"We have to adapt"
Interview with Dr. Wolfgang Palm
2013-11-08 - The paper industry is going through challenging times. Digitalization is especially having an effect on graphic paper in the mature markets; globalization is causing new economic areas to gain in significance and is increasing competitive pressure. Twogether spoke with Dr. Wolfgang Palm, CEO of the Palm Group, one of the leading paper manufacturers in Europe, about the current developments in the industry.
the leading producers in the European paper industry.
Dr. Palm, at King’s Lynn in England, you operate the world’s largest machine for newsprint. Do you see a future for this paper grade?
Dr. Wolfgang Palm: Since the beginning of 2012, we have been seeing a reduction in quantity in the market for newsprint. The way I see it, the development that has begun will continue for some years. The circulations of the daily newspapers will presumably further decrease by 2% annually. Thus I don’t see any potential at all for a new graphic paper machine in Europe. But just because there is no need for a new machine doesn’t mean that the paper grade itself will die out. I can’t imagine that at all. The daily newspaper is part of our culture. The content and the feel can’t be replaced by the electronic media. The need for newsprint will stabilize at a lower level. But paper manufacturers, publishers and print shops have to continue working intensively on the quality of the product so as to slow the downturn as much as possible.
What is required to stabilize the market in Europe?
The paper industry has to adapt its capacities to the shrinking demand. I don’t see any other possibility, since there are no export markets that are significantly growing. Thus, for example, some paper manufacturers have already converted from newsprint to upgraded qualities. But of course this is only a limited solution, since the market for paper of higher qualities is also not growing and you thus come up against other capacities that are then in turn endangered.
But also there are still quite a lot of very old graphic machines in Europe that are between 40 and 80 years old and are actually at the end of their technically and economically reasonable service lives. A glance at North America shows that in this case shutdown is a sensible strategy. The paper manufacturers there have been facing dropping consumption of graphic paper for 12 years, which instead of its former 30% now makes up only 17% of the world market. Shutting down the appropriate machines has counterbalanced shrinking demand so that the market can now stabilize.
Dr. Wolfgang Palm: Since the beginning of 2012, we have been seeing a reduction in quantity in the market for newsprint. The way I see it, the development that has begun will continue for some years. The circulations of the daily newspapers will presumably further decrease by 2% annually. Thus I don’t see any potential at all for a new graphic paper machine in Europe. But just because there is no need for a new machine doesn’t mean that the paper grade itself will die out. I can’t imagine that at all. The daily newspaper is part of our culture. The content and the feel can’t be replaced by the electronic media. The need for newsprint will stabilize at a lower level. But paper manufacturers, publishers and print shops have to continue working intensively on the quality of the product so as to slow the downturn as much as possible.
What is required to stabilize the market in Europe?
The paper industry has to adapt its capacities to the shrinking demand. I don’t see any other possibility, since there are no export markets that are significantly growing. Thus, for example, some paper manufacturers have already converted from newsprint to upgraded qualities. But of course this is only a limited solution, since the market for paper of higher qualities is also not growing and you thus come up against other capacities that are then in turn endangered.
But also there are still quite a lot of very old graphic machines in Europe that are between 40 and 80 years old and are actually at the end of their technically and economically reasonable service lives. A glance at North America shows that in this case shutdown is a sensible strategy. The paper manufacturers there have been facing dropping consumption of graphic paper for 12 years, which instead of its former 30% now makes up only 17% of the world market. Shutting down the appropriate machines has counterbalanced shrinking demand so that the market can now stabilize.
“I’m not worried about the future of the European paper industry. We have a strategic advantage in our industry: We produce from a renewable resource and our product is easy to recycle.”
Along with paper grades there are also other changes happening in the market. The requirements of paper manufacturers have changed in addition. What expectations do you have for a paper machine today?
The trend toward ever wider and faster machines is over. Today I no longer have to post a speed record and in my opinion it’s definitely the end of the story with the 2,000 m/min already achieved. We’ve also already achieved the maximum with width; actualizing more would be difficult just from a logistic perspective.
Worldwide there is a development away from extremely high performances and toward things such as resource conservation. This is a fundamental change of direction. Along with the best possible product quality, sensible and conservative handling of resources is an extremely important point. Lower energy consumption and use of secondary fibers are for me important issues that 15 years ago were not yet so fixed in the heads of the design engineers. In the meantime that has changed, and Voith has certainly been a leader in that regard. Nowadays you can no longer afford to not invest in resource-conserving solutions.
What innovations are you still waiting for?
There are physical limits, and the paper manufacturing process itself has already been optimized about as much as possible. A lot has been achieved in the last 20 years, so I don’t believe that there are still quantum leaps ahead of us. It’s rather the many small steps with which we’ll make headway. A further reduction of energy consumption and even more intelligent and resource-conserving stock preparation systems are certainly interesting and can also be implemented in the near future. And beyond that? My dream would be less dilution of the paper stock in the headbox. That would really have decisive energy-saving effects on the entire process.
The trend toward ever wider and faster machines is over. Today I no longer have to post a speed record and in my opinion it’s definitely the end of the story with the 2,000 m/min already achieved. We’ve also already achieved the maximum with width; actualizing more would be difficult just from a logistic perspective.
Worldwide there is a development away from extremely high performances and toward things such as resource conservation. This is a fundamental change of direction. Along with the best possible product quality, sensible and conservative handling of resources is an extremely important point. Lower energy consumption and use of secondary fibers are for me important issues that 15 years ago were not yet so fixed in the heads of the design engineers. In the meantime that has changed, and Voith has certainly been a leader in that regard. Nowadays you can no longer afford to not invest in resource-conserving solutions.
What innovations are you still waiting for?
There are physical limits, and the paper manufacturing process itself has already been optimized about as much as possible. A lot has been achieved in the last 20 years, so I don’t believe that there are still quantum leaps ahead of us. It’s rather the many small steps with which we’ll make headway. A further reduction of energy consumption and even more intelligent and resource-conserving stock preparation systems are certainly interesting and can also be implemented in the near future. And beyond that? My dream would be less dilution of the paper stock in the headbox. That would really have decisive energy-saving effects on the entire process.