Digitization & Paper: No Reason to Get Bent Out of Shape…
Not all paper is the same. That’s the good news, at least from the viewpoint of the Association of German Paper Manufacturers. The association, namely, is facing a structural shift. As in many other industries, digitisation is the culprit. On the one hand, it results in a reduction in demand, but on the other hand it also boosts revenues.
Sounds like a contradiction in terms, but it isn’t. For on the one hand the production of so-called “graphic paper” is dropping sharply. More and more people are reading online and through apps, and fewer are reading classic print media. Electronic invoices, digital workflows, and archives are replacing traditional processes and filing systems in offices. The demand for wood-free, coated paper is therefore dropping more and more according to the Association, and the focus is instead on reducing excess capacities.
Typical for Digitization: Creating Other Business Models
Is that the proof then? Digitization really is a job killer? If only things were so simple … Amazingly, profits in the industry seem to be stable. On the plus side, namely, the industry is seeing increased demand for cardboard and packaging paper. Why? Because we’re buying more and more things online, turning a business model from the last millennium into a mass phenomena. The demand for specialized papers and cellulose is also increasing.
Wherever There’s a Risk, There’s an Opportunity…
What can we learn from this? The digitization of media and business processes is creating challenges for the paper industry. However, it also holds opportunities. The revenue in paper in Germany for 2015 was 14.4 billion euros, 0.9 percent higher than the previous year. Paper, cardboard, and carton production was up by 0.3 percent. The industry produces 22.6 million tonnes of the materials.
Even if the numbers for 2016 aren’t available yet: the industry doesn’t seem to be expecting any collapse in profits. So no one needs to have a bad conscious for reading the newspaper on their tablet or switching over to electronic invoicing. Quite the opposite – or to say it with EASY: Planting trees instead of felling them.