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    • Manufacture Paper Paper Products South Africa

    The Manufacture of Paper and Paper Products in South Africa 2022

    Carole Veitch | South Africa | 17 June 2022

    The Manufacture of Paper and Paper Products in South Africa 2020

    Carole Veitch | South Africa | 31 March 2020

    The Manufacture of Paper and Paper Products in South Africa 2018

    Carole Veitch | South Africa | 02 October 2018

    The Manufacture of Paper and Paper Products in South Africa 2016

    Carole Veitch | South Africa | 19 August 2016

    The Manufacture of Paper and Paper Products in South Africa 2015

    Carole Veitch | South Africa | 06 April 2015

    Report Info

    Report Summary Table of Contents
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    Report Coverage

    This report focuses on the manufacture of paper, pulp and paper products, and includes comprehensive information on the size and state of the industry, production and consumption, recycling, trends, the performance and development of major players and corporate actions. There are profiles of 35 companies including Mondi and Sappi, both recognised players internationally, multinationals such as Kimberly-Clark and notable local companies such as Mpact, Corruseal Group, Neopak and Tetra Pak.

    Introduction

    • South Africa is a major player in key pulp and paper segments in the region and globally. \r\n
    • The country is one of the world’s largest producers of dissolving wood pulp and is the largest producer of pulp, paper and paper products on the continent. \r\n
    • Demand for most pulp and paper grades is strong and business appears to be booming. \r\n
    • The shift away from single-use plastic packaging and the growth of online retailing and food delivery are driving demand for recyclable/renewable paper bags, corrugated boxes and lightweight and thermal paper-based packaging. \r\n
    • Demand for writing paper and newsprint has declined due to digital migration, leading some industry players to diversify to focus on higher-margin products with more sustainable revenue streams such as packaging, pulp, tissue and speciality papers. \r\n
    • Anti-plastic sentiment has created a growing market for sustainable packaging.\r\n
    • Panic-buying and stockpiling of toilet paper and other products has moderated, while online shopping continues to fuel demand for packaging. \r\n
    • Tight market conditions and supply and demand imbalances continue to drive up prices.\r\n

    Strengths

    • Over 80% of South Africa’s commercial plantations are internationally certified by the Forest Stewardship Council.
    • South Africa is ranked amongst the largest dissolving pulp producers in the world.
    • South Africa’s paper recovery rate is well above the global average and 54% of locally-manufactured paper products contain recycled paper/paper products.
    • The industry is globally and regionally competitive, with Sappi and Mondi regarded as major players in Europe and North America, Nampak and Mpact commanding major shares of sub-Saharan Africa’s packaging market and Twinsaver dominating the regional tissue market.
    • The paper industry is carbon neutral.
    • The pulp and paper sector is one of the largest producers of renewable biomass fuel in South Africa.
    • The South African pulp and paper industry is established and well-regulated, and provides around 165,000 jobs.
    • There is a high level of research and development.

    Weaknesses

    • For small growers, certification and the procurement of water licences are complex and lengthy processes.
    • High transportation costs due to inadequate road and rail networks and port inefficiency.
    • Pulp and paper mills are water and energy intensive.
    • Suitable forestry land is in short supply. Most of the land that is appropriate for the development of new plantations either belongs to traditional authorities, or is the subject of land claims.
    • The Sappi-Mondi duopoly dominates domestic pulp production.
    • The sector has a shortage of skilled personnel, particularly graduates with technical expertise.

    Opportunities

    • Commercialising alternative sources of nonwood fibre such as sugar cane waste, bamboo and sisal.
    • Conversion of recoverable waste paper into recycled paper fibre.
    • Developing paper-based product innovations to replace plastic.
    • Exporting packaging and tissue products to sub-Saharan Africa.
    • Production of lightweight packaging.
    • The harnessing of biowaste and conversion of pulp mills into biorefineries.

    Threats

    • Cheap paper imports undermine locally-produced goods.
    • Civil unrest.
    • Climate change-related shocks, notably floods, wildfires and droughts.
    • Economic pressures.
    • Global supply chain disruptions.
    • New COVID-19 variants and mutations.
    • Policy uncertainty on land expropriation and land restitution.
    • The impact of the Russia-Ukraine war on global security, energy prices and food security.
    • Variables such as exchange rate fluctuations and the volatility of raw material prices.

    Outlook

    • The rapid growth of ecommerce continues to drive demand for lightweight packaging. \r\n
    • The migration from plastic packaging to paper alternatives is expected to accelerate. \r\n
    • The local tissue market is expected to remain relatively subdued. \r\n
    • Digital formats are steadily replacing print and the newsprint segment remains in decline.\r\n
    • Given the current COVID-19 lockdown in China and trade sanctions against Russia, the global pulp market is expected to be volatile. \r\n
    • Major players have healthy order books and appear well-positioned to capitalise on opportunities.

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    The Manufacture of Paper and Paper Products in South Africa
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    Table of Contents

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    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Value Chain 4
    2.2. Geographic Position 7
    2.3. Size of the Industry 9
    2.4. Key Success Factors and Pain Points 11
    3. LOCAL 12
    3.1. State of the Industry 12
    3.2. Key Trends 15
    3.3. Notable Players 15
    3.4. Trade 19
    3.5. Corporate Actions 25
    3.6. Regulations 25
    3.7. Enterprise Development and Social Economic Development 27
    4. AFRICA 29
    5. INTERNATIONAL 35
    6. INFLUENCING FACTORS 43
    6.1. COVID-19 43
    6.2. Economic Environment 44
    6.3. Labour 46
    6.4. Environmental Issues 48
    6.5. Technology, Research and Development (R&D) and Innovation 50
    6.6. Government Support 51
    6.7. Input Costs 52
    6.8. Cyclicality 53
    7. COMPETITIVE ENVIRONMENT 54
    7.1. Competition 54
    7.2. Ownership Structure of the Industry 55
    7.3. Barriers to Entry 55
    8. SWOT ANALYSIS 56
    9. OUTLOOK 57
    10. INDUSTRY ASSOCIATIONS 58
    11. REFERENCES 58
    11.1. Publications 58
    11.2. Websites 60
    APPENDIX 1 61
    Summary of Notable Players 61
    COMPANY PROFILES 66
    Bidvest Paperplus (Pty) Ltd 66
    Castle Paper Rolls CC 69
    Continental Paper and Packaging CC 71
    Convert-A-Roll CC 73
    Corruseal Group (Pty) Ltd 75
    Crystal Paper Group (Pty) Ltd 78
    CTP Ltd 80
    Dynamic Fibre Moulding (Pty) Ltd 84
    Filtracell (Pty) Ltd 86
    Gayatri Paper Mills (Pty) Ltd 88
    Green Home Products (Pty) Ltd 90
    Henmin Filters (Pty) Ltd 92
    Huhtamaki South Africa (Pty) Ltd 94
    International Tube Technology (Pty) Ltd 97
    Kimberly-Clark of South Africa (Pty) Ltd 99
    Magic Tissues (Pty) Ltd 101
    Main Street 1310 (Pty) Ltd 103
    Mogwele Waste (Pty) Ltd 105
    Mondi South Africa (Pty) Ltd 107
    Mpact Ltd 110
    Nemuno Banga Africa (Pty) Ltd 115
    Neopak (Pty) Ltd 117
    New Era Labels (BOP) (Pty) Ltd 119
    New Era Packaging Bops (Pty) Ltd 121
    Novus Packaging (Pty) Ltd 123
    Pandu Paper Products (Pty) Ltd 125
    S A Greetings (Pty) Ltd 126
    Sam\'s Tissue Products (Pty) Ltd 129
    Sappi Ltd 131
    Sylko (Pty) Ltd 136
    Tetra Pak South Africa (Pty) Ltd 138
    Transpaco Ltd 140
    Unity Paper Sales (Pty) Ltd 145
    Universal Paper and Plastics (Bophuthatswana) (Pty) Ltd 147
    Velvet Soft Toilet Tissue Manufacturers CC 149

    Report Coverage

    This report on the Manufacture of Paper and Related Products contains comprehensive information on the state and size of the sector, capacity, performance and corporate actions of major players and factors that influence the sector. There are profiles of 40 companies including the major producers Sappi and Mondi, paper and packaging producers such as Mpact and Neopak and local divisions of major international players such as Kimberly-Clark and Procter & Gamble.

    Introduction

    With manufacturing sales of paper and related products totalling over R82.7bn in 2019, South Africa’s carbon positive paper industry is a valuable contributor to the domestic economy. Although demand for newsprint and office paper remains on a downward trajectory, anti-plastic sentiment continues to gain momentum, stimulating demand for recyclable paper bags and other paper-based consumer packaging. Like paper-producing countries worldwide, South Africa has been affected by the outbreak of a virulent strain of the coronavirus. The pandemic, which has seen millions of people placed under lockdown, has precipitated massive stock market sell-offs, disrupted global supply chains and paralysed distribution networks, fueling fears of a global recession. As pandemic panic spreads and consumers stockpile emergency supplies, retailers say that demand for disposable surgical masks, toilet paper, tissues, sanitary wipes and other paper-based hygiene products is soaring.

    Strengths

    • Most raw materials are responsibly sourced and over 80% of commercial plantations are internationally certified by the Forest Stewardship Council.
    • Sappi and Mondi are major players in the global market, while Nampak and Mpact are major players in the African packaging market.
    • South Africa is ranked amongst the top 20 pulp producers in the world.
    • The industry is innovative and there is a high level of research and development.
    • The paper industry is carbon neutral.
    • The pulp and paper sector is one of the largest producers of renewable biomass fuel in South Africa.
    • The South African pulp and paper manufacturing industry is a highly developed, well-regulated sector, which provides over 150,000 jobs.

    Weaknesses

    • High transportation costs due to the country’s inadequate rail network.
    • The Sappi-Mondi duopoly dominates domestic pulp production.
    • The sector has a shortage of skilled personnel, particularly graduates with technical expertise.

    Opportunities

    • Commercialising alternative sources of nonwood fibre, notably bagasse, bamboo and sisal.
    • Conversion of recyclable waste paper into environmentally-friendly products.
    • Developing product innovations from woodfibre to replace plastic.
    • Exporting packaging and tissue products to markets in sub-Saharan Africa.
    • Production and supply of biodegradable cigarette filters.
    • Production and supply of disposable face masks, sanitary wipes and other paper-based hygiene products.
    • Production of lightweight consumer packaging.
    • The harnessing of biowaste and conversion of pulp mills into biorefineries.

    Threats

    • Cheap paper imports undermine locally produced goods.
    • Declining consumption of printing and writing paper, driven by the uptake of digitisation.
    • Disruption to global supply chains resulting from the coronavirus pandemic, trade wars and geopolitical tensions.
    • Domestic recessionary pressures, compounded by the possibility of a Moody’s ratings downgrade to junk status.
    • High level of exposure to variables such as exchange rate fluctuations, as well as the volatility of raw material prices.
    • Pulp producers are highly exposed to land restitution claims and possible land expropriation without compensation. Wildfires and droughts pose a significant threat to commercial plantations.
    • The contraction of global economic growth driven by the coronavirus pandemic and the oil price war.
    • The oversupply of waste paper, domestically and globally.

    Outlook

    With South Africa and the world in the grip of the coronavirus pandemic, the short-term growth prospects of the country’s pulp and paper manufacturing sector appear bleak. While demand for disposable face masks, sanitary wipes, toilet paper and other tissue products is anticipated to increase sharply in 2020, sales of graphic paper and packaging are expected to weaken significantly, as millions of people worldwide are placed under lockdown. Demand for newsprint, writing and printing paper is expected to remain on a downward trajectory. With textile factory shut-downs in many Chinese provinces and other parts of the world, analysts predict that dissolving wood pulp prices will remain subdued through 2020. However, the anti-plastic lobby is strengthening and analysts say that the medium to long-term outlook for packaging remains positive.

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    The Manufacture of Paper and Paper Products in South Africa 2020

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    The Manufacture of Paper and Paper Products in South Africa 2018-10-02

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    The Manufacture of Paper and Paper Products in South Africa 2016-08-19

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Value Chain 4
    2.2. Geographic Position 6
    3. SIZE OF THE INDUSTRY 8
    4. STATE OF THE INDUSTRY 10
    4.1. Local 10
    4.1.1. Trade 15
    4.1.2. Corporate Actions 18
    4.1.3. Regulations 19
    4.1.4. Enterprise Development and Socio-Economic Development 21
    4.2. Continental 23
    4.3. International 25
    5. INFLUENCING FACTORS 27
    5.1. Economic Environment 27
    5.2. Government Interventions 28
    5.3. Input Costs 29
    5.4. Cyclicality 29
    5.5. Technology, Research and Development (R&D) and Innovation 30
    5.6. Labour 32
    5.7. Environmental Concerns 34
    6. COMPETITION 36
    6.1. Barriers to Entry 37
    7. SWOT ANALYSIS 37
    8. OUTLOOK 39
    9. INDUSTRY ASSOCIATIONS 39
    10. REFERENCES 40
    10.1. Publications 40
    10.2. Websites 40
    APPENDIX 1 42
    Summary of Notable Manufacturers of Paper and Paper Products 42
    Summary of Notable Suppliers of Filter Paper 47
    COMPANY PROFILES 49
    AS ESSA FAMILY TRUST 49
    BIDVEST PAPERPLUS (PTY) LTD 51
    CASTLE PAPER ROLLS CC 54
    CONTINENTAL PAPER AND PACKAGING CC 56
    CONVERT-A-ROLL CC 58
    CORRUSEAL GROUP (PTY) LTD 60
    CRYSTAL PAPER GROUP (PTY) LTD 63
    CTP LTD 65
    DYNAMIC FIBRE MOULDING (PTY) LTD 70
    FILTRACELL (PTY) LTD 72
    GAYATRI PAPER MILLS (PTY) LTD 73
    GREEN HOME PRODUCTS (PTY) LTD 75
    GREENLINE DISTRIBUTORS (PTY) LTD 77
    HENMIN FILTERS (PTY) LTD 79
    HUHTAMAKI SOUTH AFRICA (PTY) LTD 80
    INTERNATIONAL TUBE TECHNOLOGY (PTY) LTD 83
    KIMBERLY-CLARK OF SOUTH AFRICA (PTY) LTD 85
    MAGIC TISSUES (PTY) LTD 87
    MAIN STREET 1310 (PTY) LTD 89
    MOGWELE WASTE (PTY) LTD 91
    MONDI SOUTH AFRICA (PTY) LTD 93
    MPACT LTD 96
    NEMUNO BANGA AFRICA (PTY) LTD 101
    NEOPAK (PTY) LTD 102
    NEW ERA LABELS (BOP) (PTY) LTD 104
    NEW ERA PACKAGING BOPS (PTY) LTD 106
    NOVUS PACKAGING (PTY) LTD 108
    PANDU PAPER PRODUCTS (PTY) LTD 110
    PROCTER AND GAMBLE MANUFACTURING SA (PTY) LTD 112
    S A GREETINGS (PTY) LTD 114
    SAM\'S TISSUE PRODUCTS (PTY) LTD 117
    SAPPI LTD 119
    SOUTH AFRICAN PAPER MILLS (PTY) LTD 125
    SYLKO (PTY) LTD 126
    TETRA PAK SOUTH AFRICA (PTY) LTD 128
    TRANSPACO LTD 130
    UNITY PAPER SALES (PTY) LTD 135
    UNIVERSAL PAPER AND PLASTICS (BOPHUTHATSWANA) (PTY) LTD 137
    VELVET SOFT TOILET TISSUE MANUFACTURERS CC 139
    WAXPAK (PTY) LTD 141

    Introduction

    Disruption in the South African pulp and paper market continues to exact a heavy toll on the country’s producers of paper and related products. Total production of paper and paper-based products declined to 2.18 million tons in 2017, down from 2.35 million tons during the prior year. Similarly, total consumption contracted, falling from 2.38 million tons in 2016 to 2.26 million tons in 2017. Digitisation has prompted numerous local pulp and paper manufacturers to restructure and while certain companies have evolved and diversified, others have elected to streamline and consolidate. Various role players report that green shoots are evident in the sector. However, although many repackaged manufacturers have emerged stronger, others continue to grapple with prevailing market challenges, which are compounded by the prolonged economic slowdown and policy uncertainty gripping South Africa.

    Strengths

    • More than 80% of South Africa’s commercial plantations are internationally certified by the Forest Stewardship Council.
    • Sappi and Mondi are major players in the global market: Sappi is the largest manufacturer of DWP in the world, while Mondi is the global leader in industrial bag manufacturing.
    • South Africa is ranked amongst the top 20 pulp producers in the world.
    • South Africa’s pulp and paper sector is classified as being carbon positive
    • The industry is highly innovative and R&D is of an excellent standard.
    • The paper manufacturing sector one of the largest producers of renewable biomass fuel in South Africa.
    • The South African pulp and paper manufacturing industry is a highly developed, well-regulated sector, which provides around 150,000 jobs.

    Weaknesses

    • Development of forestry land has been inadequate, leading to fibre supply constraints.
    • Local pulp production is dominated by two major players.
    • The industry is hampered by high transportation costs and an inadequate rail network.
    • The sector continues to experience a shortage of skilled personnel, particularly graduates with technical expertise.

    Opportunities

    •  The supply of lightweight, eco-friendly consumer packaging.
    • Developing product innovations from woodfibre to replace plastic.
    • Exporting packaging and tissue paper products to African and Asian markets.
    • Further increasing the recovery of recyclable paper to meet local and global demand.
    • The development of commercial plantations and pulp mills in Mozambique.
    • The development of sustainable and renewable energy technologies.
    • The harnessing of biowaste and conversion of pulp mills into biorefineries.
    • The manufacture of nanocellulose.

    Threats

    •  Fibre shortages.
    • An increase in the off-shoring of printing.
    • Commercial plantation owners and pulp producers are highly exposed to land restitution claims and possible land expropriation without compensation, as well as potential losses resulting from wildfires and droughts.
    • Declining consumption of printing and writing paper, driven by the uptake of digitisation.
    • Domestic political and economic instability, as well as global geopolitical and macroeconomic pressures.
    • Flooding the local market with cheap imports undermines the competitiveness of local manufacturers.
    • High level of exposure to variables such as foreign exchange rate fluctuations, as well as the volatility of raw material prices.
    • Ongoing calls for a paperless society, which are motivated by misperceptions relating to the industry’s environmental impact.

    Outlook

    With average annual paper and paper-based packaging consumption in South Africa sliding from around 50kg per person in 2011 to almost 40kg per capita in 2017, analysts say that the outlook for newsprint, writing and printing paper grades appears bleak. Electronic substitution is predicted to further erode demand for paper and related products as the Fourth Industrial Revolution gains traction in South Africa. However, as noted by several role players, there are numerous green shoots in the sector. \r\n\r\nAs one of South Africa’s largest producers of renewable biomass fuel and woodfibre, the pulp and paper manufacturing sector offers various opportunities for growth. Furthermore, the paper industry’s recycling target was achieved three years ahead of schedule and the sector is also one of the few industries in the world that is deemed to be carbon positive. The steady uptake of ethical consumerism in South Africa is expected to boost demand for paper bags and other paper-or bio-based packaging that has good environmental credentials, while the growth of online shopping is predicted to drive demand for lightweight packaging. Despite the potential threat of land expropriation without compensation, South Africa’s pulp and paper titans, Sappi and Mondi, appear to be on solid ground, with their respective restructuring efforts yielding positive results.

    The Manufacture of Paper and Paper Products in South Africa
    The Manufacture of Paper and Paper Products in South Africa 2018

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    The Manufacture of Paper and Paper Products in South Africa 2020-03-31

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    The Manufacture of Paper and Paper Products in South Africa 2016-08-19

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    The Manufacture of Paper and Paper Products in South Africa 2015-04-06

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Supply Chain 3
    2.2. Geographic Position 4
    3. SIZE OF THE INDUSTRY 6
    4. STATE OF THE INDUSTRY 9
    4.1. Local 9
    4.1.1. Corporate Actions 16
    4.1.2. Regulations 17
    4.1.3. Enterprise Development and Social Economic Development 19
    4.2. Continental 22
    4.3. International 23
    5. INFLUENCING FACTORS 25
    5.1. Government Initiatives 25
    5.2. Economic Environment 26
    5.3. Input Costs 27
    5.4. Cyclicality 27
    5.5. Off-shoring of Printing 28
    5.6. Technology, Research and Development (R&D) and Innovation 28
    5.7. Labour 31
    5.8. Environmental Concerns 33
    6. COMPETITION 35
    6.1. Barriers to Entry 36
    7. SWOT ANALYSIS 37
    8. OUTLOOK 38
    9. INDUSTRY ASSOCIATIONS 39
    10. REFERENCES 39
    10.1. Publications 39
    10.2. Websites 40
    APPENDIX 1 42
    Summary of Major Players 42
    COMPANY PROFILES 47
    AS ESSA FAMILY TRUST 47
    BIDVEST PAPERPLUS (PTY) LTD 49
    CASTLE PAPER ROLLS CC 52
    CONVERT-A-ROLL CC 54
    CORRUSEAL GROUP (PTY) LTD 56
    CRYSTAL PAPER GROUP (PTY) LTD 59
    CTP LTD 61
    DYNAMIC FIBRE MOULDING (PTY) LTD 65
    GAYATRI PAPER MILLS (PTY) LTD 67
    GREEN TISSUE (PTY) LTD 69
    HUHTAMAKI SOUTH AFRICA (PTY) LTD 71
    IMMEL PAPER (PTY) LTD 74
    INTERNATIONAL TUBE TECHNOLOGY (PTY) LTD 76
    KIMBERLY-CLARK OF SOUTH AFRICA (PTY) LTD 78
    MAGIC TISSUES (PTY) LTD 80
    MAIN STREET 1310 (PTY) LTD 82
    MOGWELE WASTE (PTY) LTD 84
    MONDI LTD 86
    MPACT LTD 89
    NEOPAK (PTY) LTD 94
    NEW ERA LABELS (BOP) (PTY) LTD 96
    NEW ERA PACKAGING BOPS (PTY) LTD 98
    NOVUS PACKAGING (PTY) LTD 100
    PANDU PAPER PRODUCTS (PTY) LTD 102
    PROCTER AND GAMBLE MANUFACTURING SA (PTY) LTD 104
    RECLAMATION GROUP (PTY) LTD (THE) 106
    S A GREETINGS (PTY) LTD 109
    SAM\'S TISSUE PRODUCTS (PTY) LTD 112
    SAPPI LTD 114
    SOUTH AFRICAN PAPER MILLS (PTY) LTD 119
    SYLKO (PTY) LTD 120
    TETRA PAK SOUTH AFRICA (PTY) LTD 123
    TRANSPACO LTD 126
    UNITY PAPER SALES (PTY) LTD 132
    UNIVERSAL PAPER AND PLASTICS (BOPHUTHATSWANA) (PTY) LTD 134
    VELVET SOFT TOILET TISSUE MANUFACTURERS CC 136
    WAXPAK (PTY) LTD 138

    Report Coverage

    This report investigates the manufacture of pulp, paper and related products, including tissue and packaging grades. While the report focuses on the South African market, recent developments in the industry, as well as factors influencing the success of the sector, it also examines the state of both the African and global pulp and paper markets. In addition, this report profiles a wide spectrum of notable players in the industry, including Neopak and the Twinsaver Group, which were formerly the Corrugate and Tissue divisions of the South African packaging giant, Nampak.

    Introduction

    This report focuses on the manufacture of paper and related products in South Africa. The industry, which has been listed as a lead sector in the Department of Trade and Industry’s Industrial Policy Action Plan (IPAP) 2, generated revenue of approximately R28bn in 2015. Notwithstanding the negative Balance of Trade rand value of the paper and board segments, the sector, supported by pulp exports, made a direct contribution of almost R5bn to South Africa’s Balance of Trade. Operating conditions remain challenging and while some stakeholders warn that the industry is not “out of the woods”, there appear to be positive indications that restructuring strategies undertaken by some of the leading players are paying dividends.

    Strengths

    • More than 80% of South Africa’s commercial plantations are internationally certified by the Forest Stewardship Council.
    • Sappi and the Mondi Group are major players in the global market, with the former being the largest manufacturer of DWP in the world.
    • South Africa is ranked amongst the top 20 pulp producers in the world.
    • South Africa’s pulp and paper sector is classified as being carbon positive and with around 40% of local pulp and paper mills utilising biomass-based renewable energy, the industry is an important contributor to sustainable power generation.
    • The South African pulp and paper manufacturing industry is a highly developed, well regulated sector, which provides around 188,000 direct jobs.

    Weaknesses

    • A high number of employees working in the industry have been diagnosed with HIV/AIDS.
    • Development of forestry land has been inadequate, leading to fibre supply constraints.
    • Local pulp production is dominated by two major players.
    • The industry is hampered by high transportation costs and an inadequate rail network.
    • The sector continues to experience a shortage of skilled personnel, particularly graduates with technical expertise.

    Opportunities

    •  The supply of lightweight, ‘eco-friendly’ consumer packaging.
    • Growth in demand for packaging, as well as tissue paper products in African and Asian markets, driven by population growth, urbanisation and rising living standards.
    • Increasing the recovery of recyclable paper to meet local and global demand.
    • The development of commercial plantations and pulp mills in Mozambique.
    • The development of sustainable and renewable energy technologies.
    • The expansion of pulp production to meet the local shortfall.
    • The manufacture of nanocellulose.

    Threats

    •  The declining supply of fibre.
    • An increase in the off-shoring of printing.
    • Commercial plantation owners and pulp producers are highly exposed to land restitution claims, as well as potential losses resulting from wildfires and droughts.
    • Declining consumption of printing paper, driven by the uptake of digitisation.
    • Domestic political and economic instability, as well as global geopolitical and macroeconomic pressures.
    • Flooding the local market with cheap imports undermines the competitiveness of local manufacturers.
    • High level of exposure to variables such as foreign exchange rate fluctuations, as well as the volatility of raw material prices.
    • Ongoing calls for a ‘paperless’ society, which are motivated by misperceptions relating to the industry’s environmental impact.

    Outlook

    South Africa’s Pulp and Paper Manufacturing sector has undergone extensive restructuring in recent years, with some of the sector’s main players moving away from their core business of pulp and paper manufacturing and expanding into non-traditional markets. While some “repackaged” manufacturers have emerged stronger, many continue to grapple with the challenges presented by an increasingly digitised world. \r\n\r\nGiven global shortfalls, stakeholders predict that demand for South African pulp will remain robust. However, the sustainability of South Africa’s fibre supply remains a significant concern. Some commentators say that if the South African government does not make land available for the development of new plantations, pulp producers may have to explore opportunities in neighbouring Mozambique, where suitable land is plentiful. The future prospects of the paper manufacturing industry are expected to remain mixed. While the DWP segment and lightweight consumer packaging grades are predicted to remain relatively robust, demand for containerboard, as well as printing and writing papers, is expected to remain subdued. Some role players in the industry predict that further “reinvention” is likely to take place, as players try to adapt to rapidly changing market conditions.

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    The Manufacture of Paper and Paper Products in South Africa
    The Manufacture of Paper and Paper Products in South Africa 2016

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    Table of Contents

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    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Supply Chain 3
    2.2. Geographic Position 4
    3. SIZE OF THE INDUSTRY 6
    4. STATE OF THE INDUSTRY 15
    4.1. Local 15
    4.1.1. Corporate Actions 21
    4.1.2. Regulations 23
    4.1.3. Enterprise Development and Social Economic Development 24
    4.2. Continental 26
    4.3. International 28
    5. INFLUENCING FACTORS 30
    5.1. Government Initiatives 30
    5.2. Economic Environment 31
    5.3. Rising Operating Costs 32
    5.4. Cyclicality 33
    5.5. Off-shoring of Printing 33
    5.6. Technology, Research and Development (R&D) and Innovation 34
    5.7. Labour 36
    5.8. Environmental Concerns 38
    6. COMPETITION 41
    6.1. Barriers to Entry 41
    7. SWOT ANALYSIS 42
    8. OUTLOOK 43
    9. INDUSTRY ASSOCIATIONS 44
    10. REFERENCES 45
    10.1. Publications 45
    10.2. Websites 45
    COMPANY PROFILES 47
    AS Essa Family Trust 47
    Bidvest Paperplus (Pty) Ltd 49
    Castle Paper Rolls CC 52
    Consolidated Aone Trade and Invest 11 (Pty) Ltd 54
    Convert-A-Roll CC 56
    Corruseal Group (Pty) Ltd 57
    Crystal Paper Group (Pty) Ltd 60
    CTP Ltd 62
    Dynamic Fibre Moulding (Pty) Ltd 66
    Gayatri Paper Mills (Pty) Ltd 68
    Green Tissue (Pty) Ltd 70
    Huhtamaki South Africa (Pty) Ltd 72
    International Tube Technology (Pty) Ltd 75
    Kimberly-Clark of South Africa (Pty) Ltd 77
    Lothlorien (Pty) Ltd 79
    Magic Tissues (Pty) Ltd 81
    Main Street 1310 (Pty) Ltd 83
    Mogwele Waste (Pty) Ltd 85
    Mondi Ltd 87
    Mpact Ltd 90
    Neopak (Pty) Ltd 95
    Neopak Recycling (Pty) Ltd 98
    New Era Labels (BOP) (Pty) Ltd 99
    New Era Packaging Bops (Pty) Ltd 101
    Paarl Tissue (Pty) Ltd 103
    Pandu Paper Products (Pty) Ltd 105
    Procter and Gamble Manufacturing SA (Pty) Ltd 107
    Reclamation Group (Pty) Ltd (The) 109
    Remade Holdings (Pty) Ltd 111
    SA Greetings (Pty) Ltd 113
    Sam\'s Tissue Products (Pty) Ltd 115
    Sappi Ltd 117
    South African Paper Mills (Pty) Ltd 122
    Swift Box Manufacturers (Pty) Ltd 124
    Sylko (Pty) Ltd 126
    Tetra Pak South Africa (Pty) Ltd 129
    Transpaco Ltd 131
    Unity Paper Sales (Pty) Ltd 137
    Universal Paper and Plastics (Bophuthatswana) (Pty) Ltd 139
    Velvet Soft Toilet Tissue Manufacturers CC 141
    Waxpak (Pty) Ltd 143

    Introduction

    This report focuses on South Africa’s pulp and paper manufacturing industry, which has been listed as a lead sector in the Department of Trade and Industry’s Industrial Policy Action Plan (IPAP) 2. In 2013, the value of paper production, which totalled 2,318,000 tonnes, was R17.71bn. 2,016,000 tonnes of pulp was produced and combined pulp and paper exports contributed R10.36bn to the South African economy. The challenging operating environment of the past five years has resulted in the conversion or closure of numerous manufacturing facilities, both locally and abroad. Some of the sector’s major players have repackaged themselves, moving away from the core business of pulp and paper manufacturing and expanding into non-traditional markets such as the textile, automotive and pharmaceutical industries.

    Strengths

    • More than 80% of South Africa’s commercial plantations comply with the Forest Stewardship Council’s environmental management standards and the country’s pulp and paper sector is classified as being carbon positive.
    • South Africa’s paper recycling industry is well developed.
    • The Mondi Group and Sappi Ltd are major players in the global market, with the latter being the largest manufacturer of DWP in the world.
    • The paper value chain generates a substantial number of jobs.
    • The South African pulp and paper manufacturing sector is a robust, well regulated and highly developed industry, which ranks amongst the top 20 pulp producers in the world.

    Weaknesses

    • Development of forestry land has been inadequate, leading to fibre supply constraints.
    • In South Africa, pulp production is dominated by two major players.
    • The industry is hampered by high transportation costs and an inadequate rail network.
    • The sector continues to experience a shortage of skilled personnel, particularly graduates with technical expertise.

    Opportunities

    • Growth in demand for packaging, as well as tissue paper products in African and Asian markets, driven by population growth, urbanisation and rising living standards.
    • Increasing the recovery of recyclable paper to meet local and global demand.
    • The development of sustainable and renewable energy technologies.
    • The expansion of pulp production to meet the local shortfall, with low-cost wood considered to be a potential growth driver.
    • The manufacture of Nanocellulose.
    • The supply of lightweight, ‘eco-friendly’ consumer packaging.

    Threats

    •  Increasing digitisation, leading to the decline of printed publications.
    • A decreasing supply of fibre and the volatility of raw material prices.
    • Calls for a ‘paperless’ society and public misperception of the industry’s environmental impact.
    • Cheap imports, which threaten the competitiveness of locally produced products.
    • Destruction to plantations caused by wildfires and droughts.
    • Land claims.
    • The imposition of additional environmental regulations and the introduction of a Carbon Tax.

    Outlook

    Although the South African pulp and paper market is fundamentally stable, stakeholders believe that growth in this sector will remain relatively subdued in the short-term. While rationalisation and streamlining initiatives have yielded positive results, some analysts predict that the sector will see more restructuring, as players continue to redefine their areas of operation. The recent sale of Nampak’s paper businesses to fund expansion into Africa is expected to significantly alter the dynamics of the local packaging and tissue segments. \r\n\r\nGoing forward, the sustainability of South Africa’s fibre supply remains a significant concern. Stakeholders have reiterated that the South African government needs to make suitable land available for new timber plantations. While demand for pulp is expected to remain high, analysts forecast that the future prospects of the paper manufacturing industry are likely to be mixed. As migration to digital platforms increases, demand for printing and writing papers is predicted to continue on a downward trajectory. Many analysts believe that the uptake of lightweight consumer packaging with an enhanced environmental footprint will ultimately lead to the demise of similar products that are not eco-friendly. The DWP segment is expected to remain robust. However, pricing pressures in this segment are predicted to persist until the end of 2015.

    The Manufacture of Paper and Paper Products in South Africa
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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Supply Chain 3
    2.2. Geographic Position 4
    3. SIZE OF THE INDUSTRY 6
    4. STATE OF THE INDUSTRY 11
    4.1. Local 11
    4.1.1. Corporate Actions 17
    4.1.2. Regulations 19
    4.1.3. Enterprise Development and Socio-Economic Development 20
    4.2. Continental 23
    4.3. International 24
    5. INFLUENCING FACTORS 26
    5.1. Government Intervention 26
    5.2. Economic Environment 27
    5.3. Rising Input Costs 27
    5.4. Cyclicality 28
    5.5. Off-Shoring of Printing 28
    5.6. Information Technology and Technology 29
    5.7. Labour Resources 29
    5.8. Environmental Concerns 31
    6. COMPETITION 32
    6.1. Barriers to Entry 33
    6.2. Research and Development (R&D) and Innovation 33
    7. SWOT ANALYSIS 35
    8. OUTLOOK 37
    9. INDUSTRY ASSOCIATIONS 37
    10. REFERENCES 38
    10.1. Publications 38
    10.2. Websites 38
    ORGANOGRAM 40
    COMPANY PROFILES 43
    AS ESSA FAMILY TRUST 43
    BIDVEST PAPERPLUS (PTY) LTD 45
    CASTLE PAPER ROLLS CC 47
    CONSOLIDATED AONE TRADE AND INVEST 11 (PTY) LTD 49
    CONVERT-A-ROLL CC 51
    CORRUSEAL GROUP (PTY) LTD 52
    CRYSTAL PAPER GROUP (PTY) LTD 55
    CTP LTD 57
    DYNAMIC FIBRE MOULDING (PTY) LTD 60
    GAYATRI PAPER MILLS (PTY) LTD 62
    GREEN TISSUE (PTY) LTD 64
    HUHTAMAKI SOUTH AFRICA (PTY) LTD 66
    INTERNATIONAL TUBE TECHNOLOGY (PTY) LTD 69
    KIMBERLY-CLARK OF SOUTH AFRICA (PTY) LTD 71
    LOTHLORIEN (PTY) LTD 73
    MAGIC TISSUES (PTY) LTD 75
    MOGWELE WASTE (PTY) LTD 77
    MONDI LTD 79
    MPACT LTD 82
    NAMPAK LTD 87
    NEW ERA LABELS (BOP) (PTY) LTD 91
    NEW ERA PACKAGING BOPS (PTY) LTD 93
    NEW RECLAMATION GROUP (PTY) LTD (THE) 95
    PAARL TISSUE (PTY) LTD 97
    PANDU PAPER PRODUCTS (PTY) LTD 99
    PROCTER AND GAMBLE MANUFACTURING SA (PTY) LTD 101
    REMADE HOLDINGS (PTY) LTD 103
    SA GREETINGS (PTY) LTD 105
    SAM\'S TISSUE PRODUCTS (PTY) LTD 107
    SAPPI LTD 109
    SOUTH AFRICAN PAPER MILLS (PTY) LTD 114
    SWIFT BOX MANUFACTURERS CC 115
    SYLKO (PTY) LTD 117
    TETRA PAK SOUTH AFRICA (PTY) LTD 120
    TRANSPACO LTD 122
    UNITY PAPER SALES (PTY) LTD 127
    UNIVERSAL PAPER & PLASTICS (BOPHUTHATSWANA) (PTY) LTD 129
    VELVET SOFT TOILET TISSUE MANUFACTURERS CC 131
    WAXPAK (PTY) LTD 133

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