Paper Core Demand to Decline in 2020 Due to Covid-19, Long-term Outlook Remains Positive

Apr 03,2020

In the wake of digitization, many believed that the paper and forest-products are disappearing, while these products are filling the gap left by reduction in the usage of plastic in packaging industry and have significant prospects for new growth. Paper bags, papers tapes, paper band, and paperboard jars have key roles to play in the future of packaging, and paper core is no different. Moreover, companies operating in paper packaging including paper core markets are building up significant muscles for structural actions and further growth. However, in the current scenario, coronavirus is taking its toll on these markets. The potential supply chain impact of this pandemic is further immense yet unpredictable.

Today, traditional assumptions and forecast statistics of the paper core market are rendered irrelevant. Manufacturers are thus constantly assessing their capabilities and capacities to meet changing demand in the time of coronavirus outbreak and beyond. Additionally, big companies across the globe are warning their investors that their revenue in 2020 will be lower than anticipated amid Covid-19 outbreak, which indicates a negative impact on the product packaging demand. Furthermore, most of the companies have supply chains in China which are largely affected. As the virus moves across major countries, it is likely businesses will have similar impact. However, a glimmer of hope is seen as China returns to normalcy and reopens factories while keeping the virus in check.

The global paper core market is expected to grow in 2020 and beyond, albeit at a slower pace than before, mainly assisted by the steady growth of the e-commerce industry, widening scope of wrapping applications, and developments in digital printing technologies. A downturn in demand in China and contraction of the global economy amid Covid-19 pandemic are likely to lead to realignment of manufacturers’ strategies. While these manufacturers aren’t in the state of emergency yet, they are moving their supply chains out of China and plans to expand in the nations are coming to standstill.

Global Paper Core Market - What Lies Ahead of the Curve?

Global sales of paper core will be propelled in bulk by demographic shifts and new consumer trends such as high demand for convenience and sustainability.  A sudden spike in demand for fast-moving consumer goods (FMCG) due to panic buying during the outbreak and widespread use of flexible packaging paper and paper core in retail and FMCG packaging are expected to boost the market growth. The trend of customization and subsequent rise in demand for multi-functionary, customized paper core for textiles and beverage packaging will also remain instrumental to the market growth.

Amidst mounting concerns over white pollution, paper core is gaining increasing popularity in the packaging industry, as paper recycling and sustainability become critical issues across the value chain system. Composed of fibrous materials, paper cores are easy to recycle and change into new generations of products, thereby boosting the popularity. The impact of new technologies is also noticeable in the paper core market, as manufacturers are prioritizing the integration of their products with advanced features such as radio-frequency identification (RFID) tags to improve supply chain management.

Post supply chain normalization, paper cores are set to bring new opportunities for innovation in traditional packaging and value-creating disruption in the intersection of e-commerce expansion, sustainability requirements, and technology integration. It is also pertinent to note that supply-chain challenges due to coronavirus outbreak are likely to trigger an accelerated development of applications and strategies that are less dependent on procurement of raw materials from and supply chain in affected countries, especially China. While it is too early to accurately predict the impact of coronavirus on the global paper core market, stakeholders are likely to dedicate the needed efforts to responses focused on long-term dimensions of the market.

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