Jan. 29, 2009 - Czech paper and cardboard output decreased by 8% year-on-year to 716,378 tons in Q1-Q3 2008, according to the Association of the Czech Pulp and Paper Industry (ACPP).

In addition, pulp output fell by 9 percent and paper products by 1 percent, ACPP said.

Paper and cardboard output had been growing for seven consecutive years until 2006 and was flat in 2007, ACPP noted.

Industry experts say Czech paper production in Q3 was negatively affected by the shutdown of a paper mill in Steti, north Bohemia. The owner, Norske Skog, halted production in Steti in May.

The Steti plant, which specialized in newsprint production, had a dominant position in the Czech Republic in this field, ACPPsaid.

"Shutting down Norske Skog's facility in Steti means production will decrease by 55,000 tons in H2," Jaroslav Tauc of the ACPP said.

Exports dropped in general, with hygiene paper export showing the biggest drop of about 66 percent year-on-year, while exports of paper products grew by 25 percent and the export of scrap paper increased by a about 33 percent, APCC said.

Imports of paper and cardboard dropped by 3 percent on the year, while import of other commodities grew, mostly of paper products, by 62 percent.

The ongoing decline production at Czech paper mills will most likely affect the next quarter too, added ACPP.

The economic downturn in many sectors directly leads to lower demand for cardboard, cartons and packaging material, ACPP president Ivo Klimsa said.

The Czech paper industry mostly produces packaging and technical papers, out of which over 80 percent goes for export.

In addition, paper producer Papirny Bela (central Bohemia) stopped producing folding box cartons in Q3, which means a loss of around 24,000 tons of paper a year.

As of December, paper producer Olsanske papirny (northern Moravia), whose output was 75,000 tons of paper a year, is in insolvency proceedings and is not producing, Tauc said.

According to an ACPP estimate, about 9,000 people are employed in the paper industry in the Czech Republic.

Because of the crisis, some firms have had to limit production, but massive layoffs have not been announced yet, Tauc said.

SOURCE: Prague Daily Monitor, and ACPP