publicado em 26/01/2021 18:13

Why the paper sector should be cautious optimistic for 2021

Why the paper sector should be cautious optimistic for 2021

Why the paper sector should be cautious optimistic for 2021

When we analyze the numbers of the paperboard sector in this unpredictable year that we had, we have reasons for optimism, albeit cautious. The dispatch of paperboard (the entire volume produced or imported in Brazil, excluding foreign sales) closed the year 2020 with an increase of 6% above the volume of 2019 - against a projected drop of more than 4% in the national GDP as a whole in the same period. The big difference, of 10 percentage points, seems to say a lot about the changes in habit of the Brazilian population.

Throughout 2020, between March and June, the industry suffered heavy losses. The resumption, however, during the second semester, was excellent for the three links in our production chain: the paperboard manufacturer, the graphic converter and the brand owner. We can say that we had two very different years within a single one: half challenging, half very positive.

With low inventories and the consequent resumption, everyone entered a spiral of emergency order fulfillment - and we are still in it. With this, our daily crisis management committee has become, in the last two months, a “supply management” committee, which monitors the demand and supply of inputs.

Where does all this growth come from? In addition to inventory replenishment, we noticed that the sectors of food, pharmaceuticals, personal hygiene and home hygiene were the ones that most leveraged the increase in consumption, added to the contribution of the greater volume of digital sales in general (e-commerce). Consumers are more at home, better evaluate their purchases and experience more everything they acquire.

And now, in a scenario of extreme price pressure, what can we expect for 2021? With restrained optimism, we can project a new increase in the consumption of paperboard, something around 3.5%.

Among the main impacts to be faced, we must highlight the inflation of inputs and the exchange rate impact, which, alone, brought an increase of more than 30% in prices, especially pulp and chemical products that make up the paper production chain.

At the end of the end user, we see the new year as confirming a trend in consumption habits: “the home is the new social center”, say the best consultants. If even the real estate sector already feels this transformation, with the demand for bigger and more cozy houses and apartments, not to mention the inclusion of the home office in the structure of rooms and furniture, what about food, which was once again done at home ?

With this, the necessary packages are different: practical and that avoid waste, aligned to a more conscious consumer, who seeks the exchange of plastic for paperboard, whether in food, beverages or hygiene and cleaning products, with a view to recyclability.

In e-commerce, in the same way, the trend is resistant packaging, but that talk to the public - and call for the experience with the brand, towards the next purchase.

On the other hand, we know that, at some point in 2021, the domestic market should suffer some slowdown due to the replenishment of stocks in the entire production chain - we can only estimate this inversion for some time between April and May.

Whenever it is, our optimism, although cautious, is based on the numbers of the sector and the feeling we receive from the consumer, always in search of more quality both in its products and in the packaging that packages them.

* Júlio Jubert Caiuby Guimarães is commercial director at Ibema Papelcartão