Comments of Aleksey Vdovin, Deputy General Director for Sales at Volga AO, on the situation on the paper markets in Russia and the world and plans to expand the company’s product portfolio.
– “The coronavirus pandemic has hit the economies of all countries without exception.
If we describe the situation in numbers, then the capacity utilization for the production of newsprint in the world has decreased to just over 60% (data from an authoritative organization).
Wallets need to be at least 90% utilized for production to work efficiently. Accordingly, to load capacity, manufacturers began to fight for orders, often through price dumping.
But in any situation there is also a positive side. Thus, in Russia, after the lows of paper consumption in the second quarter of this year, there is a normalization of the situation with the publication of print media. Therefore, we are optimistic about the Russian market today.
Returning to export markets, it should be noted that the situation is very different by region and country. For example, the Chinese market recovered quite quickly. After the lifting of strict restrictive measures related to the spread of the coronavirus, Europe is also returning to normal life and consumption. The newsprint market in Africa is still far from stabilizing, but some recovery in consumption has been outlined.
It should be noted that AO Volga was better prepared for the current situation than its competitors. Back at the end of 2019 (and this was one of the elements of our company’s development strategy), step by step, we took the path of product diversification.
In particular, we mastered the production of packaging grades of paper, which are used in the production of corrugated cardboard and, at the next stage, for the production of corrugated boxes, which are widely used in e-commerce. It is no secret that this segment not only did not suffer, but even grew during the pandemic.
Today, more than 50% of the paper mill’s products are exported in the form of packaging grades. Having a second pillar product in the portfolio allows us to look confidently into the future.
In addition, we have ample opportunities to work directly with consumers of our products around the world, and in some cases we can refuse the services of traders offering these tools, since we ourselves have tools that compete with the services of European trading companies. “