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Poyry Asia Cut Size Paper Report

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The emergence of personal computers and office automation thirty years ago has led many to predict the onset of a "paperless" office. With the shift in consumer habits/behavior and the ever growing digital solutions (e.g. E-reader, smart phones, social media, etc.), what would the future hold for cut-size paper until 2025? Would challenges from digital solutions, e.g. the increased use of electronic filing over traditional hard copy in office environment, bring about the eventual demise of cut-size copy paper?

Pöyry has been actively following the developments within the paper industry, and is one of the most authoritative sources of knowledge regarding the future forecasts of paper demand globally. For this research, Pöyry research in seven countries(Singapore, Malaysia, Thailand, India, Indonesia, China, Japan).

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Poyry Asia Cut Size Paper Report

  1. 1. Asia: Cut-Size Paper Future – Is the “Paperless” Office Just Around the Corner? November,2010
  2. 2. 2 OBJECTIVES This multi-client study is to present an assessment of the likely development of the Asian cut-size paper market up to 2025. This report focus on: Recommendations for Value Chain Players Market Overview & Development Value Chain Analysis Driver Impact Assessment Product Life Cycle Analysis Cut-size Paper Demand Forecast • To review the market overview and development • To provide an understanding of the cut-size paper value chain with its competing value chain and hence potential impact on paper demand in Asia. • To examine the various drivers affecting cut-size paper and their impact on the competing value chain and hence potential impact on paper demand in Asia. • To examine the product life cycle of paper and its implications • To construct a base case scenario of the most likely development of cut-size paper in the region • To give recommendations on how the industry needs to adapt to the current, emergent and future value chains.
  3. 3. CONTENTS The key elements of the study are: •Executive summary •Introduction to cut-size paper •Introduction to cut-size market •Macro-drivers & Geographically bundling •Market Trends •Cut-size paper supply •Value-chain analysis •Cut-size paper value chain •Value Chain Dynamics •Decision making criteria •Value chain competitiveness •Driver impacts assessment •Paper function/value/driver analysis •Technology Drivers •Legal & political drivers •Business Drivers •Demographic & Social Drivers •Product lifecycle assessment •Outlook for cut-size paper •Recommendations and conclusions Geographical market coverage is focused in the Asian region, with an in-depth review of: •China •India •Indonesia •Japan •Malaysia •Singapore •Thailand India China Indonesia Malaysia Singapore Thailand Japan Pöyry is a global expert in consulting and engineering. We offer our clients in-depth industry expertise, innovative solutions and lifecycle engagement. Our knowledge extends across hydropower, oil and gas , power and heat, renewable energy, pulp and paper industry, chemical process industry, transportation, water and environment , and construction services.
  4. 4. METHODOLOGY PRIMARY DATA COLLECTION • Primary data collection through in- depth interviews and site visits to complement the already vast pool of proprietary Pöyry knowledge STRATEGIC ASSESSMENT • In-depth analysis of the primary input and strategic assessment of the key questions for the cut-size paper markets and industry. EXPERT REVIEW • Evaluation of the findings by an industry- leading panel of Pöyry experts in all the key regions. CONCLUSIONS AND OUTLOOK • Strategic conclusions to be presented in a graphic- rich document. The analysis will deliver the Pöyry perspective on the future availability, players and competition. 4 This study will be the first-ever presentation of a comprehensive, in-depth and strategic review of how technology affects the cut-size Asian market and industry.
  5. 5. 5 PREFACE Pöyry Management Consulting has been actively following the developments in cut-size paper, and is one of the most authoritative sources of knowledge regarding the future forecasts of paper demand globally. Asia today is, by far, the fastest-growing region in terms of cut-size consumption. We expect this to continue for at least the next few years but the long-term future remains unclear. Pöyry has therefore decided to provide what is probably the first comprehensive strategic review of the future of cut-size paper in Asia to determine the most likely demand forecast by 2025, and the underlying reasons behind this. We have also set out to answer two main questions: When will cut-size paper consumption in Asia begin to decline?, and is the ”Paperless Office” around the corner? Throughout the summer of 2010, Pöyry interviewed more than 1 200 respondents, and conducted over 50 face-to-face interviews across the region, to try to answer these questions. Our key experts within pulp and paper have also analysed macro-economic factors, key drivers, end-uses, the product lifecycle, and the competing value chains. We trust this study will provide useful background and a point of reference, and invite you to contact us if you would like to investigate further business opportunities in the cut-size paper value chain. Pöyry Management Consulting Singapore, November 2010 ASIA: CUT-SIZE PAPER FUTURE: IS THE “PAPERLESS OFFICE” JUST AROUND THE CORNER? SAMPLE PAGE
  6. 6. 6 CONTENT PAGE Preface 3 Objectives and Methodology 6 List of Abbreviations 8 Key Messages 9 1 Introduction 18 2 Market Overview & Development 2.1 Macro-economic Drivers and Geographical Grouping 24 2.2 Market Trends 39 2.3 Cut-size Paper End-uses and Functions 46 2.4 Uncoated Woodfree & Cut-size Paper Supply 57 3 Value Chain Analysis 3.1 Cut-size Paper Value Chain 65 3.2 Value Chain Dynamics 73 3.3 End-user’s Decision Making Criteria 82 3.4 Evaluation of Competing Value Chains 88 3.5 Impact of Drivers to Value Chain Competitiveness 91 4 Driver Impacts Assessment 4.1 Technology Drivers 100 4.2 Legal & Political Drivers 114 4.3 Business Drivers 118 4.4 Demographic & Social Drivers 123 Page SAMPLE PAGE
  7. 7. 7 CONTENT PAGE (CON’T) 5 Product Life Cycle Analysis 5.1 Technology Development 133 5.2 Cut-size Paper Life Cycle in Developed Markets 136 5.3 Cut-size Paper Life Cycle in Selected Asian Countries 146 6 Cut-size Paper Demand Forecast in Asia Demand Forecasts 154 7 Recommendations for Value Chain Players Overall Summary 163 Appendices A Country Profile A.1 China 170 A.2 India 184 A.3 Japan 197 A.4 Southeast Asia 204 B Asia Poyry Panel 216 C Key Supplier Profile 236 D Macro-economic factor 241 E Capacity Expansion 254 F Legislation 256 G Data Source 260 H Glossary 263 Page SAMPLE PAGE
  8. 8. KEY MESSAGES – ASIAN MACRO ECONOMY Source: UN Population Prospects China India Indonesia Japan Rest of Asia 0 1000 2000 3000 4000 5000 1990 1995 2000 2005 2010 2015 2020 2025 Million 8 7 6 5 4 3 Real GDP growth until 2025, %/a 5.2 4.8 4.64.2 4.2 7.4 1.3 Ø 4.7 Share of GDP in 2009, % 0 1 2 7.6 Source: Concensus Forecast, Pöyry India China Indonesia Other Asia Malaysia Singapore Thailand Japan • Macro-economic factors such as economic growth, population growth, increasing literacy and increasing usage of technology have direct influence on the consumption of cut-size paper. The impact is mainly positive. • The population grows at an average rate of 1.2%/a through 2025. • Japan and China are the biggest economies, whereas India and China are expected to have the highest growth. Long-term GDP growth rate is expected to average 4.7%/a. • However, in more developed regions, cut-size paper consumption per capita has shown to decouple from GDP. This phenomenon is also expected to happen in the studied region, but peaking at a lower consumption per capita. This is due to the competition from electronic devices. Forecast GDP growth Forecast population growth 8 SAMPLE PAGE
  9. 9. KEY MESSAGES – CUT-SIZE PAPER END-USES AND FUNCTIONS • Cut-size paper is mainly (60-65%) used for office (photocopying included) and home printing. Other end-uses are copying in copy shops, invoices, e-tickets and manuals. • Main end-users of cut-size paper are government offices, multinational and large corporations and small and medium sized companies. Cut-size Paper End-use Segments • Main functions of cut-size paper are archiving (copies for record purposes), sharing (documents for reviewing) and learning (prints for creation and reading). • The most used function for cut-size is archiving (~40%), then sharing (~35%) and learning (~25%). • Digitalisation will have different effects on each cut-size paper function but archiving is expected to experience the largest impact in the next 15 years. • Learning and sharing of documents in print format will decline slower because of the current consumer preferences. Especially sharing of information will increasingly move to electronic format during the next 15 years. • In the learning purposes, paper still has good functional properties for writing and drawing. 9 Government offices (incl. govt. schools and health centres) 37% MNC/ Large Corporations 34% Small/ Medium enterprises 14% Individuals/ SOHO 5%Printing/ Copying shops 10% SAMPLE PAGE
  10. 10. KEY MESSAGES – VALUE CHAINS • Cut-size paper and digital solutions are the alternative value chains in fulfilling the need for archiving, sharing or learning purpose. • In the solution selection, the most important decision-making criteria are access, legal requirements and economic benefits. Functionality is also important. Environmental benefits or brand image are not considered as significant. • There is no big difference in decision making criteria between countries. • In Asia, the access to paper solution is much easier than for the digital solution but in the future, this will slowly change along economic and social development, developing legislation and price erosion of devices. The difference in solution accessibility between developing and developed countries is big. • According to our research, printing technologies and devices have a positive impact on current paper consumption. The research also showed that there are solutions that influence cut-size consumption negatively. Such solutions include e.g. PDF, scan-to-email software and e-readers. • In order to have a major impact on current cut- size consumption patterns, the competing solutions need to be accessible, functional, cost effective, and legal in use. End-user Paper Mill Merchant Retailer Wholesaler Paper Value Chain Digital Value Chain Hardware Provider Software Provider Content Provider Distributor End-User 10 SAMPLE PAGE
  11. 11. KEY MESSAGES –PRODUCT LIFE CYCLE ANALYSIS • Cut-size paper in the developed market is in the maturity stage of the product life cycle whereas in Asia, cut-size is in the growth stage. • Cut-size paper consumption in developed regions was growing modestly in the 2000s. The high demand until 2005 can be explained by economic growth, a slow learning curve/costs of digital archiving and current consumer preferences. • The main reasons for a decline in demand in the USA after 2005, have been consumption trend changes due to the growing impact of electronic media and changes in economic activity and non- farm unemployment. • In Asia, the economic growth, increasing business activity and population growth are much faster than in the developed countries. The growth is estimated to continue strong next 15 years. • However in the future, access to technology, new technology platforms and above all, the adaptation to the new technologies is expected to be much faster in Asia than in the developed countries. Thus, this development will start to have faster negative impact on cut-size paper consumption and the regional maturity stage is reached around 2025. • There are differences between countries as Japan’s market is expected to move to declining stage already in the coming years but Indian market is foreseen to grow beyond 2025. Time Infancy Growth Maturity Decline Cut-size Asia Cut-size Paper Product Life Cycle 2010 2025 Cut-size USA 2005  11 SAMPLE PAGE
  12. 12. ORDER FORM ASIA: CUT-SIZE PAPER FUTURE – IS THE “PAPERLESS” OFFICE JUST AROUND THE CORNER? Contact: Peter J Kahn or Ryoko See Pöyry Management Consulting (Singapore) Pte Ltd 50 Raffles Place #38-05, Singapore Land Tower Singapore 048623 Tel: +65 6733 3331, Fax: +65 6734 6198 E-mail: peter.kahn@poyry.com; ryoko.see@poyry.com To order, please complete and return the below form. Method of payment and delivery: Please invoice me. Enclose a cheque: (made payable to Pöyry Management Consulting (Singapore) Pte Ltd) Direct bank transfer: Nordea Bank Finland Plc, Singapore Branch 3 Anson Road #22-01 Springleaf Tower Singapore 079909 Account number 5004851902 Swift Address: NDEASGSG Multi-client Study – for all subscribers (1 hard copy and pdf. File): USD 22 000 Client Specific Section and Workshop( Optional): Quote on request Particulars: Name ______________________ Position ______________________ Company ______________________ Address ______________________ _____________________ Country ______________________ Phone ______________________ Fax ______________________ Email ______________________ Step 1: Select Service Step 2: Select payment Step 3: Fill in your particulars

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