A wider trend of domestic decline in the paper and board manufacturing industry has been confirmed by figures from the Confederation of Paper Industries. Further domestic production decline is also predicted for 2009 despite plans for new mills.
The CPIs analysis follows announcements from recycler and manufacturer Smurfit Kappa earlier this week that its production figures had dropped in 2008.
Preliminary 2008 data from the CPI showed manufacturing was down but found domestic use had reduced by a smaller percentage.
In 2008, the UK produced just less than 5 million tonnes of paper and board (a 4.7 per cent reduction from 2007 levels). In comparison, material used in the UK was just under 4 million tonnes (a reduction of 1.3 per cent from 2007 levels).
As a result of this, exports are expected to increase slightly to 4.7 million tonnes, just above 2007 tonnages. More than 76 per cent of this was bought by Far East buyers.
Reduced production levels in the UK will come as no real surprise to the industry as four paper and board mills closured in 2008, with three more under consultation over future plans. These seven mills represent about 675,000 tonnes of UK capacity.
The reasons for reduced production stated by Smurfit Kappa, such as a lack of profitability caused by tough trading conditions, has been echoed by the CPI as reasons behind wider reduced production across the industry.
This year (2009) is expected to take the full impact of the 2008 industry shutdowns. CPI recovered paper sector manager Peter Seggie said: 2008 was again a very demanding year for the UK paper and board industry and the four closures, and three current consultations, are a reflection of the difficult time the industry is still having in securing profitability. We hope the planned new paper and board making capacity in 2009 and 2010 will reverse the decline in paper and board manufacturing and secure a better outlook for the industry, particularly in terms of domestic paper and board recycling. All the planned new UK capacity is based on 100% recovered paper and board.