What is the paper market in the first place? There are many ways to categorize this market in all its variety. A very clear and simple classification is into the four classic segments: graphic paper, board and packaging paper, tissue and specialty paper. Practically all paper grades can be covered by these four groups. As different as the products are that are gathered in these segments, so, too, are the market conditions and challenges stakeholders face in their respective areas.

Digitalization presses graphic. Many companies that specialize in graphic paper are currently experiencing difficult times. Due to advancing digitalization, sales of books and newspapers are dropping. The effects are clearly noticeable: The need for graphic paper is continuously decreasing in many highly developed national economies. Even in highgrowth countries such as China, this segment is registering only comparatively moderate growth. Seen globally, leading research companies such as RISI are thus expecting, at best, stagnation in the coming years, if not a considerable shrinking of the graphic market. This means many companies in the industry are facing big challenges – primarily, of course, publishing houses and paper producers.

But the suppliers of the paper industry such as Voith are also being affected. Dr. Hans-Peter Sollinger, President and CEO of Voith Paper, explains: “The paper market in many countries shows a decline in the graphic paper segment of a few percentage points. However, this situation heavily affects us on the supplier side. As a consequence of weak demand for graphic paper, practically all investments by the paper industry in new graphic paper machines have been stopped. We are experiencing here a drastic cutback in project activity, and not just with us but rather in the entire market, by about 90%. So we are relieved that we expanded into new areas at Voith Paper more than 10 years ago and can serve all segments of the paper market today as a process supplier. Due to this broad line-up, we are in a position to be able to partially compensate for such a market change.”

Bright spot with other grades. Things look far more positive in the case of tissue paper. The market for tissue products is growing worldwide and is proving to be very stable during cyclical fluctuations. Esko Uutela, specialist for tissue papers at RISI, sees clear potential in this segment: “The tissue market increased even during the global financial crisis, and this trend will continue in the coming years. We expect an average global growth rate of about 4% annually; we even calculate with 6–7% annual growth in tissue demand in the emerging markets.”

To a similar degree, board and packaging papers are also growing, and make up the biggest segment of the paper market. However, the new machine types on which this growth relies no longer conform to the principle of “bigger, faster, wider.” Instead, in the recent past there has been more demand for efficient and compact machines of medium size in the paper industry (see p. 13). The market segment for board and packaging paper also has very good prospects for the future, since it profits from the increase in global trade. Moreover, paper as a packaging material has certainly not exhausted its possibilities and could replace other less sustainable materials. David Powlson, Senior Principal at Pöyry, explains: “Paper still has plenty of opportunities for serving even more packaging needs than in the past. Paper-plastic composites substituting non-paper products, for example in the area of food, are just one example we regard as highly promising. There will be new niches sitting alongside the significant traditional end uses.”