Concerns and highlights of Korean paper industry

Transcription

1 Concerns and highlights of Korean paper industry [RISI Asian Forest Product Summit]

2 1. Contents Industry Dynamics & Key Trend P 2 ~ 4 2. Major Issues & Challenges P 5 ~ 9 3. Value Migration Patterns P 9 ~ Smart Transformation P 11 Appx. Korea paper statistics by grade (2015) 1 page

3 Industry Dynamics & Key Trend Growth rate of Paper and Board has stalled and the previous strong interrelationship with 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) 2 page

4 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 World Paper/Board production (2009 ~2013) : million metric ton per annum Slow down period % +0% CAGR M/S Total P&B 2% 100% Specialty & Tissue 3% 12% Packaging & Board 3% 56% Printing & Writing 0% 26% Newsprint -3% 6% (Source: RISI) 3 page

5 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 Korea Paper/Board production (2009 ~2013) : million metric ton per annum Slow down period +1% CAGR M/S Total P&B 2% 100% Specialty & Tissue 3% 8% Packaging & Board 3% 54% Printing & Writing 0% 26% Newsprint -1% 12% (Source: KPA _ Korea Paper Association) 4 page

6 Major Issues & Challenges 1 Emerging of digital infrastructure, contents and devices has led the structural low-growth of paper & board industry, which is a global trend ICT Development Index Vs. Graphic paper growth rate : Information and Communication Technology Index Higher ICT development index, Graphic paper growth rate ( 05~ 10) 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% (Source: The World Economic Forum) ICT development index ( 05~ 10) 5 page

7 Major Issues & Challenges 2 Korean CWF market is facing difficulties to maintain as decline consumption of printing & advertising market caused by economic recession, shrinking its population and IT media development CWF market (000 MT) Main drivers +1% (Domestic + Import) -5% AD market CAGR ( 04 ~ 20e) GDP recession Less 3.0% 5.1% Maga -zine Magazine AD Printed Volume -10.1% -2.7% Digitali -zation Flyers / DM Catalo -gue AD spending DM ratio -3.3% -2.4% Market size Printed volume +3.0% -13% Child Book Population Printed volume -1.2% -3.7% (Source: KPA, KOSTAT, KFAA) 6 page

8 Major Issues & Challenges 2 Weakening demand of P&W is inevitable macro trend in the world, it already has happened in major developed countries 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 (Source: KPMA, RISI) 7 page

9 Major Issues & Challenges In the long term, Korean paper & board market will be driven by packaging board and tissue grade instead printing & writing grade Korean paper & board demand trend ( 00 ~ 15) : Domestic + Import shipment, million metric ton per annum +0.9% CAGR +2.2% Others Tissue (`10 ~ 15) +1.9% +1.9% 7.2 Containe rboard +3.1% Boxboard +1.9% Printing &Writing -2.1% Newspape -2.1% r -5.9% (Source: KPA) 8 page

10 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) 9 page

11 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) 10 page

12 Smart Transformation Moorim s Smart Transformation Strategy is focusing on migration its core values to 1) Enhancing paper business, 2) Expanding paper business, 3) New business 1 Strengthen Paper Business Maintain product & cost competitiveness Solid share in the market (domestic & -. Concentrate on strategic issues : operational excellence export) 2 Expanding Paper Business Dominate untapped markets in advance Specialized products -. Focus on emerging market -. Specialized & Value-added products (Digital paper, Specialty paper, etc) 3 Advance into Neighborhood Reintegration & Expansion to downstream Product to Solution Outside-in -. Integrate & expand downstream -. Provide solution service to customer -. New business 11 page

13 Appendix. Korea Paper Statics (2015) (Unit: MT) (Unit: MT) Grade Production Shipment Shipment Inventory Import Grade Production Domestic Export Total Domestic Export Total Inventory Import Newspaper Printing & Wrting 1,333, , ,756 1,350,303 50,717 3 Boxboard 1,524, , ,447 1,513,890 73, ,478 2,919,882 1,671,493 1,216,910 2,888, , ,854 Coated 1,509, , ,312 1,499,189 70,243 96,448 UWF 443, ,118 8, ,023 45, ,011 Uncoated 15,054 12,566 2,135 14,701 2,831 17,030 Uncoated UWC 88,593 80,151 8,781 88,932 12,834 Containerboard 4,676,706 4,477, ,598 4,709, , ,974 Other 76,739 62,796 10,794 73,590 11,638 Liner 3,666,244 3,529, ,927 3,692, , ,782 Total 608, ,065 28, ,545 69, ,011 Inner 1,010, ,956 68,671 1,016,627 25,702 7,192 MFC 279, ,947 4, ,995 43,405 Others 275, ,409 6, ,108 22,078 42,108 CWF 1,601, ,236 1,044,159 1,590, , ,834 Board total 6,476,059 5,491,799 1,002,744 6,494, , ,560 Coated Other 91,559 83,165 8,122 91,287 14,721 2,194 Paper & Board 11,601,959 8,568,811 3,036,872 11,605, ,952 1,079,860 Total 1,693, ,401 1,052,281 1,681, , ,028 Thin paper Information Packaging Kraft Others Tissue Specialty Paper total 10, , , , ,181 41,623 30, , ,506 26, ,459 25,232 64, , ,828 22, ,019 12,921 64,865 63,263 58,678 4,762 63,440 12, , ,196 38, ,126 11,287 35, , ,270 3, ,849 22, ,993 5,125,900 3,077,012 2,034,128 5,111, , , page

14 Q & A Session Contact : -. Mr. Steve Kim (steve@moorim.co.kr, Tel ) Director, Overseas Sales Div. 2, Moorim Paper/P&P/SP -. Mr. IK Lee (argent23@moorim.co.kr, Tel ) Team Manager, Overseas Sales Team 2, Moorim Paper/P&P/SP -. Mr. Sunny Kim (sunjai@moorim.co.kr, Tel ) Branch Manager, Hong Kong Office, Moorim Paper/P&P/SP 13 page