Internet and Mobile Computing to Stir the Pulp and Paper Industry in the Next Ten Years
20 September 2010
Leatherhead UK, 20 September, 2010. Internet and mobile computing-related technologies will have the strongest influence on the global pulp and paper industry in the period up to 2020 according to new research from Smithers Pira. The technologies occupy six of the top ten in a ranking of 25 potentially disruptive technologies. Whilst a number pose a threat to the industry, many will create opportunities which can be exploited across the supply chain.
The findings are from a new Smithers Pira study which anticipates developments in technology likely to cause big changes in the competitive situation of pulp or paper-related products over the next decade. Ten-Year Forecasts of Disruptive Technologies in Paper and Board to 2020 identifies the top 25 most influential technologies and examines each to assess the likely impact by 2020. The study launches in the year that Smithers Pira celebrates 80 years as an authority on the packaging, paper and print industry supply chains.
The report comes at a critical time for the industry according to Smithers Pira's Senior Paper Consultant Graham Moore: "The industry needs to monitor and, where appropriate, exploit the opportunities offered by disruptive technologies. Such a need is even more important today, as some sectors, notably printing and writing, face decreasing demand brought about by the effect of disruptive technologies. The ability to take a wider view of the opportunities will eventually be a differentiator between those companies that survive and flourish, and those that fail."
Technologies ranked 1, 2, 3, 4 and 6 in the study (online news, tablet computing, e-commerce, e-books and paper plus digital archiving technologies) are all internet-related. Smithers Pira expects the internet will have a pervasive effect on demand, especially for printing and writing paper, and the bleached kraft pulp used in its manufacture.
Moore explains that developments in electronic media are changing business practices and leisure pursuits that once were the preserve of paper: "This loss of demand will not be restored and further rationalisation and consolidation of the paper manufacturing base looks certain. However, the threat of declining demand means the opportunities offered by papermaking fibres beyond paper - for example as a structural component - should be exploited. Companies that choose to ignore such developments or are simply unable to muster the resources needed to explore them, have an uncertain future."
News on the internet was ranked number one in the study and is expected to have the greatest disruptive effect on the pulp and paper supply chain over the coming decade. The increasing availability and functionality of online news means that there will probably be lower revenue for traditional news publishers as ads and news features migrate to digital alternatives. The threat to the pulp and paper industry is very significant here with pulp and paper volumes expected to decline. Despite this, there may be persistent demand from readers who prefer hard copy or do not have good internet access, and advertisers who want to use paper to get images in front of a broader range of potential customers.
Ranked second, tablet computing also poses a significant threat, partly due to its potential to amplify other disruptions, including news on the internet. The threat lies in the fact that tablets do not assume the use of a dedicated printer - consequently users will decrease their overall reliance on printouts. Therefore tablets are poised to affect mainly printing and writing paper and the associated supply chain. At the same time it is important to remember that tablets yet have to gain their share in a very competitive marketplace and their long-term success is not certain.
As opposed to many other internet-related technologies, internet shopping is likely to be more of an opportunity for the paper industry. This is because the transition from store-based to internet-based sales will require changes in the kinds of packaging required. A greater amount of packaging material will probably be needed to send individual orders to clients instead of sending large batches to high-street stores. According to Smithers Pira, this trend creates opportunities for the industry, as new packaging product lines can be developed to better suit the needs of e-commerce. For example, appearance may become less important than resistance to damage.
Aside from some obvious threats, Smithers Pira highlights a number of opportunities for the industry including airlaid papermaking, cellulosic bioenergy, innovative packaging and web formed composites. Moore indicates two particular areas of interest: innovative packaging and web formed composites - both revolving around innovation. "For those companies that are able to successfully develop and implement disruptive technologies either to improve the manufacturing process or to exploit paper based opportunities, the future looks brighter and more assured."
Smithers Pira expects increased turnover rates in manufactured items to create many opportunities for packaging innovation. Packaging is a core area of the pulp and paper supply chain and the there will be opportunities for the industry to play to its strengths. Severe competition from other kinds of materials, especially plastics, will probably continue. Smithers Pira also expects to see many more hybrid packages in which paper is combined with other materials.
Web-formed composites are almost an ideal paper product: innovative, very profitable and able to be made on existing equipment. The may capture market share from other technology because the papermaking operations are quick and relatively cheap. Advances in chemical technology for papermaking are broadening the range of compositions that can be formed into a paper-like sheet on a conventional paper machine.
"Disruptive" technologies are understood as those which have the potential to displace current technologies, take away customers from existing businesses and force the latter to compete in new ways. The work on the report started with thorough desk research, used to create a long list of potentially disruptive technologies. The second step gathered detailed input on the candidate technologies from a panel of 25 experts and business leaders related to the pulp and paper supply chain. Their responses were tabulated using a special procedure that took into account the potential impact but also success probability of individual technologies. Finally, the top 25 technologies were analysed in detail in terms of their current technical advancement, development direction and the mechanism of potential influence on the pulp and paper industry. Smithers Pira's own forecast and comments, independent of the panel results, were also provided for each technology.
Ten-Year Forecasts of Disruptive Technologies in Paper and Board to 2020 is available now for £3,750. For more information, please contact Stephen Hill at +44 (0) 1372 802025, or via e-mail on stephen.hill@smitherspira.com
Press contact: For editorial queries, details of the study or an expanded article please contact: Rebecca Leigh +44(0)1372 802207 rebecca.leigh@smitherspira.com
Smithers Pira
Smithers Pira - the worldwide authority on packaging, paper and print industry supply chains.
Established in 1930, Smithers Pira provides strategic and technical consulting, testing, intelligence and events to help clients gain market insights, identify opportunities, evaluate product performance and manage compliance.