Almost every business and industry in the world has been impacted in some way by the Covid-19 pandemic. Now here we are over two years down the line, and despite things looking more positive, many industries are still feeling the effects of the pandemic.
One industry that has felt unparalleled effects of Covid-19 is the paper and pulp industry. Disruptions to supply chains hit the industry hard, with transportation and logistics feeling the full effects. Accompanied by rising freight costs, the availability of freight vessels became scarce throughout the pandemic, resulting in continuous delays in delivery deadlines. In addition, paper mills had to adapt to changes in regulation with social distancing measures, building on the heap of issues facing supply chains.
The price of raw materials exponentially increased due to the pandemic, causing major issues to the obtainability of paper products across the globe. Since the outbreak of Covid-19 back in 2020, the price of pulp has increased from approximately £500 per tonne to highs of £900. As the price of raw materials grew, so did the demand for paper products. Demand for hygiene products soared, as well as packaging, as a result of the consumer shift towards online shopping throughout the pandemic. Both of these factors, along with the increased cost of raw materials, resulted in the availability of paper products declining over the last 18 months.
To gain more insight into the recent challenges pressing the industry, we caught up with Amanda and Phil from our Procurement team to reflect on the hurdles they have had to tackle since the Covid-19 pandemic started.
“There have been so many delays and staff shortages the past couple of years in mills, warehouses and across the supply chain in general. This in conjunction with unpredictable markets has been just some of the challenges we have faced because of Covid.”
“In order to tackle the challenges faced from the Covid-19 pandemic, we have very much relied on strong existing relationships with supplier partners. However, we have also had to create many new relationships to help provide as much adaptability as possible to often changing circumstances.”
Despite the various challenges the paper industry has faced throughout the pandemic, many believe that the industry is beginning to emerge from this period of trials and tribulations.
Is the Paper & Pulp Industry Beginning to Look More Positive?
A recent report conducted by Cepi provides evidence that the paper industry is starting to recover from the difficult period resulting from the Covid-19 pandemic. Although the expenditure on paper products decreased by 6.6% back in 2020, levels have increased by 5.8% in 2021, which shows the market is starting torecuperate.
As mentioned, consumer movement toward e-commerce shopping habits dramatically increased due to Covid-19, which has now switched to being a positive for the paper and pulp industry. The report from Cepi concluded the production of packaging had increased by approximately 7.1% in 2021 compared to 2020.
The report also refers to the encouraging rise in demand for paper being partly down to companies appealing to the rise in consumer demand for sustainable packaging alternatives. Consumers are now more environmentally aware than ever before, with fewer than 8% of UK residents not concerned with sustainability when making purchasing decisions. To keep up with consumer demand, more and more organisations are converting to sustainable packaging solutions, thus increasing the overall demand for packaging.
Read the full report from Cepi to find out how the paper and pulp industry is beginning to bounce back after the effects of Covid-19.