Defining the Market for Pulp, Paper and Board in the Middle East
The Middle East is frequently referenced as one of the worlds’ fastest growing markets for pulp, paper and board yet little research exists that quantifies the size of the market and which evaluates its development. Hawkins Wright’s latest multi-client report - Defining the Market for Pulp, Paper and Board in the Middle East addresses this issue by defining production and consumption of pulp, paper and board in the region since 2002. Forecasts have been prepared until 2020. For the purposes of this report, the Middle East includes Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, UAE and Yemen.
With pulp, paper and board demand contracting in many of the mature economies of the West, suppliers are increasingly looking to emerging markets for pockets of growth. One such market is the Middle East, where strong economic growth and rising living standards have driven a surge in paper and board demand during the past 10 years. Paper and board consumption in the region is estimated at 13 million t last year compared with just 8.5 million t in 2002. Consumption growth has averaged has averaged almost 5% pa during this period, equal to 0.5 million t/year.
Although consumption growth has been booming, production growth has been relatively anaemic, expanding by just one million tonnes during the same period. As such, the regions burgeoning demand growth has been satisfied mostly through imports, which totalled 7 million t last year. Aside from tissue paper, which is mostly supplied domestically, every grade of paper and board has experienced strong import growth, especially uncoated woodfree papers.
Fibre demand growth has averaged 2.8% pa since 2002. Fibre demand has outpaced paper and board production as the quality of waste paper consumed is generally poor; the ratio of total fibre consumed per tonne of paper and board produced has evolved from 1.08 in 2002 to 1.15 today. Poor collection rates and quality issues continue to plague the recovered fibre sector.
Virgin fibre demand has been the main beneficiary of the under-developed recovered fibre markets; imports of virgin fibre market pulp have soared by an average of 8% pa since 2002 and the market is estimated at 1.6 million t last year. Domestic pulp production is estimated at just 0.7 million t.
Looking forward, the long term prospects for the market are clearly favourable. Taken together, the population of the Middle East is 368 million, making the region more populous than North America (350 million). Although the Arab Spring has recently hampered economic growth in the Middle East, the long term economic prospects are encouraging as political and social reform is pushed through. With many countries trying to diversify their oil-based economies and free trade zones encouraging growth, living standards appear set to continue to rise meaning the region is likely to remain one of the one of the fastest growth markets for pulp and paper consumption in the world for many years to come.
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