A world of paper, a sea of red ink - Andy McCourt

“If all the world were paper,

And all the sea were ink,

And all the trees were bread and cheese,

What should we have to drink?”

So goes the old nursery rhyme. However, today’s paper industry is far from child’s play; it is increasingly littered with failed businesses, the latest being PaperlinX in Europe and one of the oldest UK mills, Tullis Russell of Fife, Scotland; established in 1809. Fife has already seen one of its two paper mills depart, when SAPPI closed its operation in 2001. It is no secret that a good water supply is needed to make paper – it also happens to be essential to another of Scotland’s industries; Whisky. Fife used to be home to Haig’s whisky distillery, but that’s gone elsewhere too.

Another smaller but older UK paper mill, Portals of Laverstoke Mill at Whitchurch, Hampshire is now the distillery for Bombay Sapphire Gin. Portals had exclusively supplied the rag paper for Bank of England banknotes since 1724. Such was the uniqueness of this security paper, that when the Nazis (using forced Jewish skilled labour), tried to flood Britain with forged banknotes towards the end of WWII to undermine the economy; they couldn’t quite get the paper right despite using experts from what we now know as the Hahnemuele (est.1584) fine art and inkjet paper mill!

Closer to home, in February we saw the closure, after a courageous fight, of Australian Paper’s Shoalhaven mill in NSW

All over the world there are mill closures or curtailments. In the USA alone between 1990 and 2013, over 1,700 pulp, paper and saw- mills closed, were demolished or were curtailed, with job losses in the region of 108,600.

In Europe between 2010 and 2015 an estimated capacity of between 2.7 million and 3.5 million tonnes of paper production was taken out.  Much of the decline is in graphic papers but tissues and packaging papers and boards are faring better in places like Finland.

As to be expected, the picture is different in China, with continued investment in huge new pulp and paper mills; fueled by fibre from hardwood Eucalypt trees cultivated to reach harvestable height within 6 years; plus wood from questionable sources in Russia, Indonesia and Vietnam. China also imports about 30 million tonnes annually of used paper and cardboard for de-inking and recycling. In 2009, China overtook the USA as the world’s largest paper producer in tonnage terms.

One of world’s largest paper mills is Guangxi Jingui Pulp & Paper Co Ltd which, with a 1.2-million-tonnes rated capacity is but one of half a dozen Chinese super-mills. However, the records tumbled in 2013 when stage one of the Metso-built Eldorado Brasil’s Mato Grosso mill shipped 1.4 million tonnes of paper. Plans are afoot to triple production up to 5 million tonnes p.a. Eucalypts are again the main feedstock due to their ability to grow fast in tropical conditions.

Mills producing 30,000, 50,000 or even 120,000 tonnes (as in the case of Tullis Russell) of paper a year can not compete with the economies of scale of these new super-mills. World paper production is estimated to be about 405 million tonnes in 2014 and already Asia is responsible for 45% of this figure (source: Pulp & Paper International).

Add to this massive government subsidies ($35 billion for pulp and paper in China between 2005 and 2010), low labour and feedstock costs and the parlous position of Australian and Western papermaking in general is brought into clear focus, as they battle rising raw material costs, higher labour costs and outdated production methods.

However, it is not all bad news for the printing industry. Many of the materials being printed today, especially on wide-format digital devices, are non-paper in origin. Textiles, plastics, ceramics and metals are finding their way into printshops for imaging on. Even paper-based substrates depend more on the coatings than the base layer.

Also, as the trajectory of A3+ and now B2 and reel digital papers continues its inexorable upward path, paper suppliers, including the digital press vendors, and printers can both make better profits.

For offset printers, the challenges are greater but even here, once China reaches capacity to feed its own printing industry, the hope is that cheaper paper from the land that invented it (in 105AD), will alleviate some of the pressure.