Plastic rejection creates 'avenue' of new business for paper industry

The growth in paper and cardboard consumption by e-commerce and China has led the pulp and paper industry to see good prospects on the horizon. One of the most promising businesses for this area, however, came from an unusual front: the search for conscious consumption, with the replacement of plastic products with paper products. In addition to banned straws, other plastic products discarded after a single use (such as dishes, cups, cutlery, straws and drink stirrs, known as single-use plastics) have been exchanged for biodegradable versions. Companies such as Suzano and Klabin have managed to preview the movement, invested in the area and have had good results. The growth in paper and cardboard consumption by e-commerce and China has led the pulp and paper industry to see good prospects on the horizon. One of the most promising businesses for this area, however, came from an unusual front: the search for conscious consumption, with the replacement of plastic products with paper products. In addition to banned straws, other plastic products discarded after a single use (such as dishes, cups, cutlery, straws and drink stirrs, known as single-use plastics) have been exchanged for biodegradable versions. Companies such as Suzano and Klabin have managed to preview the movement, invested in the area and have had good results. According to Daniel Sasson, pulp and paper analyst at Itaú BBA, this is a clear trend that has gained traction, especially from some practical attitudes of governments and entities. "I see this move advanced more forcefully in Europe, where it already has legislation to ban the use of plastic items such as straws and cutlery by 2021. It is a global pressure that is now turning into concrete actions, but we will see the impact of this more gradually on companies in the sector," he says. For the analyst, the paper producers for packaging in Brazil are well positioned in this context, especially Klabin, which has more concentrated businesses in this market than competitor Suzano. According to Daniel Sasson, pulp and paper analyst at Itaú BBA, this is a clear trend that has gained traction, especially from some practical attitudes of governments and entities. "I see this move advanced more forcefully in Europe, where it already has legislation to ban the use of plastic items such as straws and cutlery by 2021. It is a global pressure that is now turning into concrete actions, but we will see the impact of this more gradually on companies in the sector," he says. For the analyst, the paper producers for packaging in Brazil are well positioned in this context, especially Klabin, which has more concentrated businesses in this market than competitor Suzano. Deganutti says that since the 1960s, the single use segment has grown by between 5% and 5.5% per year globally. "With the transformation of consumer habits, an important part of these businesses now goes toward more sustainable products," he says. 'Opportunity frenzy' The resin used by Suzano also began to be tested in papers for catalogs and books, which eventually led to the development of paper for straw. "We opened a new file marked with the role for straw (Loop), a market that moves R$ 200 million per year in Brazil." After the launch of this product, Suzano was sought to develop a solution that replaces the plastic rod of the swabs. "The opportunities spring up. It's almost a frenzy of opportunities that come up, without us even being able to quantify all this," he says. At the moment, Suzano has been working on the development of products that will replace not only food packaging, but bags, bags, etc. "For each type of use, this resin needs to be reworked," he says. Aware of the relevance and speed of this change of behavior, Suzano has allocated, with Fibria, 1% of net revenue stemming from the Research, Development and Innovation area. "We are evolving very quickly and these solutions are sprouting at this rate because of this investment," he says. Klabin, in turn, develops five lines of research in its Technology Center inaugurated in June 2017 in Telemaco Borba, Paraná. Its researchers have worked on the development of new products and pulp applications; quality of wood; development of new packaging paper products and applications; new technological routes with a forest-based basis; environment and sustainability. The Brazilian paper industry has grown on average 2% per year. With the migration from plastic to paper, Klabin's Deganutti estimates that the paper segment should grow around 3% per year. Among other potential markets, the executive also points to the plastic label industry, for which Klabin has developed thinner paper, which can be used in bottles, cups, in addition to a whole range of yogurt packaging, only for quote some examples. Piloto Park, Melodea and Puma II Klabin's Pilot Plant park, announced last year that it plans to build two factories for industrial production of microfibrillated and lignin cellulose, is in the final stages of testing. To strengthen its Research, Development and Innovation front, Klabin also acquired 12.5% of the Israeli startup Melodea Bio Based Solutions, a pioneer in nanocrystalline pulp extraction (CNC) technology, produced 100% from sources Renewable. $2.5 million was invested in this operation. "We have been working on the production of lighter papers. The plan is to do more with less," says klabin's executive, revealing that the product has already gone through the testing phase on an industrial scale and should be launched soon. The paper mill that is under construction in project Puma II – billion-dollar expansion announced by Klabin in Ortigueira, Paraná - will allow the production of 10% lighter packaging. The first stage of the project involves the construction of a fiber line to produce unbleached pulp integrated with a Paper Machine Kraftliner and Kraftliner White, which will be sold under the Brand Eukaliner, 100% eucalyptus fiber product. The annual capacity will be 450,000 tons per year. The second stage includes the construction of a complementary fiberline integrated with a Kraftliner paper machine with a capacity of 470,000 tons annually and expansion of some support structures. For Grimaldi, from Suzano, we are just at the beginning of a long journey. "That's just the tip of the iceberg. We see an extremely fertile future in the paper products segment that replaces plastic packaging," he says. Dimension of the problem According to a survey by Finland's Pöyry, which last year launched a global consulting service on the replacement of fossil plastics, global plastic production is approximately 400 million tonnes per year. Of this total it is estimated that only 14% to 18% is being recycled. At the root of the problem, experts point out, packaging – the main destination of plastic consumed by the Food and Beverage industries – are the great villains. Overall, Pöyry points out, the packaging industry accounted for 47% of plastic waste generation in 2017, followed by the textile sector, which accounted for 13%. Together, the two segments accounted for 45% of plastic production in the same period. The consultancy says the solution to the problem may still be distant, but owners of state-of-the-art brands such as Starbucks, H&M and Tesco have finally awakened to the seriousness of the situation and if positioned publicly. Whether replacing the plastic packaging of your products with alternative materials based on natural fibers or expanding efforts in plastic recycling, the movement is still considered insufficient but welcome.