UPM: Indian newsprint demand to fall by more than 20% in 2020

Anu Ahola of UPM at WAN-IFRA India 2020 - Printing eSummit

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UPM: Indian newsprint demand to fall by more than 20% in 2020
Anu Ahola senior vice president News & Retail Business, UPM Photo: WAN IFRA

Indian newsprint demand in 2020 is expected to see more than 20% year on year decline because of the Covid-19 pandemic impact, Anu Ahola, senior vice president, news & retail business unit of UPM said during the WAN-IFRA India 2020 Printing eSummit.* “In the past few years, the rate of newsprint demand decline in India has been close to half of that of the global average. However, this year, it will be higher as India has been especially hard hit by the Covid-19 pandemic,” Ahola said.

Demand for India’s newspapers during the pandemic is severely impacted by the hard lockdown enforced countrywide on 23 March. Circulation and distribution of newspapers were disrupted during the early phases of the lockdown in all major cities. Things have improved since June, but reports suggest that newspaper companies are still facing local-level challenges in getting the physical papers delivered to the doorsteps of multi-story urban dwellings. Home delivery is the backbone of the Indian newspaper business model.

Price volatility to remain in the Indian market

Ahola said that the Indian newsprint market is heavily dependent on imports, and therefore supply remains volatile. Apart from domestic players, India is disproportionately reliant on Russia and North America for newsprint imports. Due to the massive import dependency and volatility in supply, India newsprint prices are also very volatile.

And this scenario is likely to continue, according to her. “I do not see much change in the character of the Indian market, and so I feel the trend of high volatility in prices will continue in the near future,” Ahola said.

At present, Finland-based UPM imports all its products into India and has no plans to start manufacturing locally. Ahola said that volatility is the main reason for this. “We are committed to the Indian market but due to the volatile nature of the market, but we cannot make any long-term commitments in the country,” she said.

Global capacity falling faster than demand

With growing digitalization, global demand for newsprint has been on the decline for some time. However, newsprint manufacturing capacity has been falling faster than demand decline in the 2016-2019 period.

According to Ahola, global newsprint demand decline has been about 4.5 MT per year, or 7% per year, while the capacity decline has been 5 MT per year during the period mentioned above. The capacity decline has been faster than demand decline, especially outside Europe and North America. This year the demand decline has been very sharp due to the Covid-19 pandemic. “The indicative estimate for the global demand decline in 2020 is 17%,” Ahola said.

Ahola believes that only profitable and environmentally sustainable supply will remain going forward. Also, the growth in packaging and fiber scarcity has provided an exit opportunity to newsprint manufacturers. “Producers find better prospects in the packaging segment and are exiting the newsprint manufacturing business. It is all about long-term competitiveness – of cost and sustainability,” she said. 

* Editor’s note: Our quarterly and half-yearly IppStar expert newsprint forecasts are at variance with this forecast by Ahola and put the likely demand drop for Indian newsprint in the financial year closer to 30 to 35%. Some of the demand forecast differences may be because UPM is looking at the 2020 calendar year from January to December and IppStar www.IppStar.com looks at the financial year from April 2020 to March 2020. We believe that the IppStar.com figures are supported by the indicative published raw material consumption numbers of one of the country’s leading Hindi dailies. Table 1 in the IppStar’s third newsprint update shows a 41% drop in newsprint purchases in the 2020 calendar year. We believe that substantial revenue losses from advertising and circulation and the limited pagination and circulation till end-March are likely to bear out the IppStar expert forecast.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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1 COMMENT

  1. I would tend to agree more with the Indian estimates of drop in demand as for sometime the there was no newspaper available even at newsstand because of lockdown
    From April to June 2020 the demand was down by 60% approx in the English dailies
    From July -Sept 2020 demand was down by approx 40% and its only now Oct onwards one anticipates demand would be down by 30 % .

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