The office paper market is continuing its transformative shift, driven by a confluence of factors. These include digitisation, sustainability concerns, supply chain challenges, inflation, soaring energy costs, fluctuating pulp prices, the conflict in Ukraine and evolving work patterns.
In 2023, the paper sector faced a shaky start, with these aforementioned elements still exerting their influence, leading to an imbalanced supply and demand scenario and volatile pricing. Navigator Head of Brands João Escoval notes that uncoated woodfree operating rates have notably dipped below standard levels. However, distributor stock levels seem to be normalising. This suggests a potential uptick in demand for mills, although some producers may be facing razor-thin profit margins per tonne manufactured.
Meanwhile, pulp prices have risen in China in recent months due to robust demand for the commodity. Despite this, Escoval anticipates that with the current cost trend and an expected equilibrium in supply and demand, paper pricing is likely to stabilise.
While some paper manufacturers remain circumspect about making projections in these challenging market conditions, others share a more optimistic outlook. According to Steve Carter, Managing Director at Advantia, pricing for cut sheet paper has recently declined as anticipated, and the consensus is that current pricing levels will plateau.
The European market has experienced an influx of paper from Asian mills, yet demand in the Far East, particularly in China, has recently surged. This may lead mills to reconsider their export strategies to Europe.
As winter approaches, there is concern, notes Carter, that cold weather could escalate costs for European mills, which have been operating at approximately 70% capacity of late. Uncertainty still looms large due to the myriad of influences impacting the paper market, making it difficult for manufacturers to align consumption with production. This situation is further exacerbated by the unknown reality of how much paper demand has permanently vanished.
One reason – although by no means the only one – for waning paper sales can be attributed to the shift to hybrid and remote work. What is certain is that with fewer individuals occupying physical office spaces, the need for printing and photocopying has been reduced. This change in work patterns has had a lasting effect on the office paper category, with demand remaining suppressed compared to pre-pandemic levels.
On the other hand, as Escoval highlights, it opens up the market for home printing and different carton sizes. “Navigator already embraced that challenge with dedicated SKUs for this market, including Navigator Home Pack with 150 or 250 sheets in 80 gsm and Navigator On the Go – a pack with three reams (1,500 sheets),” he says.
Furthermore, he points out that, according to a 2022 survey by Quocirca, fewer than 20% of MPS contracts include provisions for homeworking devices and services. This potentially represents an untapped market opportunity for those operating in this space.
One of the most enduring trends reshaping the office paper market is the pace of digitisation which, by all accounts, recent paper shortages helped to accelerate. Businesses are swiftly adopting digital workflows, leading to a reduced reliance on physical paper. E-invoicing, electronic documentation and cloud-based collaboration tools are prompting many workplaces to strive for a ‘paperless’ environment.
The green factor
Part of this pivotal shift in consumer preferences to paperless also centres around environmental concerns. As many in the paper industry caution, misleading claims regarding paper usage and its impact on trees are still prevalent. Escoval underscores the fact that the European pulp and paper industry is foremost a proponent of tree planting, with forests growing at a rate equivalent to 1,500 football fields per day from 2005 to 2020. “We all need to stop this type of greenwashing. Paper advocacy initiative Two Sides has been doing a fantastic job in this,” he adds.
There is a discernible surge in interest in recycled and sustainably sourced products, with customers actively seeking paper with eco-friendly certifications such as PEFC and FSC. The climate crisis and the race to net zero have added an extra sustainability factor which Navigator, for example, is hitting head-on. The company recently added an 80 gsm Carbon Neutral to its Universal brand and is soon to launch a new SKU – the Navigator Eco-Netural 75 gsm, with its carbon footprint offset until it reaches the consumer.
For dealers, it is crucial to be knowledgeable regarding the choice between recycled and virgin paper, the latter of which is a necessary component for recycled paper production. A reduction in virgin paper use translates into a decrease in the volume of paper entering the recycling process. Escoval further emphasises that virgin fibres can be recycled for more cycles, contributing to the manufacturing of higher-quality recycled products.
For end-users seeking tree-free alternatives, meanwhile, options such as bagasse, stone, kenaf, bamboo, agri-pulp and wheat straw are available, although dealers may need to explore various distributors to source these items. As with all products, it is imperative to look at environmental impacts such as carbon footprint and life cycle assessment to make informed decisions.
Taking its first shipment in October last year, CTS Wholesale is the UK’s sole distributor for Trident Group’s Spectra 80 gsm paper. This paper product offers a viable alternative to traditional wood-based paper by blending wheat straw with recycled wood pulp veneer chips.
According to CTS Wholesale, Spectra is a high-quality white paper specially crafted for high-volume, high-speed printing. The paper is composed of 100% waste product – 70% wheat straw and 30% wood pulp veneer chips, sourced from carpentry wood waste.
During the production process, Trident abstains from directly harvesting trees, which the company says “conserves over 1.5 million trees annually based on the approximately 26 trees required to produce one tonne of wood-based paper compared to a mere 0.9 of a tree for the wheat straw variant”.
In addition to its ecological merits, Spectra paper also champions the livelihoods of over 100,000 local Indian farmers, achieved through the direct purchase of agricultural waste. In a commitment to environmental responsibility, Trident Group has also planted one million trees on its premises and recycled eight trillion litres of water.