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2008 Economic Woes Felt in Austria’s Paper Industry

Austropapier
May 6, 2009

Austropapier publishes its 2008 Annual Report

According to Austropapier , Austria’s trade association for the paper industry, 2008 “had two faces.” Production rose in the first six months and it was possible to raise paper prices slightly to make up for soaring costs for raw materials. With the onset of the global recession some raw material prices fell, but not to their previous levels. The banking crisis was reflected in the higher cost of financing. Demand for paper products plummeted, in some areas more than 50%. Quite a few companies with locations in Austria suffered losses and M-real is closing its Hallein plant which was producing 300,000 tons of fine paper. Emissions trading was also an ongoing problem. All in all, paper production dropped 0.9% in 2008 to 5.2 million tons.

2009 does not look promising for Austria’s paper industry. Much depends on whether or not the recession ends this year. Low demand and the shutdown of the paper plant in Hallein will likely result in a drop in paper production for a third year in a row. In order to turn the industry around, prices for raw materials must return to a competitive level and investments in domestic sites must be increased.

Although challenges lie ahead, particularly stiff competition from China, India and Brazil as well as European energy policies, Austropapier sees opportunities to be capitalized on if “the industry can reorient itself and take better advantage of its green potential.”

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