Concerns and highlights of Korean paper industry...Concerns and highlights of Korean paper industry...
Transcript of Concerns and highlights of Korean paper industry...Concerns and highlights of Korean paper industry...
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Concerns and highlights of Korean paper industry
[RISI Asian Forest Product Summit]
2016. 6. 22
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Contents1. Industry Dynamics & Key
Trend P 2 ~ 4
2. Major Issues & Challenges P 5 ~ 9
3. Value Migration Patterns P 9 ~ 10
4. Smart Transformation P 11
Appx. Korea paper statistics by grade (2015)
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Industry Dynamics & Key Trend
Growth rate of Paper and Board has stalled and the previous strong interrelationshipwith GDP has begun to fade out Paper/Board growth rate Vs. GDP growth rate
: Global Paper/Board production volume, Nominal GDP YOY growth rate (1999 ~ 2013)
(Source: World Bank, IMF, RISI)
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Industry Dynamics & Key Trend
World Paper and Board production has been going through slow-down period, Graphic paper’s gradual weakness and Packaging paper’s significant increase
(Source: RISI)
World Paper/Board production (2009 ~2013)
: million metric ton per annum
370397 400 400 402
+4%
+0%
Slow down period
CAGR M/S
Total P&B 2% 100%
Specialty &Tissue 3% 12%
Packaging& Board 3% 56%
Printing &Writing 0% 26%
Newsprint -3% 6%
406
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Industry Dynamics & Key Trend
Paper and Board production in Korea has also been slowed down, Graphic paper (Newsprint + P&W) have been losing ground same as world trend
(Source: KPA _ Korea Paper Association)
Korea Paper/Board production (2009 ~2013)
: million metric ton per annum
CAGR M/S
Total P&B 2% 100%
Specialty &Tissue 3% 8%
Packaging& Board 3% 54%
Printing &Writing 0% 26%
Newsprint -1% 12%
+1%
Slow down period
10.511.1 11.5 11.3
11.8 11.7
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Grap
hic p
aper
gro
wth
rate
(‘05
~’10)
ICT development index (‘05~’10)
Major Issues & Challenges
Emerging of digital infrastructure, contents and devices has led the structurallow-growth of paper & board industry, which is a global trend
ICT Development Index Vs. Graphic paper growth rate
: Information and Communication Technology Index
1
(Source: The World Economic Forum)
Higher ICT development index,
Lower graphic paper consumption-. Top 20 countries’ average consumption
growth of graphic paper: -17%
High possibility to turn downward
of graphic paper consumption
in Korea too-. Newspaper consumption: -17%
(‘05 ~’10)
-. Sluggish consumption growth of
printing & writing paper: less 2%
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Maga-zine
Major Issues & Challenges
CWF market (000 MT) Main drivers
Less 3.0%CAGR(‘04 ~ ‘20e) 5.1%
AD market
Digitali-zation
Flyers/
DM
Catalo-gue
ChildBook
GDP recession
Magazine AD Printed Volume
AD spending DM ratio
Market size Printed volume
Population Printed volume
-10.1% -2.7%
-3.3% -2.4%
+3.0% -13%
-1.2% -3.7%
Korean CWF market is facing difficulties to maintain as decline consumption ofprinting & advertising market caused by economic recession, shrinking its population and IT media development
2
(Source: KPA, KOSTAT, KFAA)
+1%
-5%
(Domestic + Import)
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Major Issues & Challenges
Weakening demand of P&W is inevitable macro trend in the world, it already hashappened in major developed countries
2
(Source: KPMA, RISI)
Major developed countries’ P&W market trend (‘90 ~ ’14)
: thousand metric ton per annum
Europe ◀ Back to ‘96
U.S ◀ Back to ‘80
Japan ◀ Back to ‘90
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Major Issues & Challenges
In the long term, Korean paper & board market will be driven by packaging board andtissue grade instead printing & writing grade
(Source: KPA)
Korean paper & board demand trend (‘00 ~ ‘15)
: Domestic + Import shipment, million metric ton per annum
7.2
8.3
9.19.6
+2.2%
+0.9%
Others
Tissue
Containerboard
Boxboard
Printing & Writing
Newspaper
CAGR
(`10 ~ ‘15)
+1.9%
+1.9%
+3.1%
+1.9%
-2.1%-5.9%
-2.1%
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Value Migration Patterns
Because of its worsening profitability and loosing operational excellence, all of paper manufacturers in Korea are being forced to change its strategy
(Source: Annual Report)
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Value Migration Patterns
Major leading companies are transforming their business portfolio from printing & writing paper business to non printing & writing paper business _ Board & Specialty
(Source: Annual Report)
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Smart Transformation
Moorim’s “Smart Transformation Strategy” is focusing on migration its core valuesto 1) Enhancing paper business, 2) Expanding paper business, 3) New business
Strengthen
Paper Business
Maintain product & cost competitiveness
Solid share in the market (domestic &
export)
-. Concentrate on strategic issues
: operational excellence
Expanding
Paper Business
-. Focus on emerging market
-. Specialized & Value-added products
(Digital paper, Specialty paper, etc)
Advance into
Neighborhood
-. Integrate & expand downstream
-. Provide solution service to customer
-. New business
1
2
3
Dominate untapped markets in advance
Specialized products
Reintegration & Expansion to downstream
Product to Solution
Outside-in
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Appendix. Korea Paper Statics (2015)
(Unit: MT) (Unit: MT)
Domestic Export Total Domestic Export Total
1,333,796 602,547 747,756 1,350,303 50,717 3 1,524,091 749,443 764,447 1,513,890 73,074 113,478
2,919,882 1,671,493 1,216,910 2,888,403 271,452 297,854 1,509,037 736,877 762,312 1,499,189 70,243 96,448
UWF 443,070 436,118 8,905 445,023 45,483 122,011 15,054 12,566 2,135 14,701 2,831 17,030
UWC 88,593 80,151 8,781 88,932 12,834 4,676,706 4,477,947 231,598 4,709,545 176,089 197,974
Other 76,739 62,796 10,794 73,590 11,638 3,666,244 3,529,991 162,927 3,692,918 150,387 190,782
Total 608,402 579,065 28,480 607,545 69,955 122,011 1,010,462 947,956 68,671 1,016,627 25,702 7,192
279,619 280,947 4,048 284,995 43,405 275,262 264,409 6,699 271,108 22,078 42,108
CWF 1,601,584 546,236 1,044,159 1,590,395 101,748 132,834 6,476,059 5,491,799 1,002,744 6,494,543 271,241 353,560
Other 91,559 83,165 8,122 91,287 14,721 2,194 11,601,959 8,568,811 3,036,872 11,605,683 651,952 1,079,860
Total 1,693,143 629,401 1,052,281 1,681,682 116,469 135,028
10,729
338,718 182,080 132,101 314,181 41,623 30,086
185,868 159,506 26,953 186,459 25,232 64,865
122,605 100,828 22,191 123,019 12,921 64,865
63,263 58,678 4,762 63,440 12,311
500,798 464,196 38,930 503,126 11,287 35,585
185,556 179,270 3,579 182,849 22,023 327,993
5,125,900 3,077,012 2,034,128 5,111,140 380,711 726,300
Grade ProductionShipment
Inventory Import
MFC
Liner
Inner
Others
Board total
Paper & Board
Paper total
Boxboard
Coated
Uncoated
Containerboard
Packaging
Kraft
Others
Tissue
Specialty
Printing & Wrting
Uncoated
Coated
Thin paper
Information
Grade ProductionShipment
Inventory Import
Newspaper
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Contact :-. Mr. Steve Kim ([email protected], Tel +82 2 3485 1681)
Director, Overseas Sales Div. 2, Moorim Paper/P&P/SP
-. Mr. IK Lee ([email protected], Tel +82 2 3485 1526)
Team Manager, Overseas Sales Team 2, Moorim Paper/P&P/SP
-. Mr. Sunny Kim ([email protected], Tel +85 2 2121 0071)
Branch Manager, Hong Kong Office, Moorim Paper/P&P/SP
Q & A Session