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Paper sector changing; Scheufelen sees positive development

Monday, October 11, 2010

Press release from the issuing company

In 2009 the German paper industry experienced the worst production collapse since the oil crisis in 1975. Overall, annual production of paper, card and cardboard fell by eight per cent to around 21 million tonnes. Specifically graphic paper declined by 13 per cent. In view of its share of 44 per cent of total paper production this was a large slump. Nevertheless, in worldwide comparison, the German paper industry has remained Number Four - after the USA, China and Japan – and the Number One in Europe (*1). Despite the light upturn tendencies, paper manufacturers will have to adjust to great changes in the future.

In contrast, 2009 was very successful for Papierfabrik Scheufelen, Lenningen. The turnaround was achieved and a profit was achieved for the year. From the point of view of the CEO, Dr. Michael Spallart, this success related to the good cooperation with the parent company, Powerflute, to the great commitment of the whole team and not least to the high quality premium products.

However, 2010 has been the most difficult year that the paper industry has ever had up to now. Developments that companies largely could not absorb themselves have hit the sector with full force, leading to the already well known price increases. The hardest blow was probably the drastic cost increases for raw materials such as pulp and chemicals, which appeared as early as the middle of 2009. The price per tonne of pulp alone went up by € 260 within a year, which means by over 50 per cent up to September 2010. Significant cost drivers can also be seen in logistics and distribution. Also the extra tax burden on energy cannot be borne by the manufacturers alone. The current rather negative de-velopment of the US dollar also has to be included in cost considera-tions.

Scheufelen is concentrating on the worldwide marketing of its premium products and brands such as PhoeniXmotion, heaven 42 and Job Parilux. Distribution activities for the high quality coated paper BVS will be significantly strengthened in Central Europe.

Demand for paper is growing, but not to the extent that is being pro-duced at the moment. This applies not only to the news print sector but also to the manufacture of coated paper. Although the industry has finally closed coated production locations with a capacity of more than one million tonnes in the last twelve months, capacity adjustments in the industry will also be necessary in the future.

With its high capacity for innovation Scheufelen decisively influences the development of premium paper. According to the company, the uncompromising premium quality of its top coated paper can only be achieved by using the latest technology and a high level of specialist knowledge.

The stable and successful further development of Scheufelen is high-lighted by Dr. Spallart's central ideals and values. Respect, sustainabil-ity, quality and innovation. In addition, the company also sees itself obliged to creativity, differentiation and a high level of service. Sustain-able management and programmes associated with this, such as sav-ing energy, water, transport loads, the careful selection of raw materi-als and, above all the further development of staff, will also in future remain a high priority at Scheufelen.




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