UK Paper Industry Hurt by Energy Costs in 2005

March 1, 2006 (Press Release) - The impact of energy price increases has been revealed in the Confederation of Paper Industries’ (CPI) preliminary 2005 statistics.

Although the overall tonnage produced stayed above 6 million tonnes, the output in December 2005 was the lowest recorded by the industry since the beginning of 1993. This follows the closure of four mills between October and December.

Paper and board consumption fell to 12.5 million tonnes, a small decrease in demand over 2004. Encouragingly, production of newsprint continued to increase, reaching 1.136 million tonnes; whilst demand for graphic grades and wrapping grades remained unchanged. However, production of corrugated case materials fell 10% with demand down by 1%; and the output of tissue grades fell by 1.3%.

Exports now represent 19% of total UK paper and board production compared with 21%. Export sales fell by 10% to 1.164 million tones, and have fallen by over 250,000 tonnes since 1999.

Exports to the EU 25 represent over 69% of deliveries, followed by Asia with 12.5% and North America with 9.2%. Meanwhile, imports of paper stayed at around 7.6 million tones, representing over 61% of total UK paper and board consumption.

Exports of newsprint rose by 5%, export of corrugated case materials fell 30%.

Overall consumption of fibre fell by 1.9%, with the usage of imported pulp virtually unchanged at 1.44 million tonnes. In contrast, production of integrated home-grown pulp decreased by 1.1% to 341,000 tonnes. Domestic consumption of recovered paper fell to 4.5 million tonnes, 2.5% down on 2004.

Effective corrugated board demand in tonnes declined by 1.1% compared to 2004 figures, whilst effective corrugated board demand in area terms was down by 0.7%. The variance reflects the continued light-weighting trend within the UK market.

CPI's Director External Affairs, Kathy Bradley, said, “The past twelve months has been extremely tough for the paper industry. The unprecedented rise in energy prices has put severe strain on the whole industry.”

The Confederation of Paper Industries (CPI) is the leading organisation working on behalf of the UK's paper industries. CPI represents the paper chain from the recovery of used paper through papermaking and conversion to distribution.

SOURCE: Confederation of Paper Industries

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