Wiktorian Tarnawski
Association of Polish Papermakers, Lodz
Paper industry structure
The proprietary structure, capacities, and paper and board production in 1995 are shown in Table 1.
In comparison with the capacity in 1989, the production of large mills in 1995 was higher almost by 19 percent. Their total participation in the domestic production was 67 percent. Within the same period of time medium and small mills reached a production amounting to about 60 percent of their capacity. The participation of medium and small mills in the total domestic production is 19.5 percent and 13.5 percent, respectively. Such a situation in medium and small mills was mainly caused by the liquidation of uneconomic technological lines and their high debts, long and difficult debt liquidation procedures, and privatisation processes. Despite the lapse of seven years since the beginning of economic reforms in Poland, the privatisation of small and medium paper mills is still a live issue. At the end of 1996, the proprietary status of the paper industry and paper converting was as follows:
· 11 mills have been privatised with the participation of foreign capital;
· 6 mills are being privatised within the National Investment Funds;
· 5 mills are considered as the Oneman Ownership of the Treasury;
· 17 mills have established creditors' companies and others;
· 16 mills still remain State-owned enterprises.
The participation of the particular mills by their ownership status in the domestic paper and board production is as follows:
|
· Mills privatised by means of capital |
53 percent |
|
· Mills being Oneman Ownership of the Treasury |
40 percent |
|
· State-owned enterprises |
5 percent |
|
· Other forms of ownership |
2 percent |
Production, exports and imports
At present the market situation of the paper industry in Poland is affected by the same fluctuations that occur in developed countries. In 1996, considerable paper price decreases took place causing dissatisfaction among both the manufacturers and distributors. This brought about a limitation of production and deterioration of profitability. The most important information about the paper industry in Poland in 1994 and 1995 is given in Tables 2 and 3. As can be seen from these figures, the Polish paper industry reached good production and economic parameters in 1995. The utilisation of capacity was high, which resulted in an increase in production as compared with that of 1994.
The increase in wastepaper use and the indicators of wastepaper collection and utilisation are given in Table 4. From the comparison of data given in Tables 3 and 4, it can be noted that the consumption structure of fibre raw materials by the paper industry has been improving for several years due to the increase in wastepaper use. For instance, in 1995 the use of virgin fibres in the paper and board production was 59 percent and that of secondary fibres 41 percent.
In 1995, the Polish paper industry used about 4.1 million m3 of wood, including about 2.87 million m3 of soft wood, gaining about 3.9 million m3 of this raw material from the State-owned woodlands and the remaining being imported. This amount of raw material allowed manufactures to produce 671.2 thousand tons of chemical pulps, including 625.6 thousand tons of paper grade pulp, 45.6 thousand tons of cellulose for viscose fibres, 96.3 thousand tons of semi-chemical pulp and 112.2 thousand tons of mechanical and thermomechanical pulps. Taking into account the production, exports and imports balance, the use of virgin pulps last year in Poland was: 655 thousand tons of chemical pulps, 105.9 thousand tons of semi-chemical pulps and 118.3 thousand tons of groundwood pulps. The paper industry used 20.7 percent of the total amount of wood being on the market in Poland which was 18.8 million tons (large timber). In Poland, the grade composition of wood is dominated by pine: 69.4 percent, while the other grades include: spruce 6 percent, oak 6 percent, beech 4.1 percent, birch 5.8 percent, alder 5.3 percent, fir 2.5 percent; hence soft pulpwood amounted to 66.5 percent of the total acquisition of woodpulp.
The results of foreign trade in 1995 are given in Table 5. It can be seen that in 1995 the increase in imports, compared to 1994, was as follows: chemical woodpulp by 44.4 percent, paper by 26.7 percent, paper products by 29.1 percent, books and newspapers by 6 percent. In the case of exports, the increase was as follows: paper by 13.8 percent, paper products by 74.7 percent, books and newspapers by 51.3 percent; there was a drop in exported cellulose by 9.2 percent. Generally, imports exceed exports by 147.7 thousand tons in 1994 and by 205.6 thousand tons in 1995.
The paper consumption in Poland in recent years is shown in Table 6. It can be seen that, starting from 1992, there has been a systematic high increase in paper consumption. However, the paper consumption per caput index in Poland is still several times lower than those in developed European countries (see Figure 1).
By the end of the year 2000 the increase in GDP in Poland is foreseen to be still high (5-6 percent) and therefore the paper and board consumption is likely to grow also at a high rate.
Table 7 shows data on the production of the paper industry in 1996 compared to that in 1995. It can be seen that total paper production increased by 1.4 percent, for printing and writing about 10 percent, but for board over 27 percent. The most substantial drop took place in the manufacture of newsprint and packaging paper. The increase in the board production resulted from the starting up of the MPIV paperboard machine at the International Paper Kwidzyn.
The results of foreign trade in the first half of 1996 are shown in Table 8. In comparison with the first six months of 1995, imports in the first half of 1996 increased by 53.8 thousand tons and exports by 27.4 thousand tons.
In the first half of 1996 considerable decreases in pulp and paper prices were observed in Western Europe compared to the first six months of 1995, namely, the drops in particular grades were as follows: chemical pulps by 43 percent, uncoated woodfree offset paper (80 g/m2), coated offset paper by 6 percent, printing offset paper (81 g/m2) by 19 percent, facing board (175 g/m2) by 31 percent, fluting (114 g/m2) by 44 percent, boxboard GC2 by 11 percent and boxboard GD2 by 21 percent.
Such a considerable price drop and the limitation of production have brought about a decrease in the profitability of net pulp and paper production in Poland from on average 12.7 percent in 1995 down to 2.2 percent in the first six months of 1996.
Development of the paper industry in Poland
The major difficulties in the Polish paper industry include:
· a considerable delay in privatisation processes;· debts in mills and long-lasting procedures of debt liquidation;
· a growing deficit of raw materials (chemical and wastepaper pulps);
· the lack of financial means for modernisation to increase capacities and to improve product quality and production profitability.
These difficulties, however, have no influence on the year-by-year growing absorptive power of the Polish market for paper goods. The increase in paper product consumption, being faster than that of production capacity, causes imports to increase. The import increase is also facilitated by the accelerated process of tariff walls elimination in Poland, thus creating problems in mills under restructuring. This makes Polish mills to look for new markets and to increase exports. However, to succeed in foreign markets, one has to offer a good paper quality at low manufacturing costs, and this forces the Polish papermakers to invest in paper quality.
Within the last five years the paper mills in Poland have invested the following amounts in quality, production increase and environmental protection:
· US$ 116 million - Pulp and Paper Mill "Celuloza" S.A. This manufacturer received ISO 9002 certificate being the first one given to the Polish paper industry;· over US$ 200 million - International Paper - KWIDZYN S.A. This mill implemented the alkaline process of paper production on two machines in mid-July 1995 and therefore improved the paper quality, including several properties of interest for customers such as: an increased paper resistance to ageing, a higher web strength, better printability, whiteness, sheet formation and dusting reduction. The mill has also launched a production of coated boards;
· US$ 75 million - "INTERCELL" S.A., Ostroleka, to modernise paper machines and paper converting lines;
· US$ 50 million - Kostrzyn Paper Mill S.A., to modernise PM II and to construct paper converting lines;
· US$ 2 million - "SILESIANPAP" S.A., to erect waste water treatment plant and paper machines;
· US$ 1.5 million - Warsaw Paper Mill S.A., to modernise stock preparation departments, to computerise PM 3 and to modernise steam boilers;
· US$ 530 thousand - Krapkowice Paper Mill S.A., mainly to modernise their heat and power generating plant and waste water treatment plant.
Modernisation work was also carried out or still is in progress in many other mills such as: Paper Factory "Szczecin-Skolwin" S.A., Glucholazy Paper Mill, Bydgoszcz Paper Mill, Paper Factory - Dabrowica, "Maltadecor" Paper Mill. The latter factory has recently received ISO 9001 certificate as the second paper mill in Poland.
The investments in the paper industry are very capital-intensive, hence the paper mills urgently search for strategic investors who would accelerate the modernisation processes by using an appropriate capital, which in turn would make it possible for the paper mills to adapt faster to the market economy. Taking into account the currently performed modernisation processes, the production capacities of the pulp and paper industry can be evaluated as follows:
|
· Wood pulps |
700 thousand tons |
|
· Other virgin pulps |
220 thousand tons |
|
· Pulped wastepaper |
630 thousand tons |
|
· Total pulps |
1 550 thousand tons |
|
· Paper and board |
1 700 thousand tons |
Considering the capacity utilisation index in the manufacture of paper and board, which amounts to 90 percent, one has to expect a production at a level of 1.53 million tons, which with the foreseen paper consumption in Poland amounting to 1 700 thousand tons will force a credit balance (imports minus exports) at a level of about 170 thousand tons of paper and paper products. The results of the first half of 1996 seem to confirm this prognosis.
From the balance of pulps given above it can be foreseen that in the near future, to produce 1.7 million tons of paper with a 54.4 percent consumption of virgin pulps, there will be a lack of 145 thousand tons of pulp.
In order to maintain a proper proportion between virgin pulps and wastepaper pulps, the missing amount of pulp should be looked for in an increased recovery and processing of domestic wastepaper.
The Association of the Polish Papermakers, in the past two years, has brought to the attention of government bodies the situation connected with the collection and processing of wastepaper in Poland. On the one hand, the collection of wastepaper in Poland is too low compared to those western countries leading in the collection of wastepaper, and on the other hand, the processing of wastepaper in the paper industry is insufficient, mainly due to the lack of wastepaper deinking installations, allowing the use of pulped wastepaper to produce white papers.
The efforts of the Association in this regard yielded in the form of financial means granted by PHARE with the support of the Ministry of Industry and Trade to develop a restructuring programme of fibrous raw material consumption by the pulp and paper industry in Poland, i.e. the "Waste Paper Programme".
It is hoped that in 1997 the selected consultant will start to develop this programme on the basis of experiences of the countries where the collection of wastepaper is very high, determining legal, organizational and technical conditions, as well as an educational programme for the society, necessary to increase the collection and processing of wastepaper. This should bring about improvements in environmental protection and in the structure of fibrous raw material consumption by the paper industry.
It is expected that the programme will result in:
· Determination of the conditions for effective wastepaper collection from industrial and municipal sources in such a way as to avoid the wastepaper disposal on dumping grounds, which would make it possible to reach a collection index of about 40 percent by the year 2000, about 45 percent by 2005 and about 50 percent by the year 2010.· Determination of organizational, educational, technological, economic, legal and ecological conditions to meet the increased Polish papermakers' needs for suitable ranges of wastepaper.
· Indication of the best solutions to cope with quantitatively increased and qualitatively differentiated wastepaper processing.
Conclusions
· Over 50 percent of the paper industry capacity in Poland has been privatised with the use of foreign capital.· The best production and economic results are now obtained by large paper mills, their participation in the domestic production being 67 percent.
· Despite the lapse of seven years since the beginning of the economic reforms in Poland, the privatisation of medium and small paper mills is still a live issue.
· As from 1992, there has been a systematic increase in the paper production and consumption in Poland. In 1995 this increase was 11 percent and 13 percent respectively. Nevertheless, the paper consumption per caput (41 kg) is still several times lower than that in the EU countries. As the high economic growth (GDP 5 to 6 percent) is foreseen to be maintained to the end of year 2000, it should be expected that the paper consumption will also increase.
· The paper consumption rate in Poland has grown faster for several years than that of paper production. This has resulted in a systematic increase in paper imports.
· In the light of these facts, there are activities being carried out in Poland aiming at establishing incentives for foreign investors to invest in the production capacity of the paper industry.
References
· "Rocznik statystyczny 1995 and 1996" (Year book in Polish), ISSN 0079-2780, Warsaw, Poland.· Pulp and Paper International, Annual Review on World Pulp and Paper, PPI, July and September, 1996.
· Information Bulletin (in Polish) of the Association of the Polish Papermakers, 1996.
· CEPI Documents on General Assembly in 1996.
Table 1: Pulp and paper mills in Poland according to 1995 data
|
No. |
Current name |
Ownership status |
Paper and board capacity in 1989 |
Paper and board production in 1995 |
4 to 3 ratio |
|
(thousand tons) |
(thousand tons) |
% |
|||
|
(1) |
(2) |
(3) |
(4) |
(5) |
|
|
1. |
ZCiP "Celuloza" S.A w Swieciu n. Wisla |
JSSPa |
379.0 |
428.0 |
113.0 |
|
2. |
IP - Kwidzyn S.A. |
Foreign capital |
270.0 |
332.4b |
123.1b |
|
3. |
Intercell S.A Ostroleka |
Foreign and domestic capital |
183.0 |
228.6 |
124.9 |
|
|
Total |
|
832.0 |
989.0 |
118.9 |
|
4. |
FP "Szczecin-Skolwin" S.A. |
JSSPa |
122.0 |
69.5 |
56.9 |
|
5. |
ZP w Krapkowicach S.A. |
Creditors' type company |
95.0 |
62.0 |
65.3 |
|
6. |
Kostrzynskie ZP S.A. |
Foreign capital |
86.0c |
50.6 |
58.8c |
|
7. |
FP S.A. w Myszkowie |
JSSPa |
83.0 |
48.8 |
58.8 |
|
8. |
Warszawskie ZP S.A. |
NFId |
90.0 |
55.4 |
61.6 |
|
|
Total |
|
476.0 |
286.3 |
60.0 |
|
9. |
About 30 mills with an annual paper and board production of below 20 thousand tons |
1. State-owned enterprises |
347.0 |
204.2 |
58.8 |
|
10. |
Total |
|
1 654.0 |
1 479.5 |
89.3 |
aOneman ownership of the State Treasury.
bWithout board production (modernisation of PM 4).
cCurrent capacities should be higher, but the figures are not available from the mill.
dNational Investment Fund.
eLeasing from the State Treasury.
fPrivate company Ltd.
Table 2: Economic results of the Polish paper industry
|
Specification |
1994 |
1995 |
I-VI 1996 |
|
Average employment |
35 000 |
36 000 |
37 000 |
|
Average payment without profit (zl) |
560.3 |
833.5 |
974.4 |
|
Receipts from sales (million zl) |
2 293.1 |
4 206.4 |
2 201.5 |
|
Sale results (million zl) |
219.1 |
758.2 |
168.6 |
|
Net sale results (million zl) |
17.6 |
550.5 |
51.1 |
|
Net profitability index (%) |
0.7 |
12.7 |
2.2 |
|
Participation of mills with net profit (%) |
67.4 |
79.2 |
76.5 |
|
Participation of mills with net receipts (%) |
80.6 |
92.8 |
69.6 |
|
Sold production price index (%) |
133.9 |
158.8 |
90.6 |
|
Investment outlays (million zl) |
453.5 |
509.6 |
180.7 |
Table 3: Pulp and paper production in Poland
|
Product |
1994 |
1995 |
95/94 (%) |
||
|
Groundwood (thousand tons) |
98.3 |
112.2 |
114.0 |
||
|
Semi-chemical pulps (thousand tons) |
99.6 |
96.3 |
- |
||
|
Pulps: (thousand tons) |
644.4 |
671.2 |
104.1 |
||
|
|
- sulfite pulp (thousand tons) |
0.7 |
0 |
- |
|
|
- kraft pulp (thousand tons) |
598.7 |
625.6 |
104.5 |
||
|
- textile viscose pulp (thousand tons) |
45.0 |
45.6 |
- |
||
|
Papers up to 250 g/m2: (thousand tons) |
1 198.8 |
1 334.7 |
111.3 |
||
|
|
- newsprint (thousand tons) |
67.6 |
95.4 |
141.1 |
|
|
-printing, writing and drawing paper (thousand tons) |
336.0 |
389.1 |
115.8 |
||
|
- printing paper (thousand tons) |
176.4 |
193.6 |
109.7 |
||
|
- packaging paper (thousand tons) |
691.8 |
726.0 |
104.9 |
||
|
- technical paper: (thousand tons) |
17.1 |
22.5 |
131.6 |
||
|
|
- backing paper (thousand tons) |
12.5 |
18.2 |
145.6 |
|
|
- cigarette paper (thousand tons) |
0.4 |
0.4 |
- |
||
|
|
-absorbent, filtration and hyg. papers (thousand tons) |
86.3 |
100.0 |
115.9 |
|
|
Board: (thousand tons) |
127.4 |
142.0 |
111.4 |
||
|
|
- binder and box-board (thousand tons) |
67.6 |
79.9 |
118.2 |
|
|
- building board (thousand tons) |
45.6 |
45.3 |
- |
||
|
Corrugate board (thousand tons) |
237.2 |
271.4 |
114.4 |
||
|
Cardboard box products (thousand tons) |
226.3 |
274.1 |
121.1 |
||
|
Paper bags (million pieces) |
363.2 |
410.0 |
112.9 |
||
|
Copy books (million sheets) |
6 871.0 |
7 283.0 |
106.0 |
||
Table 4: Waste paper management in Poland
|
Specification |
1992 |
1993 |
1994 |
1995 |
|
Waste paper used (thousand tons) |
395 |
375 |
492 |
601 |
|
Imports (thousand tons) |
53 |
25 |
39 |
72 |
|
Exports (thousand tons) |
0 |
0 |
4 |
6 |
|
Domestic wastepaper (thousand tons) |
342 |
350 |
475 |
535 |
|
Use index (%) |
34 |
32 |
37 |
41 |
|
Collection index (%) |
29 |
27 |
31 |
34 |
Table 5: Foreign trade of paper products in Poland (thousand tons)
|
Product (according to PCN) |
Imports |
Exports | ||
|
|
1994 |
1995 |
1994 |
1995 |
|
Wood pulp |
104.9 |
151.5 |
76.1 |
69.1 |
|
Paper, board, cigarette paper |
341.1 |
432.1 |
294.8 |
335.5 |
|
Paper and board products |
108.0 |
139.4 |
104.7 |
182.9 |
|
Books, newspapers, maps |
76.7 |
81.3 |
7.4 |
11.2 |
|
Total |
630.7 |
804.3 |
483.0 |
598.7 |
Table 6: Paper and board production and consumption in Poland
|
Specification |
1992 |
1993 |
1994 |
1995 |
1996 |
|
Production (thousand tons) |
1 147 |
1 184 |
1 326 |
1 477 |
1 524 |
|
Total consumption (thousand tons) |
1 174 |
1 292 |
1 445 |
1 600 |
- |
|
Paper consumption in kg per caput |
30.5 |
33.5 |
38.0 |
41.4 |
- |
Table 7: Production of the paper industry in Poland in 1996
|
No. |
Specification |
Production (thousand tons) |
Rate 1996/1995 |
|
1. |
Woodpulps |
688.0 |
102.5 |
|
2. |
Papers-total |
1 345.0 |
101.4 |
|
3. |
Newspapers |
85.5 |
89.7 |
|
4. |
Printing, writing and drawing papers |
430.0 |
110.8 |
|
5. |
Packing papers |
697.0 |
96.1 |
|
6. |
Board |
179.0 |
127.7 |
|
7. |
Paper bags in million pieces |
390.0 |
96.5 |
|
8. |
Copy books in million sheets |
8 045.0 |
127.1 |
Table 8: Foreign Trade of paper products in Poland in the first half of 1996
|
Product (according to PCN) |
Imports (thousand tons) |
Exports (thousand tons) |
||
|
first half 1995 |
first half 1996 |
first half 1995 |
first half 1996 |
|
|
Wood pulp |
76.6 |
72.6 |
29.7 |
47.0 |
|
Paper, board, cigarette paper, |
276.8 |
333.8 |
276.5 |
285.1 |
|
Books, newspapers, maps |
33.8 |
34.6 |
3.1 |
4.6 |
|
Total |
387.2 |
441.0 |
309.3 |
336.7 |
Supplement
Table A: Paper and board consumption and production in countries of Central and Eastern Europe in 1995
|
No. |
Countries |
GDP |
Consumption |
Production |
4-2 |
|
|
US$ per caput |
million tons |
kg per caput |
million tons |
million tons |
||
|
1 |
2 |
3 |
4 |
5 |
||
|
1. |
Bulgaria |
1 224 |
0.250 |
29.5 |
0.209 |
-0.041 |
|
2. |
Czech Republic |
2 538 |
0.693 |
67.1 |
0.738 |
+0.045 |
|
3. |
Estonia |
|
0.043 |
28.5 |
0.002 |
-0.041 |
|
4. |
Lithuania |
1 162 |
0.037 |
10.0 |
0.027 |
-0.010 |
|
5. |
Latvia |
1 778 |
0.070 |
27.5 |
0.007 |
-0.063 |
|
6. |
Poland |
3 057 |
1.534 |
41.4 |
1.494 |
-0.040 |
|
7. |
Russia |
2 224 |
2.362 |
16.0 |
4.070 |
+1.708 |
|
8. |
Romania |
1 141 |
0.345 |
15.2 |
0.361 |
+0.016 |
|
9. |
Slovak Republic |
1 918 |
0.362 |
64.5 |
0.468 |
+0.106 |
|
10. |
Ukraine |
2 090 |
0.620 |
12.0 |
0.284 |
-0.336 |
|
11. |
Hungary |
3 703 |
0.509 |
49.6 |
0.321 |
-0.188 |
|
|
Total |
- |
6.843 |
- |
7.981 |
+1.857 |
Table B: Paper and board demand and supply on the markets in countries neighbouring with those mentioned in Table A
|
No. |
Country |
GDP |
Consumption |
Production |
4-2 |
|
|
US$ per caput |
million tons |
kg per caput |
million tons |
million tons |
||
|
1 |
2 |
3 |
4 |
5 |
||
|
1. |
Austria |
28 971 |
1.550 |
194.0 |
3.599 |
+2.049 |
|
2. |
Finland |
24 658 |
1.433 |
176.0 |
10.841 |
+9.390 |
|
3. |
Germany |
29 569 |
15.606 |
201.0 |
14.821 |
-1.007 |
|
4. |
Sweden |
25 946 |
1.857 |
211.0 |
9.169 |
7.312 |
|
|
Total |
- |
20.793 |
- |
38.537 |
+18.751 |
Fig. 1: Gross domestic product (GDP) and paper consumption (PC) in selected countries in 1995
