Technavio’s latest report on the paper manufacturing market in Serbia provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.

 Paper manufacturing market in Serbia at a glance

The paper manufacturing market in Serbia has been growing at a modest rate since 2010. Strong demand from the domestic market for consumer products, such as paper-based household and sanitary products, has contributed to the growth of manufacturers. Consumer spending on these products has remained stable despite the negative impact of the global economic recession of 2008, and the country’s negative GDP growth between January 2014 and July 2015. Demand from non-household end-users, such as the catering industry and retailers of consumer products, is also expected to increase during the forecast period.

The top three emerging trends driving the paper manufacturing market in Serbia according to Technavio chemicals and materials research analysts are:

    Growing focus on niche product segments
    Increase in demand and production of recycled paper
    Rise in consolidation

Growing focus on niche product segments

Large and medium-sized manufacturers are focusing on niche consumer product segments to enhance revenues. The demand for impregnated wet wipes and tablecloths, in particular, grew at a CAGR of over 10% during 2013-2015. Though these products account for a small share of the overall paper manufacturing market in Serbia, increasing demand for such products is expected to have a significant impact on the market during the forecast period. “These product segments are relatively under-penetrated compared to other consumer product segments, such as paper-based tissues and sanitary products, and, hence, are likely to provide manufacturers with growth opportunities,” says Chandrakumar Badala Jaganathan, one of the lead analysts at Technavio for research on textile, fiber, and composites.

Increase in demand and production of recycled paper

Recycled paper is derived from fibers recovered from scrap paper. The consumption of recycled paper in Serbia increased tremendously during 2009-2015. In 2009, the consumption of recycled paper in Serbia amounted to approximately 12,000 tons, and this increased further at a CAGR of over 77% during 2009-2015. Production and imports of recycled paper also grew at CAGRs of over 25% and over 10%, respectively, during the same period. The demand for products belonging to this segment is expected to contribute to the growth of manufacturers offering these products, apart from attracting new entrants.

Rise in consolidation

The paper manufacturing market in Serbia is witnessing increasing consolidation, especially in segments such as paper packaging. For instance, in 2014, Mondi, an international packaging and paper group, acquired Intercell, a Serbian manufacturer of industrial paper bags. Currently, Mondi holds a market share of 30%-40% of the paper manufacturing market in Serbia. “The entry of foreign manufacturers is likely to increase during the forecast period because of the market’s growth potential, which in turn is expected to lead to a rise in consolidation,” adds Chandrakumar.

Competitive scenario

The paper manufacturing market in Serbia is characterized by the presence of over 600 manufacturers, of which, 82.1% are micro-sized and 14.8% are small-sized manufacturers. Competition is largely between the medium and large-sized manufacturers.

The paper manufacturing market in Serbia is characterized by the presence of diverse international and regional manufacturers. However, as international players have established their footprint in the market, regional manufacturers are finding it increasingly difficult to compete with them, especially on aspects such as quality, technology, and pricing. International players are expected to grow inorganically by acquiring regional and local players. In addition, there is an influx of private labels in the market.
 
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.