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Paper Recycling Confex MEA highlights the emerging trends in recovered fibre industry

The Paper Recycling Confex MEA, organised by Waste & Recycling MEA magazine, brought together over 200 paper mill owners, recyclers, traders and indentors.

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May 15 2023
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The conference was opened with a Keynote Address by Hrishikesh Vora, CEO, Adler, where he addressed industry trends, challenges, and the future of paper recycling. The magazine recognised Atul Kaul, Director Pulp & Paper, WARAQ with an award for his contributions and commitment to the pulp and paper industry in the KSA.

The day-long conference included panels discussions and presentation on various topics related to the pulp and paper industry.

The panel discussions were highly engaging, with the panellists and audiences reflecting on various aspects of the paper recycling industry. Some of the key issues addressed were as follows:

  • Challenges stemming from environmental, waste shipment legislations and import/export duties of various countries and regions.
  • The need to develop a common language for standards and specifications.
  • Collection, recycling rate and the demand for recovered fibre in MENA and Asia.
  • Impact of price fluctuations and challenges in acquiring quality feedstock.
  • The need for innovation and technological advancements to meet new demands.
  • Emerging trends and the changing landscape of recovered fibre.

…and more

The day also witnessed three presentations on Global Recovered Paper Supply/Demand Market Trends & Forecasts; High Grades – Factors driving the next normal; Choosing the right baler to improve efficiencies and costeffectiveness and much more.

International Trade: Impact of regulations on global market dynamics

The conference began with a panel discussion on ‘International trade: Impact of regulations on global market dynamics’. Panelists discussed the challenges stemming from environmental policies, waste shipment legislations and import/export duties imposed by various countries. While urging the EU to review its shipment rules, they also batted for developing common language for standards and specifications. The discussion was moderated by Devang Vora, founder, Adler.

Talking about the recovery after the COVID-19 pandemic, Pieter Vermeij, Commercial Director Global, Waste Paper Trade, pointed out the market continues to remain volatile post pandemic. He attributed the economic situation in China in 2022 to the uncertainty business for South Asian mills.

Joep van den Broeke, General Manager, Ciparo, said though the prices have come down after the pandemic-imposed lockdown, the market remains uncertain. Vikas Mahajan, Commercial Director, Mahajan Recycle Resources, pointed out earlier there was a demand for recovered pulp. But in 2022, China has shifted its demand from recovered pulp to virgin fiber.

While commenting about the impact of the EU Waste Regulations, Broeke said the EU is laying stress on the eco-friendly measures but the enforcement is unclear. “Each of the 27 countries has its own way of interpreting the regulations.” This has affected trade in recovered fibre, he added.

“The domestic capacity is increasing. So people want to keep the material in the country itself or in the continent itself. As the domestic demand grows, the export is decreasing,” said Vermeij.

Ercan Yurekli, Board Chairman, Yurekli Kagit, noted, “Several years ago, Europe’s focus was on just collection. After the new regulations and new rules in China, they embraced recycling. The continent invested in that and now they want to create a local market. It now wants to utilise the waste collected from industry or households for its own industry. I believe our industry should not be marred by such strict laws.”

Mahajan said the dynamics of the market is dependent on various factors including freight cost and demand & supply, besides the regulations. “The packaging waste, which was going from residential waste, is coming back into commercial use. Last year, due to a signature barrier between India and the European continent, a lot of waste paper got accumulated within Europe because India could not import.” Taking a positive note, Vermeij noted, “The EU will take four to five years to make the hard cut. I am sure we will find a way to ensure we keep the export going. We will have a balance only when we have the possibility to export the recovered paper.”

The panelists drew the audience’s attention towards the need for free trade. “Countries are increasingly trying to keep scrap materials within their borders. This is not good for a healthy market and healthy competition,” said Vermeij. The countries are increasingly shifting their approach from globalisation to localisation. Unless the demand and supply match, this is not a practical approach, explained Mahajan. “Receiving mills outside the EU can still be audited in order to receive recovered fiber from the EU,” said Broeke. “There is no clear enforcement and rules are still vague. There is a lack of knowledge with shipping line rules,” he added.

Mahajan said the rules were created to not let plastic waste get dumped in overseas countries. The new rules intend to support a circular economy within the country. But not all countries are alike, he pointed, adding all the countries should work together to achieve circularity.

How has China’s restrictions on scrap paper affected recovered fiber flows to Asia?

Broeke said when China’s Operation Green Fence came into effect, the paper industry was concerned over the dynamics of the trade but the market found its own way. However, we cannot predict the future of the recovered fiber in the form of pulp. “I think it’s too early to comment.” Peter commented that recycled pulp is too expensive now.

Mahajan was of the opinion: China has shifted its focus from recycled fiber to virgin and semi virgin fiber. With the import duty now waved off, a number of Chinese mills are looking to wood chips and paper coming at a lower cost from other countries such as Malaysia, Vietnam, and India. He added, “The recovered pulp market would be shortlived. We should start concentrating more on the prime finished paper rather than the recovered bulk paper.”

Yurekli opined that instead of buying waste from these countries, China bought companies in Europe, in Turkey and other places, and producing good material by buying recovered fibre. Vora spoke about the constant changes in pricing and how it is affecting the paper market. Yurekli said the pricing models vary with countries and so do the standardisations. There should be uniformity in standardisation across the globe, he recommended.

The panelists noted the circular economy initiatives may bring about positive changes for the recovered fibre market. Yurekli said the demand for recovered paper will grow, while Vermeij opined that the quality of the feedstock is set to improve.

Is the paper industry ready to meet the new demands? PRC panel discusses

The panel discussion on ‘The paper value chain within Asia and beyond – Meeting the new demands’ at the Paper Recycling Confex reflected on the collection, recycling rate and the demand for recovered fibre in the Middle East & Africa and Asia.

The session was moderated by Deep Saraf, Partner, Nice Imports. Ritesh Gupta, Sales & Accounts Manager, Ittihad Paper Mill LLC, said in the UAE, the collection of used cartons from retailers and supermarkets is robust but residential collection is not significant enough to make an impact in the value chain. “There are mandates in place, which helps increase the recyclability of paper. But sorting at source is almost absent.” Up to about three to 4% of my packaging needs is coming from the recycle grade. He also pointed out that the lack of supply chain is preventing acceleration towards other applications of paper.”

The panelists unanimously agreed that post-COVID, the demand for recovered fibre is growing, but the fluctuation in pricing is a hassle.

Speaking about the African trend, Nadim Mawji, CEO, Kamongo Waste Paper Kenya, noted the recycling rate in Africa is just about 24 per cent, with Kenya’s rate being 30 per cent, adding, “It is nowhere near Asia, where the recovery rate is 52 per cent. This shows inefficiency in collection, but also the multi-stage uses of paper. There is a huge potential of the untapped market.” He spoke about the plastic ban in Kenya and how it has given a boost to the paper products and therefore the paper industry. “The EPR initiatives that the government currently looks at will enhance the recovery and quality of recovered paper.” He said this will encourage the setting up of MRFs, supply will grow and the quality will improve. “70% of what we recover is street waste and with that comes the challenges of contamination and sorting. Source segregation is vital for recovery to grow,” he added. “The OCC is being used and reused. Therefore quality will continue to be an issue. Hence, mills will end up resorting to importing paper to fulfill the demand.”

Talking about the export from Kenya, he said, “Kenya exports 4000 tonnes of paper every month. 40 per cent of that goes to Uganda, 20 per cent to India, 20 per cent to Pakistan, and 10 per cent to Tanzania. Government will come up with policies to regulate those exports and we will see more people in the market.” Africa’s population is growing fast, there is a need to ramp up waste management initiatives, he added.

When asked about the recovery rate in the U.S. and Europe, Wade Schuetzeberg, Founder, Way Forward Enterprises, said, “It’s a hard question to answer. There’s a lot of angst about how those numbers are calculated.” In each country there are different methods of generating those numbers, he said, adding, “I can get certain statistics about exactly what’s exported and in what volumes from the United States. But in the EU, it’s very hard to collect this data. But there is much room for improvement.”

Gupta pointed out that in the last five years, paper has widely been accepted, not just because of its sustainability quality but also because paper is recoverable and usable multiple times. This is not the case with plastic products. They end up not being collected and get dumped in landfills in the exported country, he added.

“India is the hub of recycled paper and board. When recycled boards are concerned, we are probably producing around 700,000 tonnes of the recycled board consisting of all the grades together per annum. And whereas the brown grades are concerned, there is a surplus production of about one million tonnes. Of course, the supply is more than the demand,” said Dipesh Laddha, Director, Kalpataru. He added that the country should invest in technology to enhance the quality of finished products and eventually enhance exports. “India has a lot of potential to be a leader in the finished paper market. Not only is it strategically located, the country has also improved its production capabilities.”

Rajasekar V, Vice President, Keryas Paper Industry LLC, emphasised the need to incentivise people to collect and segregate, adding that collection has improved in the Middle East. Commenting on the current trend, he said the demand for packaging grade has gone up in the MENA region. New mills are coming up across the region, including in Oman, the UAE and Saudi Arabia.

When speaking about meeting the recovered fibre demands, he said, “We collect and meet 60 to 70 per cent of demands from within the GCC, rest is collected from Jordan, Europe and the U.S. . 75 per cent of the fibre is sold within the GCC, while the rest is exported to regions such as Africa, Bangladesh, Europe and the Philippines.”

Mawji spoke about the demand for waste paper in Kenya: “There are seven major mills in Kenya. 70 per cent of that capacity were established in the last five years. The current demand for paper boards is about 11,000 tonnes a month, and that’s projected to grow three fold to 33,000 tonnes in the next 8 to 10 years. The demand for waste paper is at about 10,000 tonnes and the supply is about 8,500 tonnes, while the rest is imported. Some of these mills are looking at bagasse.” He also gave insights into the tissue market and how going forward the focus will be on increasing quality.

Schuetzeberg quoted data from Numera Analytica to show the trend in the U.S. and Europe: , “Between 2022 and 2026, North American market growth for containerboard capacity is estimated to be 1.7 per cent that’s from 40 million upwards of 43, just shy of 44 million metric tonnes. Europe’s growth is 3 per cent and CIS and Turkey growth is 8 per cent - about 9.8 million tonnes headed to grow till about 13.6 million tonnes.” He spoke about the importance of Asia, Africa and Latin American markets for recovered fibre.

Echoing the thoughts of Schuetzeberg, Mawji said, Africa is going to be the future for recovered fibre. “The population of Africa is set to double in the next 30 years or so. Urbanisation is set to hit 44 per cent up from 35 per cent currently. Right now, the consumer market is focused in only 10 countries out of the 54 African countries. But in the future, this will expand to all countries and the future for recovered fibre lies there - in terms of investment in mills, recovery of paper and conversion of boxes.”