19 December 2000

Paper study finds UK world class but needs more paper machines

The British paper industry is good for the environment and needs more papermaking machines that can use recovered material if recycling rates are to rise.

These two points are key findings in a report for the Department of Trade and Industry about the competitiveness of the UK’s paper industry which is to be published next month.

The study, part paid for by the DTI has been organised by the Confederation of Paper Industries which has supervised the industry input into the study.

For recyclers, the report will highlight the urgent need for new mill capacity in the UK. With only a 40% recovery rate the UK still needs to recover more for home consumption. With paper demand growing by 3.5% per annum the study found that constraints on producing mroe recycled paper remain because many UK mills that use recycled material are running at or close to full capacity. But, with a utilisation rate of 72% of raw material, the UK industry is seen as world class in its performance.

Researchers found that the UK paper industry – from mills through to paper recyclers – employs about 340,000 people, has a turnover of 29 billion and contributes 3.5% of GDP.

Another finding of the report is the fact that the industry is good for the environment with low C02 emissions in the papermaking process and use of combined heat and power.

Transport is a big area of study in the report. It found that while the UK handles about 10 million tonnes a year, because the paper is moved around so much this equates to 30 million tonnes being moved at an average cost of 10-15 a tonne. The study is thought to question whether efficiencies can be made and also point out the importance of transport costs to an industry which is very dependent on lorries for moving material.

James Daglish, outgoing President of the CPI, said:

“The study makes a number of recommendations but the key lies, we believe, in recognising the uniquely important role the industry could play, with government and others, in forming the cradle of a “virtuous circle” which would permit the achievement of mutually important objectives.”

“The commitment of the members of the Confederation of Paper Industries to achieving these objectives is testimony to the vision of our industry”.

The virtual circle concept harks back to the idea of all sectors of the trade liasing better with each other and also agreeing to some intervention in the marketplace. Some industry members say this would be welcome whereas others fear Office of Fair Trade intervention.

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