The paper and board market in Central and Eastern Europe was worth in the region of $30 billion in 2013, according to a report this past week by Smithers Pira, U.K., titled The Future of Paper and Board in Central and Eastern Europe. The report provides a detailed examination of the key drivers and trends affecting the industry in this region.

The paper and board market in Central and Eastern Europe is set to grow by approximately 2% annually from 2013 to 2019 in volume terms, according to the study. Its worth of some $30 billion in 2013 was made up of about 19 million metric tons of raw material that was converted into about 18 million metric tons of finished product.

 

 

Modern equipment is seen as essential to developing the future market of this region. 

Russia currently dominates the market, with its demand representing the largest share by country, accounting for more than a quarter of the total volume. It is the political and economic trends in Russia that appear to exert the greatest influence over this market. While this political uncertainty prevails, there is reluctance amongst foreign investors to become too closely involved, while elsewhere in the region investment in modern equipment is improving the general quality of production across the market, the Smithers Pira report notes. 

A new study shows that around 60% of all paper and board in this region is used in packaging applications and this proportion is expected to increase over the five year review period to 2019. This is being driven partly by organic growth in packaging demand, fed by increasing retail sales (as a result of higher disposable incomes), improving distribution infrastructure, and many demographic influences that have a positive effect on packaging demand, from increasing urbanization and population growth through to aging populations and growing health consciousness.

In the report, infrastructure development is highlighted as being key among other factors in this future growth.

The decline in demand for newspapers, books, directories, and stationery—largely as a result of the adoption of digital technology—is fortunately outweighed by the burgeoning direct mail industry, also tied to the growth in internet and mobile data usage. Conversely, demand for packaging is trending to show sustained moderate growth of 3% annually from 2014-2019. This is driven by growing demand for liquid packaging products, trends to smaller pack sizes, increasing use of retail ready packs, and other trends that tend to stimulate packaging demand, including retail and distribution infrastructure development.

This new report shows that demand for paper and board in Central and Eastern Europe is set to increase by just over 2 million metric tpy between 2014 and 2019, of which over 85% will be in the form of packaging products. This incremental demand will be worth nearly $4.2 billion to the industry, at constant 2013 prices.

More information and complete access to this study is available online.