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German paper industry sales fell by 16% to EUR 12.5 billion in the crisis year 2009, the German Pulp and Paper Association (VDP), Düsseldorf, Germany, reported this week. The paper industry has now come out of the trough and the contract situation is improving markedly, VDP added. Only a few companies failed to survive in 2009, said Dr. Wolfgang Palm, president of VDP, at the association's annual press conference. He said that because of rising costs, companies were being forced to adjust prices to safeguard jobs.

Overall production of the German paper industry fell in 2009 by 8% to around 21 million metric tons, and it will be several years before it again reaches the pre-crisis level, Palm said. There were significant differences in the way the various paper grades fared. While the sales of packaging paper and cardboard have more or less stabilized with a decline in sales for the year of about 3%, the surplus capacities in graphic papers are being clearly felt. The market for magazines and newspapers is still weak and sales are down 14%. Hygiene paper manufacturers have been barely touched by the crisis. Most manufacturers of technical and special papers suffered in the 13% drop in sales, although their order situation has improved considerably, VDP noted.

With its 21 million metric tpy of production, Germany has the fourth largest paper industry in the world. It has consolidated its top position in Europe, where it has a 24% market share. Some 43% of the country's production is exported, 65% to Western Europe and 23% to Eastern Europe.