Chinese paper industry outlook and forecast, 2013-2018

After completing the market analysis of the Indian paper industry, we at xInvest Consultants recently completed a report on the Chinese paper and paperboard market.  As you know, we publish executive style reports that are concise and ideal for a presentation.  Our findings conclude that the Chinese paper demand is finally slowing down after a run of two decades.  In 2013, Chinese paper demand was 97.8 million tonnes valued at $64.9 billion.  This was lower than most forecasts from the past and our analysis shows that during the period 2014-2018, the demand will grow only at 4.2%.  This means that in 2018, the market size will be approximately 120 million tonnes valued at $798.8 billion.

Our report Chinese Paper Industry Current Outlook and Forecast to 2018, we have concluded that maybe generous subsidies from the Chinese Government may have helped in the short-term, they have done long-term harm to the industry.  The government is reacting by shutting down dozens of plants in the hope of eliminating capacity, but the process will be painful.


Indian paper industry outlook and forecast, 2013-2018

The Indian paper industry has benefited from the rapid growth in the economy.  During the period 2003-2013, per capita paper consumption has doubled from approximately 11 lbs to 24 lbs, but this is way below the numbers for the developed world.  In fact, it is even lower than the paper consumption seen in other emerging economies like China.

In the latest report titled Indian Paper Industry Overview: Current Outlook and Forecast to 2018, we have analyzed the Indian market and concluded that the current market is approximately 29 million pounds (13.1 million tons) valued at nearly ten billion dollars.  Because we do not expect India to follow the traditional patterns of growth in consumption of paper, we are forecasting a moderate rate of growth of nearly 7%.  Our analysis shows that despite a burst of demand from the print media due to rising incomes, this consumption will slow down fairly quickly as consumers take advantage of smartphones and other electronic devices that will be connected to Wi-Fi networks.  We are expecting that as living standards improve, Indians will consume more packaging and hygiene products.



High Performance Polymers Market Overview and forecast

In collaboration with Principia Consulting, I coordinated a massive research effort to analyze the global high-performance polymers business.  The resins that were covered included poly-aryl-ether-ketones (PAEK, PEEK, PEK, PEKK, PEKKEK, and blends such as PEEK/PBI and PEEK/PPSU), high performance polyamides including amorphous versions (PAMXD6, PA46, PA4T, PA6T, PA9T, PA10T, PA6I/6T, PA6/3T, PA6I, a-PA12), fluoropolymers (PTFE, FEP, PVDF, and ECTFE), liquid crystal polymers (LCP), poly-aryl-ether-sulfones (PSU, PES, and PPSU), polyphenylene sulfide (PPS), and polyimides (PEI, TPI, and PAI).  My team conducted a comprehensive search on a global basis for information and then validated it with industry insiders.

What we concluded was that the global economy has not been very kind to the polymer suppliers and new capacity added by Chinese manufacturers is hurting suppliers based in the United States, Western Europe, and Japan.  Despite this, due to insatiable appetite of consumers in emerging economies like China and India, I am expecting a growth rate for these polymers in the neighborhood of 7 per cent per year to 2018.  This should translate to a ten billion dollar market.

As many of you know this is a very sophisticated market with customers who require the kind of attention that requires enormous technical resources.  Imagine getting a polymer specified by Boeing or an oil/gas company.  The report not only provides market and growth data but also discusses trends, growth drivers, and developments in all the major market segments.

Access to this report is by subscription and that includes ability to manipulate all the underlying data as per your needs.  In addition, a year from now, you can input latest data and get updated forecasts.  If you are engaged in strategic planning or want to understand the competitive dynamics and would like to subscribe to this report, please contact me by using this page.

Partnership along the value chain

One of the biggest mistakes business executives make is to not realize how critical relationships along the value chain are for them to thrive and prosper.  Let us briefly discuss how this happens.

Relationships with suppliers:  Since there is so much emphasis on lowering costs and companies often reward managers on lowering costs, their immediate reaction is to push their suppliers for lower prices and/or for more products/services.  Remember that for your supplier, you are a customer (and we will get to that dynamic momentarily), and their mission is to get the highest price possible and give away the least amount in return.  This confrontational business approach serves neither.

Relationship with customers:  Since goals and reward systems are in place to get the highest price possible for lowest amount of offering, we often treat our customers as our enemies really.  Any customer who senses this tension is unlikely to appreciate your situation and is more likely to push for more.  Yet again, this confrontational approach helps no one.

We are all in this together


Image of a collaborating approach to doing business in the value chain.



As shown above, we at xInvest Consultants believe that if we align our goals with those of players up and down the value chain, we can all win.  The competitive, confrontational approach may yield short-term benefits, but it simply beats everyone otherwise.

In that sense, I like the approach taken by Wal-Mart with some of its private label suppliers.  Wal-Mart buyers spend time understanding the process and the manufacturing economics of their suppliers and then agree on a price that works for both.  No wonder that so many private label companies gladly supply thousands of products to the company and it is a win-win approach.

About the author: Jay Dwivedi is a management consultant who helps companies think through their business problems to increase profits and sales.  He maybe reached by following the Contact links above on this page.