Global Recovered Paper Industry Outlook

  • Major exporters, like the US and the EU, are witnessing negative or minimum growth rates after the import restrictions in China
  • The sustainability regulations in China have become a major challenger for the global recyclers
  • The domestic recycling rate in China is expected to increase, due to the shortage of imports

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Major Certifications for Recycling Plants 

FSC

  • The FSC Recycled label means all the wood or paper in the product comes from reclaimed (re-used) material
  • Retailers selling products they have not made themselves may apply to use the FSC logo without being certified. They are only allowed to use the logos to promote the FSC-certified products that they sell

RIOS

  • The Recycling Industry Operating Standard™ (RIOS™) is an integrated Quality, Environmental, Health and Safety Management System Certification 
  • By integrating the management system, recyclers are able to more effectively manage their system, which results in stronger health and safety programs, greater environmental responsibility, and better operational efficiency

Global RCP - Market Overview

  • The global recovered paper demand is expected to increase at a CAGR of 2–3 percent until 2021
  • Asia (dominated by China and India) was the major driver of demand with US and EU being the prime exporter of recovered paper, globally. However, with sustainability regulations in China, the exporters will be largely affected. China will have to try and scale up its recovery rate to reduce dependencies on the US and the EU

Global RCP End-use Market

  • Europe and APAC are the major regions that use recycled paper for containerboard production 
  • While 95 percent of the total containerboard produced in APAC is made from RCP, the value is 82 percent for Europe (combining WE and EE) 
  • Similarly, for boxboard, 67 percent is recycled in APAC, whereas in Europe, it accounts for 51 percent of the total boxboard produced 
  • The demand for newspaper and printing & writing paper has been on a continuous decline in the developed regions, and its share is expected to decrease even further by 2019
  • Tissue share is expected to increase, mainly driven by the developing regions, like APAC and LATAM

Regional Cost Structure of RCP

  • The cost of raw material is lower in regions, like North America and Europe, because of the ease in availability of raw materials
  • In Asia, owing to low recovery rate, raw material is imported from these regions, pushing the share higher
  • On the other hand, labor availability and average labor costs are much lesser in Asia compared to North America and Europe, bringing the labor cost contribution down
  • Other costs constitute to various verticals, like marketing, sales and distribution, general administration, and financing