PAPER INDUSTRY SUNSET TO SUNSHINE INDUSTRY

Once categorised as sunset industry is now appearing to be a sunrise industry. Thanks to new catalyst that is supporting the industry.

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The Covid-19 impacted different industries in different ways both in short term as well as for long term. There is an interesting observation. Its impact is diametrically opposite in short term and long term. One example is Paper industry. Covid-19 induced lockdown was devastating news for paper industry. Schools were shut down and moved online. Students didn’t need notebooks anymore. They could note down their teacher’s instructions on their computer. Newspapers were also closed as they could carry the virus and infect readers. Companies too cut their paper requirement as digitisation accelerated. Listed companies also stopped mailing hard copies of annual reports to shareholders. What all this means is that demand for all kinds of paper saw a share cut. Within few days, large parts of their business had vanished.

Post Covid triggers

Nevertheless, what supported the industry during the tough times was e-commerce. Most of us were not allowed to step out of their house. In such cases we were ordering everything on e-commerce platforms. And that gave a massive fillip to packing board boxes. The pandemic, which led to a massive shift to online shopping, boosted demand for packing board boxes.

Now the paper industry is witnessing a paradigm shift from the demand perspective, with demand for newsprint, printing and writing papers dwindling, given the rising impact of digitisation. At the same time, the packaging paper segment is witnessing a rise, with growing demand for packaging from eCommerce, food and food products, FMCG and the pharmaceutical sector.