Conflict in Eastern Europe & Paper and Pulp Industry
As upsetting as it is, Russia’s invasion of Ukraine had an impact on many industries in relation to weakening economies of countries. The tissue paper & pulp industry is one of the industries that has faced and is facing damage.
Situation in Ukraine
Eduard Litvak, the director of UkrPapir, has stated that all the paper and pulp producers suspended production on February 24 due to major conflicts with Russia. More to that, there are logistics problems that prevent Ukraine from importing. Because shipping companies want to stay clear of the war zone. This means, not only Ukraine is not able to produce on its own, but it is also almost impossible to import the needed amount while not being able to export which affects the economy badly.
Impact on the Paper and Pulp Industry
While it is reported that Ukraine has 1.2 million tons of capacity, the export of paper products to other European countries is equal to less than 2%. This means Ukraine’s, hopefully temporary, withdrawal from the industry will not have much impact on European trade.
However, Russia has been one of the most significant exporters of kinds of paper products. Due to trade restrictions, this is forecasted to result in a shortage in European countries, considering the fact that Europe keeps receiving immigrants from the warzone in addition to their existing population.
Russia’s production capacity cannot be overlooked yet the country also imports around 900.000 tons of paper and board, mostly from the EU. Now that the relations are damaged, this would be in danger too. If Russia can bear and survive the raw material importing crisis, they can keep on producing locally but this would surely take time.
How Did This Affect Europe’s Paper and Pulp Industry?
To give a more specific and further example, Italy-based packaging group Pro-Gest has announced a temporary production shutoff at all its six paper mills in Italy. The company has reported that they made this decision considering the fast escalation of natural gas prices, now that it is almost ten times higher than the past 12 months.
