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Brace for impact: the Pulp, Paper, and Fibre industry’s battle ahead

The real success factors lie in system renewals and the shift to the cloud and deploying SaaS, harnessing the power of AI, and driving digital business transformation programs.

Jyri Jokinurmi / October 07, 2024

The pulp, paper, and fibre industry is facing challenges that are not just looming but existing and intensifying. The time for mitigating action is now.

In the next five years, expansion in the Asia-Pacific region is fuelled by rapid industrialization, while North America and Europe are at the forefront of cutting-edge solutions. The industry will be rocked by rapid shifts driven by sustainability mandates, evolving market demands, innovation, and volatile raw material costs.

Sustainability is no longer a buzzword — it's a battlefield. North America and especially Europe, with the impending EU Deforestation Regulation (EUDR) set to take effect in December 2025, must double down on sustainability. Companies must prove their products are not contributing to deforestation or forest degradation, and free from illegal harvesting and trade.

The war against single-use plastics rages on, pushing the shift to paper-based packaging, particularly those that are easily biodegradable. This will hit sectors like food packaging hardest, where breakthroughs in moisture and grease-resistant paper are critical. Research into water-resistant and durable coatings that enhance recyclability will be a game-changer.

Decarbonization is a revolutionary trend. The industry must slash CO2 emissions through groundbreaking energy efficiency, electrification of processes, and the adoption of bio-based materials.

The industry is about to face an onslaught of weak market conditions across most segments, especially pulp, communication papers, and packaging materials. Navigating these choppy waters will require agility and flexibility in production.

Intensifying competition for raw materials in a supply environment of shrinking availability will cause skyrocketing raw material costs.

Add to this the rising cost of energy, utilities, and labour, and you have a recipe for a profitability nightmare.

Challenges are meant to be crushed

Despite the relentless demand challenges and price pressures, the pulp, paper, and fibre markets are ripe for optimization, innovation, and a resurgence in profitability. Successful companies will focus on value creation by revamping sourcing strategies, streamlining value chains, and pushing both commercial and operational excellence to new heights.

The real success factors lie in system renewals and the shift to the cloud. Industry leaders are already making the leap, deploying Software as-a-Service (SaaS), harnessing the power of Artificial Intelligence (AI), and driving Business Digital Transformation programs.

Is your MES up to the task?

Transformation starts at the mill level. A cutting-edge Manufacturing Execution System (MES) is essential for achieving the sustainability, efficiency, and profitability needed to stay afloat.

What should a modern MES deliver?

First and foremost, it must predict demand and align production with forecasts. This is where AI and Machine Learning come into play. Advanced process optimization and predictive analytics are non-negotiable for making the right production decisions.

When it comes to process optimization, it’s all about Industry 4.0 and Smart Manufacturing. The aggressive adoption of IoT, AI, and digital twins will catapult process optimization to new heights. Enhanced real-time data collection, coupled with predictive maintenance and analytics that help both mill efficiency and market forecasts, will ensure you know exactly what needs to be done, when, and where.

The massive data influx from a modern MES will revolutionize supply chain visibility through seamless integration with ERP and supply chain systems, ensuring traceability and compliance. This gives you a decisive edge in the European market, enabling a new era of “bidirectional traceability”— satisfying your customers’ and their end-customers’ demands to know where the product was made, by whom, with what raw materials, and by what methods.

Efficient data processing will supercharge energy management and sustainability performance.

Investing huge sums in an in-house system to manage all this is a waste. Instead, partner with providers who can deliver a cloud-based MES, allowing you to pivot to scalable and flexible cloud and SaaS models. Ensure your customization and scalability needs are met with tailored solutions and scalability options.

Looking at the future, your choices are to adapt or be left behind.

What next?

If you want to know how you can transform survival into success, towards future-proof efficiency and profitability, contact Jyri Jokinurmi.

Jyri Jokinurmi
Director Business Development | Paper & Board | Pulp, Paper & Fibre | Tietoevry Industry
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