December Newsletter

issue December 2022
WORLD NEWS
Dear Enthusiasts,
Big banks expect the global economy to slow further
Seasons Greeting! in 2023, with a possible US recession. It would occur
as a result of the raging Ukraine conflict and soaring
We approach the end of another year when the industry inflation, which triggered one of the swiftest monetary
has grown and faced quite a few turmoil. With price policy tightening cycles in recent times.
pressures both on the mill and the converters. We have
seen an entire rollercoaster of a ride in freights, however, Sri Lanka's key inflation rate fell to 61% in November
the pulp has been relatively stable through the later part from 66% in October, according to the country's
of the year. statistics department. The Colombo Consumer Price
Index (CCPI) showed a 73.7% increase in food prices
However, the main component in increases this year has over the previous year and a 54.5% increase in non-
been, the Energy Costs, Freights, and shortage in supply food prices.
owing to shut down of European factories due to the
Abu Dhabi is inviting Indian start-ups to set up hubs in
Russia – Ukraine conflict. This has resulted in supply chain
order to diversify business activity. The move will not
disruption, and panic across the markets through the end
only benefit the local economy, but it will also serve
of Q3, when the world got acclimatized to the same, and
as a platform for Indian companies to expand their
we have been seeing corrections through Q4. Further the
global footprints. Abu Dhabi has identified priority
China story, lower demand in the west and inflation across
sectors for Indian enterprises to find opportunities
commodities have led to reduced consumer demand. We and invest in, such as agritech, tourism, healthcare,
have seen strong correction in packaging boards owing to pharmaceuticals, and financial services.
excess capacity, however, coated paper, WFUC, and
tissue stay relatively stable owing to balanced supply and Global goods trade is expected to fall in 2023 as
demand. risks rise. It will fall 0.2% next year, with contractions
most likely beginning in the final months of this year,
Most of the corrections in prices have been owing to according to lead economist Adam Slater.
reduced freights, and correction of some process
intermediaries in China, the Indian Sub-Continent, and the Xi Jinping's zero-Covid policy fails as new cases found
Far East, however prices in the West and South America in China. The number of protests in China is currently
stay relatively strong. We anticipate a correction or a on the rise. People are protesting against harsh
more affirmative comment on the trend in pricing post the lockdowns and the zero-covid policy.
Chinese New Year. The market can swing back if China
opens and loosens it 0 Covid policy, else we can expect a QatarEnergy has signed a 27-year natural gas supply
slump across industries. agreement with China. Since Russia's invasion of
Ukraine in February, competition for LNG has become
fierce, with Europe in particular in desperate need of
Lastly I would like to personally wish you and your family a
large quantities to help replace Russian pipeline gas,
very Happy Seasons Greetings, and hope that you stay
which used to account for nearly 40% of the
safe and bring in the New year with Pompous and Joy!
continent's imports.
Best wishes,
Vedansh Gupta IMPORTANT DATES OF DEC 2022

25th Dec: Christmas Day

31st Dec: New Year's eve
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BUSINESS OPPORTUNITIES FOR PULP

INDUSTRY NEWS
AND PAPER INDUSTRY IN 2023

Kimberly-Clark's Brazilian tissue business will be Since the industrial revolution, the pulp and paper sector
has been the most significant sector driving growth. With
acquired by pulp and paper giant Suzano. The unit has
more than half of the world's demand for pulp and paper
an annual production capacity of around 130,000 mpty.
coming from the west, it is the largest market. With a
Suzano's new company will hold the assets as well as
CAGR of 5.5% from 2017 to 2022, the region's market is
manufacture and distribute tissue products such as
also the one that is expanding the fastest.
paper towels and napkins.
1. Growing Anti-Plastic Consumer Sentiments

The Procter & Gamble Company reported net sales of
The anti-plastic movement has been picking up steam in
$20.6 billion in the first quarter of fiscal year 2023, a 1%
recent years as people become more aware of how
increase over the previous year. Organic sales
plastic affects the environment. Since paper is a more
increased by 7% after adjusting for foreign exchange,
environmentally friendly material than plastic, this shift is
acquisitions, and divestitures. Diluted net earnings per advantageous for the paper sector.
share were $1.57, a 2% decrease from the previous
year. 2. Boom In Online Sales
Online sales of paper have significantly increased in
Valmet will provide an Advantage DCT 100TS tissue recent years. Since more people are buying paper
production machine to Papel San Francisco in Mexico. goods online, this trend will probably continue. The
The new machine will be installed at the company's paper business is being significantly impacted by this as
Mexicali mill, with an expected start-up date in the first traditional brick-and-mortar stores find it difficult to
half of 2024. compete with internet sellers. Paper Manufacturers and
Paper Traders must adapt to this trend at the earliest.
Essity's sales increased by 18.4 percent, including
organic sales growth and acquisitions. Organic sales 3. The Rise In The Use Of Data Science
growth was 16.3 percent, excluding exchange rate The first way big data affects the paper sector is by
effects, acquisitions, and divestitures, with volume making paper production more effective. The paper
accounting for 4.1 percent and price/mix accounting for industry has historically relied heavily on manual
12.2 percent. procedures. However, paper producers can now track
client behavior in real-time thanks to big data. This
Toscotec introduces the TT Hydrogen Burner, a new enables businesses to comprehend consumer demands
generation of hydrogen-powered burners designed and and desires considerably more swiftly and efficiently. A
tested for Yankee hoods. Toscotec developed this Paper Trading Firm that does not make use of data
patented innovation to drive the conversion of paper analysis might fall behind in a market competitive.
manufacturing to clean energy as part of the energy
transition from fossil-based to zero-carbon industrial 4. Sky-rocketing Demand For Tissue and Paper Towel
operations. The paper business has been significantly impacted by
the recent spike in the sale of toilet paper and paper
Andritz has received an order from Sappi Austria towels. This is because fewer raw resources are
Produktions GmbH & Co KG to supply key components available due to the increased demand for these goods,
for a new broke handling system for its mill in Gratkorn, which has caused prices to rise.The cost of raw
Austria. The launch is planned for the third quarter of materials has grown, which is the biggest difficulty
2023. facing the paper sector. This is because the shortage of
pulp, the primary raw material used to manufacture toilet
paper and paper towels, has resulted from the growing
demand for such items. As a result, the cost of pulp has
QUOTE OF THE MONTH dramatically increased, placing pressure on paper
producers.
" Curiosity is the one thing invincible in 5. Rise In Demand For Lightweight Packaging
Nature. " Innovation will be the key to competing in the packaging
space and the market for the same serves as an exciting
- Freya stark opportunity for the Pulp and Paper Industry.

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issue December 2022

Vedansh Gupta IMPORTANT DATES OF DEC 2022

25th Dec: Christmas Day

BUSINESS OPPORTUNITIES FOR PULP

1. Growing Anti-Plastic Consumer Sentiments

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