Paperboard – excellent growth potential globally
Demand for paperboard is being driven by a number of megatrends, such as growing population, increasing disposable income, urbanization and ageing population. Scaring pictures of oceans being filled with plastics as well as the increasing understanding of the scarcity of resources increase focus on environmental issues.
Paperboard can be made from fresh forest fibres or recycled fibres. Metsä Board’s paperboard is made exclusively from fresh forest fibres, making it safe in food applications. Many food packaging companies are reducing the use of paperboard made from recycled fibres, amidst concerns of food contamination from mineral oil present in recycled fibres. Thanks to high class product development, Metsä Board can produce high-yield, lighter weight products without compromising on the quality, saving both resources and logistics costs.
Metsä Board is self-sufficient in pulp. Fresh forest fibre pulp is produced from a renewable resource – wood. Wood is used sustainably: forests grow annually more than they are used both in Finland and Sweden.
Metsä Board’s paperboard product portfolio consists of folding boxboard and white kraftliner. Folding boxboard is used to pack consumer goods such as high quality food, beauty care and healthcare products. Thanks to the newly installed extrusion coating line, Metsä Board can also supply PE-coated paperboard for the food service segment. White kraftliner is used to pack heavier goods, e.g. in the food and electronics industry. It is also commonly used as retail-ready packaging and point-of-sale-displays in sales promotion activities. White kraftliners benefit from the increasing e-commerce, especially of luxury products.
At the end of its lifecycle, the paperboard packaging can be recycled and used in the production of recycled pulp. Over 70% of the European paper and board is recycled.
In general, the profitability of the industry is driven by macroeconomic factors, industrial production, the competitive situation and naturally by the profitability of customers and end users. Demand has been relatively insulated from economic downturns, as many of the end use products, such as food, are stable by nature.
The European market for folding boxboard and white kraftliner remains concentrated. The five largest producers represent close to 85 per cent of the European capacity in these grades.
Pulp – global pulp demand-supply balance is good
Metsä Board’s excess pulp volumes (BCTMP and chemical softwood and hardwood pulp) are sold on the market. Global market pulp demand is mainly driven by the increase in tissue paper production, while demand for wood-free uncoated and coated papers is declining. Demand in Europe and North America is stagnating, while strong growth continues in Latin America and Asia, especially in China.
Pulp prices typically fluctuate more than prices for paperboard according to the global demand and supply situation.
Metsä Board’s associated company Metsä Fibre’s next-generation bioproduct mill in Äänekoski started up in August 2017 and was the biggest investment in the Finnish forest industry history. The new bioproduct mill will increase Metsä Board’s annual pulp capacity by approximately 200,000 tonnes as of 2018.