After Helsinki Business School I worked over 40 years in the forest industry. First in the marketing departments of Ensi-Gutzeit (now Stora Enso) and United Paper mills, and then as a consultant in Pöyry and Ekono in Finland and the USA. I have travelled in over 100 countries and prepared over 300 feasibility and strategic studies, due diligence work, bank reports, etc. For this reason I have been in an excellent positions to follow up the development and trends in the industry and markets. For the last seven years I have worked as an independent consultant for my own company.

The world is changing faster than ever before. We need gladiators, innovators, and re-evaluation of all things to survive and grow in the age of great uncertainty. Visions of the future are needed, and they need to be revisited continuously in the strategy and scenario building processes. There is nothing wrong in copying ideas from the world, if they can be further processed to suit companies’ own needs. Uncertainties can be turned into opportunities.

Scenario building process based on visions helps companies identifying:

• Risks and opportunities

• Necessary changes

• Required shifts in strategy

Covid-19 and recent changes (in 2022) in energy prices, inflation, exchange rates and tensions in geopolitics are good examples on how fast things can change in the global operating environment. Investments in pulp and paper industries are capital intensive, and the economic life time of the projects is typically over 15 years. For this reason companies must have a long term planning horizon, resilience and a well prepared strategic roadmap.

There has been a lot going on in the forest industry in five decades - structural change towards larger machines and units, internationalization, declining demand for graphic papers due to the internet. Industry restructuring and consolidation has increased rapidly. This has led to closures of the paper machines and rebuilding some of the graphical paper machines to packaging grades. Recently, Industry 4.0 (Internet of Things), robotics, and 3D printing have been growth areas. Big data, artificial intelligence (AI), augmented reality and remote machine maintenance have found their way into assembly shops and machine fleets. Sustainability, productivity and cost differentation are of vital importance as in every global industry. Optimization of end-to-end value chain (from fiber to end product) by digital analytics can bring new opportunities for the industry. This has been interesting development to follow. It is clear that, at the same time, a large number of jobs, as we know them now, will be lost.

As the previous picture shows, the forest industry is cyclical in terms of production volumes. It is even more sensitive to prices. It is typical that investment decisions are made in an economic upturn at a time of high prices, and then the new capacity will start up in some two years in recession, in overcapacity situation and low prices. If profitability calculations have been made with the peak prices, then there will be problems. This pattern has been repeated for over 40 years.

Companies tend to focuse on the quarterly results and forget the long term.

Scenario building – like thinking in general – is often considered as difficult, heavy and time consuming process, which requires a large number of participants to reach consensus. An opposite approach could be more fruitful. Discussions with a few selected industry experts and independent thinkers can lead to better results faster. Speed is of essence in today’s turbulent world.

Meta-thinking, that is, thinking about thinking, is required in scenario building. Bad thinking produces bad decisions and disastrous outcomes, and good thinking leads to better decisions and desirable outcomes.

The results of the scenarios are not stone carved – every company needs to make their own scenarios based on their position and targets in the business; and revisit them frequently. “Rowing harder doesn’t help, if the boat is headed in the wrong direction” (Kenichi Ohmae).

In this context, I would like to thank in particular my colleagues, partners and customers who have made the background for these visions possible. Special thanks to my wife Kaija for her continued support and patience. This book is available also as e-book from Amazon and other publishers.

Muurame, Finland, November 2022

Pekka Niku

www.pniku.com

Other recent books: “Memoirs of a Forest Industry Consultant” available in English and Finnish from Amazon and other e-book publishers.

Megatrends and weak signals

Analysis of the megatrends and driving forces is the basis for preparing visions and strategic scenarios of the future. A megatrend is a general direction of the development in the operating environment. These trends normally take place at the global level, but not necessarily at the same time everywhere. In addition to megatrends one should also look at the weak signals and more specific trends under the megatrends - undercurrents. Some of the main megatrends and specific trends affecting pulp and paper industry include:

Growth of internet, electronic media and on-line shopping

Aging population, slowing population growth

Trend to single households

Urbanization

Ban on plastics

Specialty pulps

Bio products

Non wood pulping – bamboo, straw, etc.

Textile fibres

Recycling and circular economy

Environmental issues, sustainability, CO2 reduction

Production technology

AI (Artificial Intellingence)

Light weighting

Industry 4.0 and 5.0

Production and printing on demand

Digital printing

3D printing

Covid-19 and other pandemia

Legislation

Geopolitical tensions and trade restriction

Changes in global weather

Industry restructuring and consolidation

Innovations

Increasing space activity

Evaluation of all these trends means an analysis of massive amounts of data and number crunching. I have tried to avoid presenting such a “data dump” in this book, and instead jumped directly into the conclusions and recommendations.

Former US Secretary of State Colin Powell, had a particular approach when faced with making a quick decision. He called it the 40/70 rule. He would strive to not make decision with less than 40% of the information needed, then ultimately make the decision when he had at most, 70% of the information.

I have noted the same phenomena in consumer research. The results of preliminary surveys with small, carefully selected focus groups often lead to the same results as large consumer surveys, although there is no firm statistical support for this.

Internet and electronic media

Internet usage started to increase in the 1990s. In Finland the first www-pages were opened in 1993. In 2022 the number of internet users in the world is estimated to be close to 5 billion. About 60 % of world population have access to internet. Most of the internet users (4,7 billion) use also social media. English is an “official” language of internet, which gives English speaking countries, like India, an enormous advantage.

Compared with print media, and other analog technologies, digital media are easy to copy, store, share and modify. This quality of digital media has led to significant changes in many industries, especially journalism, publishing, education and entertainment. From the publisher’s point of view the digital editions of newspapesr, magazines or books bring huge savings in production costs. The following chart illustrates the development of US newspaper circulation.

These trends will continue to have big impacts on world paper demand: