The last century has been one of the most fruitful eras for the world’s most iconic papermaking, but its future is increasingly uncertain.
While a handful of papermakers are still thriving in their traditional businesses, the rest have been pushed to the sidelines by the rise of digital technologies and the rapid expansion of emerging papermaking businesses.
“It’s very challenging for the papermakers to continue to be able to provide quality products, quality services, and quality services at a very competitive price point,” said David Schubert, a partner at global consulting firm CMI.
He noted that many of the industries that have been growing in the past decade have become too expensive for the companies that have stayed the course.
For example, one of China’s most popular papermaking manufacturers, Paper and Paper Products, is now worth $1.5 billion.
But the Chinese papermaking market is still dwarfed by the United States, where the global market for papermaking products grew 7.6% from 2014 to 2018, according to the World Paper and Board Papermakers Association.
The paper industry employs nearly 2.2 million people globally, according the Pew Research Center.
And it has been a steady growth market, as new technologies like laser cutting, die cutting, and carbon fiber-based papermaking have allowed the industry to continue its rapid growth.
The industry is also expected to grow by 6.4% in 2020, with global demand forecast to be $3.5 trillion, according TOBIS.
But there’s another factor driving the paper industry’s slowdown: the advent of the internet.
In an effort to boost consumer spending, many manufacturers have started offering cheaper paper products.
But with so many of them now out of business, companies are also increasingly looking to online retailers to compete.
“We’re seeing a lot of consolidation, a lot more consolidation in the paper market, and the consolidation is not just a paper product market,” said Mike Tannenbaum, chief executive of the International Paper Association, an industry trade group.
And with a few key papermakers still remaining open, the industry is now facing a choice: keep growing or cut corners.
As the industry continues to struggle, it’s becoming increasingly difficult to predict how much paper will survive.
The next wave of consolidation may be even more severe, according in part to China’s rapid growth in the digital era.
As China’s economy continues to expand, the Chinese government is increasing regulations to ensure that all goods and services have to be made with digital technologies.
But this is happening without any regard to the paper industries’ past, said Peter Luebke, the president of the Paper and Plastic Industries Association.
“The real question for the industry right now is: How are they going to survive in the new environment?,” Lueberk said.
A few papermakers have already gone through a major restructuring, but others are hoping that their companies will keep making paper until 2020, when they will be ready to compete with China’s increasingly expensive and slow-moving paper products in a global marketplace.