More and more people are getting their information from the Internet instead of printed newspapers, magazines and brochures; increasingly, they are also ordering products online. This means that more and more packaging paper is required, while demand for graphic papers for printing, writing and copying is falling. What does this mean for the packaging industry? We spoke with Gregor Andreas Geiger, director of Press and Public Relations at the German Pulp and Paper Association (VDP).
Mr Geiger, the trend towards more packaging in paper and board is balancing out the decline in graphic papers. To what extent has the ratio between these two paper grades – graphic and packaging – changed in recent years?
Andreas Geiger: The figures are very clear. In 2000, graphic papers made up 50.3% of total paper production in Germany, while packaging papers stood at 37.4%. Currently, the ratio is exactly the opposite: packaging papers account for 52.7% and graphic papers just 34.2%. The other main grades – tissue products and paper for technical applications – together fluctuate around the 12% mark. The boom in packaging papers is a result of the good economic climate and ecommerce.
Is it still worthwhile for manufacturers to produce graphic papers?
There will always be a market for graphic papers. Following several years of downturn, it is gradually becoming a worthwhile segment for manufacturers again. The market for graphic papers has undergone significant consolidation. Manufacturers closed plants throughout Europe, while some producers converted their machines for the manufacture of packaging papers. The packaging segment is growing so dynamically that it is even able to absorb completely new planned capacities. The challenges for the industry are primarily of a financial nature: after all, a paper machine isn’t an electric model railway.
Which branches of industry are particularly attractive to packaging manufacturers? How important is online retailing in this context?
In traditional bricks-and-mortar retail, food manufacturers are the most important customers for packaging made of paper, cardboard and paperboard and represent a 50% share of the market. In the case of ecommerce, there are different segments that ask for this kind of packaging. According to the German ecommerce and Distance Selling Association (BEVH), the clothing industry takes the top spot with €10 billion. It is followed by the electronics and telecommunications segment with €8.5 billion. Books, shoes, computers and accessories are in the €3 billion range, followed by furniture, decorative items and household goods account in the €2 billion range.
Can a trend be identified in ecommerce?
We are seeing an increase for food products; in 2017 online retailing grew by around 21% compared with the previous year to around €1.1 billion.
Which packaging materials are especially in demand?
At 47% (in 2017) of total packaging production in Germany, packaging made from paper, cardboard and paperboard continues to be the leading packaging material segment.
Which trends are emerging, for example in sustainable materials?
Paper-based packaging is already taking the lead in terms of sustainability. The basis of production is the renewable resource wood, which is optimally utilised as it goes through multiple recycling processes.
Can paper manufacturers help cut the use of plastic, for example by using new coating materials?
Not just through the use of coatings. Basically, the current debate about the pollution of the oceans with plastic is resulting in corresponding material substitutions in favour of paper and board. This is already making itself felt in the fruit and vegetable sections of our supermarkets, and the EU's proposed directive on single-use plastic products will promote this even more.