Due to the increase demand for raw material and the increase in the price, the Egyptian paper industry is experiencing an instability in the market.
One of the main sources of this problem ; is the lack of availability of these substances (waste paper). In paper making, the reliance falls on the recycled waste paper. Egyptian paper and cardboard plants do not rely on wood pulp because forests are not available in Egypt. Therefore, paper mills rely on waste paper assembled by the cardboard companies, printing presses, paper mills, and on waste collectors to recycle paper and to use it as raw material for the production process.
The paper market is witnessing instability. Although reasons are not clear, speculations say that some can return to :
- The actual economic recession Egypt is passing through that is creating a reduction in the consumption rate, thus in the reduce of the supply and demand.
- The search for some companies and factories to transform waste to a comprehensive product that can immediately find its way to export ; as the rise in the value of the Dollar in comparison to the Egyptian
Pound allows the Egyptian companies to increase their profit ; but also, to creating a shortage of the raw material in the local market.
- Lately, the establishment of a modern paper mill that demands 650 tons per day of waste paper to produce 500 tons of paper per day. This new mill creates a drain in the use of waste paper ; lowering the chance
for other factories to secure their raw material.
- The rise in the price of the Dollar resulting that some companies are pushed to stop or reduce paper import.
Some of the major cardboard companies own a paper mill as well. So, they went on buying from small paper mills, others, went on participating other cardboard companies in their share...
Other reasons certainly are causing instability, the future will undoubtedly lead to more fluctuations and changes in terms of the paper industry in light of the economic instability the country is witnessing.
It is therefore natural to see that some of these paper mills will continue to grow and prosper, while others will find it difficult to maintain their position, hence their competitiveness and survive it after all !