UK exports of recovered materials must keep quality high, says WRAP
26 Feb 2010
China remains the key export market in the recovered paper and plastics supply chain and Chinese importers increasingly use quality, as well as cost, to differentiate between suppliers, according to WRAP (Waste & Resources Action Programme).
WRAP’s recently published sentiment survey into Chinese markets for recovered paper and plastics gives a clear indication that the Chinese paper and plastics industries have recovered well from the market downturn in 2008 and are positive about the prospects for 2010.
According to WRAP, this is good news for UK exporters, however it stressed that maintaining good quality standards is key to remaining competitive.
In general the Chinese respondents’ perception was that UK’s recovered fibre and plastic quality was relatively good, but by no means the best. This was corroborated by discussions with the trade associations.
Although the UK is one of the top countries sourced from, there were tentative signs that quality could be perceived as a deterrent to buying even more UK recovered paper – although the survey said it is difficult to disentangle price from quality considerations. Evidence from the survey and stakeholder discussions suggested that moisture content was the main bone of contention for recovered paper, while issues for plastics were more varied and grade-specific
Looking beyond China, WRAP said the UK exports a significant amount of recovered paper to India and Indonesia, albeit much less than to China. Recent WRAP research shows that paper production in India and Indonesia is forecast to grow steadily throughout the next decade and demand for recovered paper is expected to rise accordingly. The UK is reported to be the single largest supplier of recovered paper to Indonesia, with a 23% market share in 2008.
In total, more than 60% of Indonesia’s recovered paper imports are from Europe. Other major suppliers are the US, Singapore and Australia.
The UK exported 420,000 tonnes of recovered paper to Indonesia in 2009.
The WRAP research went on to suggest, however, that paper manufacturers in India and Indonesia are likely to try to satisfy some of their recovered paper needs by increasing collections of cheaper, domestic recovered paper rather than by increasing imports.
Accordingly, there may be only modest potential for further growth in exports of recovered paper to India and Indonesia and future market opportunities are likely to hinge on the gap between domestic and imported recovered paper prices.
Marcus Gover, director of market development at WRAP said: “Quality is a competitive differentiator for importers, particularly as import controls tighten. We must remember that the UK is only one of many sources of recovered materials for China. So despite the positive outlook from China, we must remain vigilant of our own export quality and conscious of the quality our competitors can produce.”