A government official in China, Ts'ai Lun was a figure who worked closely under Emperor Han of the Han Dynasty. In these ancient times, when inscriptions or writings were needed, they would be made on tablets of bamboo or on pieces of silk. With silk being costly, and bamboo heavy, written word was not common.
Ts'ai Lun was not happy with these options. One day as he watched outside his window, he noticed a swarm of wasps making their nests on a large Mulberry tree. With fibers from dead wood and plant stems, the small wasps would mix the fibers with saliva to construct their nests.
As he observed the wasps working, his mind hinted at an idea. The next morning he strolled over to the Mulberry tree. He collected bark from it and finely chopped it. Mixing it with hemp rags and water, he mashed it flat, pressed out the water and let it dry in the sun. Ts'ai Lun had invented paper.
Paper has come a long way since the Han Dynasty. In Australia, the industry is over 100 years old but certain sectors have been in a state of decline. Tim Woods is the Managing Director of IndustryEdge, which provides independent analysis for the Australian paper industry. He notes that "newsprint and some communication and advertising papers are experiencing decline, but office papers used in homes and offices remains very strong. It will be a long while before that changes dramatically."
"Paper really is a part of everyday life and that will continue into the future. In Australia, consumption of packaging papers (boxes, cartons, bags and so on) is increasing, and the same is true for tissue products."
The industry's main focus is on packaging. "Globally paper and paper board accounts for approximately one third of all packaging. The growth is linked to GDP and as a result, if a country is doing well, then there will be growth in the industry." tells Tony Johnson, a Technical Director at Beca AMEC. The packaging market is worth over US$400 billion globally and Australia is poised to take a slice.
However the industry is negotiating the challenges posed by the increased use of digital communications and cheaper imports. By placing their focus on innovation, they hope to drive investment, sustainability and productivity. With the competitive advantages of relatively inexpensive resources, a highly skilled labour force and strong regulatory frameworks, industry leaders are confident in the future. Australia has one other advantage up its sleeve. "What we've got in Australia and New Zealand is Virgin Softwood Fibre and that's really positive because Asia is short Virgin Fibre" adds Tony. The fibre gives Australia a boost, providing certain characteristics (fibre length and coarseness to name two) that add excellent strength properties to packaging papers.
Foreign investors have seen this opportunity and capitalised on it in the last 25 years. "These investors are very switched on when it comes to making the best use of their assets and from an outsiders point of view it is a very strategic move getting access to the Virgin Softwood Fibre" says Tony. Tim remarks that "global owners from Europe, the US and especially Japan, has been profound and ultimately healthy for the industry. At the same time, the rise of the privately owned local businesses has been little short of remarkable. Visy are the stand-out in this regard, but in many respects, ABC Tissue is the next company to watch."
But with manufacturing competing in this cut-throat environment, industry leaders feel that they have been left without government support. "It always surprises me that Governments in home countries do not mandate local procurement of their paper supplies in Australia. It certainly happens elsewhere in the world and there is plenty of independent evidence that shows the net cost of local procurement is lower than when imported products are purchased, even at the same price. That's because local businesses pay wages and suppliers and taxes locally." says Tim.
. Jim Stanford of the Centre for Future Work at the Australia Institute agrees with this sentiment. "Australia’s manufacturing downturn is partly the result of major policy errors by government — which accepted too readily the idea that Australia doesn’t really need manufacturing. The costs of those errors will be long-lasting and broad (felt not just by displaced manufacturing workers, but by the whole national economy)." Many in the industry believe that if there is no support, " things will get worse, not better".
We've come a long way from Ts'ai Lun and the Mulberry tree. The Paper Industry is innovating, using its competitive advantages to capitalise on big markets like packaging. With a focus on innovation, investment, sustainability and productivity, Australia's paper industry is poised to grow in the future. But with subsidised competitors, it will be a difficult tree to climb.
Tony Johnson is Technical Director at Beca AMEC and was recently recognised as a TAPPI Fellow. TAPPI is the Technical Association of the pulp & paper industry, based in the USA. It has >7,000 members worldwide. He is the 3rd recipient for NZ in TAPPI ’s 100 year history. Australia and New Zealand have previously each only had 2 TAPPI fellows.
Tim Woods is the Managing Director of IndustryEdge, which provides independent analysis for the Australian paper industry.
Trent Torkar is the General Manager at Document King, which specialises in document scanning, destruction and process automation.