Newspaper Business after Covid-19

An alarming situation for newsprint continues

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Newspaper business after Covid-19 photo IPP

In the Wan-Ifra webinar on 14 October 2021, Ruud Van Den Berg, senior vice president, global sales, UPM Communication Papers, addressed the newsprint business after Covid-19. In this session, he said, the global demand for newspapers declined after the Covid-19 pandemic, but demand more or less started dropping from 2006 onwards. There was an intense dip in 2009 during the financial crisis, from 2010, and the demand for newspapers has not come back in most markets. The trend shows a significant decline in newsprint demand dictated by Covid-19 lockdowns around the world. 

Graphic paper demand impacted by the lockdown

For graphic papers, the demand in 2021 has declined more than 20% in comparison to 2019, according to UPM. (However, according to our sister organization www.ippstar.org, based on the lower consumable purchases of Indian newspapers, the Indian newsprint demand in the 2020-21 financial year declined by 40%.) According to Van Den Berg, the trend decline continues to be influenced by digital readership, although there may be a saturation of digitalization. The new consumption habits of users are the economic model for digital subscriptions.

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Newspaper demand graph

Nevertheless, according to Van Den Berg, the newspaper demand due to pandemic caused the largest ever annual fall in global newsprint consumption in 2020 – 22% from 2019 to 2020, and with 2021 likely to be 3% lower than 2020. This accelerated decline in the global newsprint demand will lead to a harmful effect on the industry, he warned.

According to him, in the current year, North American newsprint demand will decline by 17%, Europe by 13%, and India, which is still a market with robust demand for printed

newspapers, is also facing a decline of 26%. The presentation by UPM indicated that only China is close to stabilization, with newsprint demand increasing by 1%.

The presentation indicated that users globally mainly prefer digital news content and, to avoid the effects of Covid-19, tend to move to digitalization, giving preference to digital news. The demand for digital subscriptions is increasing rather than the demand for printed newspapers. “Newspaper publishing is a regional business with all the logistics challenges growing, as we see in the pandemic. Users are not taking a newspaper because of Covid-19, and the delivery of the newspaper has to go through specific steps for the users to read them.” 

Newsprint capacity halved

There have been many changes in the newsprint producers table in just the past five years. The behemoths of newsprint production, like Resolute FP, which had a capacity of more than 3 million tons in 2016, UPM, Nippon and many more, with a tremendous capacity of newsprint, are now at just half the capacity in 2021. The company that topped the table earlier is now in the eighth position because of the continuous decline of newsprint demand. It kept adjusting its capacity to the need and demand.

Newspaper business
Newspaper producers graph and position in 2016 to 2021

Input costs rise 

After the pandemic, production costs increased. Of the paper producers, more than 25% have started to run a negative cash flow, according to Van Den Berg. This is an unsustainable situation, and the companies can’t continue to work. The paper mills and machines that have already implemented adaptations (to other paper grades or machine shutdowns) for their survival have to be further adapted in 2022 — the latest level of energy pricing reinforcing the profitability challenge. The rise in the price of electricity and gas will also negatively impact the industry.

Recycled paper availability is also a growing issue driven by high packaging demand and declining print consumption. Paper demand is not coming back to the average levels before the pandemic. Recycled fibre is increasingly used in packaging papers spurred by eCommerce that proliferated in the Covid-19 period. The newsprint producer cannot pay for poor quality recycled paper. With poor inputs, the paper machine efficiency and paper quality will decrease, and users (newspaper printers) will not purchase it again.

 

The Covid-19 pandemic led to the country-wide lockdown on 25 March 2020. It will be two years tomorrow as I write this. What have we learned in this time? Maybe the meaning of resilience since small companies like us have had to rely on our resources and the forbearance of our employees as we have struggled to produce our trade platforms.

The print and packaging industries have been fortunate, although the commercial printing industry is still to recover. We have learned more about the digital transformation that affects commercial printing and packaging. Ultimately digital 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.

Web analytics show that we now have readership in North America and Europe amongst the 90 countries where our five platforms reach. Our traffic which more than doubled in 2020, has at times gone up by another 50% in 2021. And advertising which had fallen to pieces in 2020 and 2021, has started its return since January 2022.

As the economy approaches real growth with unevenness and shortages a given, we are looking forward to the PrintPack India exhibition in Greater Noida. We are again appointed to produce the Show Daily on all five days of the show from 26 to 30 May 2022.

It is the right time to support our high-impact reporting and authoritative and technical information with some of the best correspondents in the industry. Readers can power Indian Printer and Publisher’s balanced industry journalism and help sustain us by subscribing.

– Naresh Khanna

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Correspondent-Delhi & NCR Girish has been working and editorially contributing to both Indian Printer and Publisher and Packaging South Asia since 2021, covering the western regions of India. He has extensively covered a variety of verticals in both the printing and packaging industries. Skilled in taking Interviews and Story Writeup, Communication, Writing, and Research. Strong education professional with a Master of Arts - MA (MASS COMM.) focused in Mass Communication/Media Studies from Aligarh Muslim University, Aligarh.

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