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.
The Manufacture of Paper and Related Products
South Africa’s R28bn Pulp and Paper Manufacturing industry has undergone extensive restructuring in recent years, with some of the sector’s main players moving away from their core business and diversifying into non-traditional markets. Sappi has established itself as the world’s leading producer of Specialised Cellulose, which is used in the production of various consumer products across a diverse range of industries. The South African company, in partnership with Edinburgh Napier University, has also developed a new low-cost process to manufacture the “wonder material”, Nanocellulose, which can be used in a multitude of applications, including the manufacture of vehicles with a better environmental footprint, as well as energy storage. Operating conditions in the sector 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 are paying dividends.
Opportunities and Challenges
Digital-driven disruption continues to have a negative impact on the Printing and Writing Papers segment. However, demand for certain grades of packaging and pulp, including dissolving wood pulp (DWP), remains robust. Although South Africa is ranked as one the world’s top 20 pulp producers, relatively little has been done to develop new commercial plantations over the past decade. In view of this, the sustainability of the country’s fibre supply is in jeopardy. Pulp producers are also highly exposed to potential losses resulting from droughts and wildfires, as well as land restitution claims. Some stakeholders have identified pulp production opportunities in neighbouring Mozambique, where suitable land is plentiful. Recycled paper is also a valuable source of fibre. While the recovery rate of recyclable commercial and industrial waste paper has improved, household recycling in South Africa remains extremely low.