The Hindu Business Line : Global paper trail

In each of the past five years, capacity has risen by less than a percentage point. For the three-year period between 2003 and 2005, capacities are expected to be flat, with a marginal rise of 0.2 per cent.

On an average, demand growth is expected to be about 2.5 per cent. If these numbers stay in line with the script, producers may be better placed to effect price hikes and sustain them.

Consolidation appears to be confined largely to the North American market. Over the past five years, the number of major players has come down by half (from 16 to 8) in the US and by 60 per cent (10 to 4) in Canada. But in the European and Asian space, the numbers are down by only a fifth (25 to 20).

The effects of consolidation are visible in the control over production in the North American market. Across four key paper and paperboard varieties, the top five producers now control over 80 per cent of the capacities. A decade back, their share was between 45 per cent and 65 per cent.

The prices of pulp are now at levels that prevailed a decade ago. They are also lower by about 50 per cent compared to the all-time highs of 1995, and by 25 per cent compared to the recent highs of 2000.

Over the past two years, producers have had difficulty in pushing through price increases as end-users have continued to call the shots and have only partially accepted the proposed hikes.

Article E-Mail :: Comment :: Syndication

Stories in this Section
SC verdict on EPS — A blessing for employees

The challenge of regular income generation

Paper and paperboards — A better script in the making

Global paper trail

Gaining by binding

`Cost management will remain a focus area'

Value in the reams

Indirect acquisitions — Scope for better compliance?

It's all in their interest

Profit-booking tones down FII effect

Commodity prices — The wild card in India Inc's performance