Italian paper: power issues
The sector figures, announced by Assocarta during the annual assembly on 19th June in Civita (Rome) by its president Paulo Culicchi (see the summary in the box) are worrying.
Justifiably perturbed, the industry is pondering over the competitive nodes that need solving in order to gain full sustainability, if not the very survival of the paper-making factories. A dedicated round table (authoritative representatives of CEPI and the Ministry of Environment were present) has put some requests down in black and white.
Reduce energy costs: vital. «A competitive node by now structural to the sector is that of energy costs, which constitute the prime cost of production», explained Culicchi. «Suffice to say that the index that defines energy-intensive enterprises in Italy (the ratio between the purchasing costs of energy products and turnover for the purposes of value added tax) varies from a minimum of 20% up to values close-on 50% for some manufacturing segments. The ratio of energy cost set against added value, as is the procedure in Germany, for a papermill stands at over 100%». The “Decreto Fare”, the Italian government package of emergency measures to bump up the economy, has been warmly welcomed, likewise the measures for bridling energy costs contained therein, but more needs to be done and sooner.
A gas price in line with the European one. It is urgent to provide the Italian market liquidity to ensure a gas price in line with the European price through the development of a forward market, the unblocking of the Transitgas system and facilitation of the transfer of gas within the EU through the harmonization of transport procedures. Indeed the alignment of the Italian price with the European one would have a structural effect, while the implementation of Article. 39 relating to the system costs is deemed of the utmost importance, bearing in mind that the same mechanism ought also to be replicated regarding gas. Today gas charges are applied in a linear fashion covering entire consumption, without taking into account the incidence of gas costs on production. Lastly, self-production of energy in cogeneration should be guaranteed equal treatment with that of the other European countries, with the aim of allowing concerns to compete on equal terms.
The position of recovered paper. In 2012 consumption in Italy of recovered paper totalled around 4.6 million tons (-8.1% compared to 2011). Like France and Spain, Italy must work towards proximity or “local” recycling of paper collected within its own national boundaries and introduce a monitoring system for exports that is in line with the community decisions and directives within the framework of the Recycling Society. National Italian collection has superseded 6.2 million tons, with a reduction of 1.4%. Nevertheless, despite domestic collection being down, the volumes of recovered paper leaving the country, especially headed for China, have grown (+11.2%), reaching 1.9 million tons.
It is also crucial to implement the provisions laid down by law that impose energy recovery priority for waste from recycling, providing for a more extensive use of existing industrial plants and a simplification of the procedures for the construction of new waste-to-energy plants for paper recycling, overcoming the current territorial and regional limits.
Compensation for indirect costs. The question of the ETS system is central, that demands the start-up also in Italy of measures for compensating indirect costs incurred by the paper industry, as required by the latest EU guidelines, via the funds deriving from the auctioning of emission rights. «Further initiatives leading to backloading (temporary shelving of allowances to be auctioned in the period from 2013 to 2015, with their being put back into circulation in the last two years of the third phase from 2019 to 2020) are to be avoided. Better still - Culicchi explains - would be the superseding of the ETS system with European undertakings that effectively boost investment and innovation throughout the industry». Hence, common action needs to be taken at European level, in particular on power matters: one only has to think of shale gas (and the inherent controversy Ed.) that means that the gas cost for a European concern is 241% higher than that for a US company, according to what Commissioner Oettinger himself declares»
Explicit questions to the EU. According to Teresa Presas (Cepi) «The survival and the future of European paper-making factories will be played out on the European front, and not just concerning the ETS market. A recent study by Ernst & Young confirms that compliance with laws and regulations stands as the greatest competitive risk for the industry». With the objective of halting the increase in costs of such compliance regulations for the next two years, Cepi is working on the project “BASTA!” [“Enough IS ENOUGH!”], E communicative undertaking whose very “claim” bears the admonishment the European paper industry intends transmitting to European and national political representatives in the coming months.
Paper in figures Between 2007 and 2012 the Italian paper industry “burned” 26 production sites and about 40,000 jobs. In 2012/2011 production and sales dropped sharply (-5% and -7% respectively), against the holding of exports (+0.2%) while energy continues to account for up to 50% of costs.
Even in the first quarter 2013 production and turnover in the sector showed a downtrend (-1.8% and -1.5% compared to the same period in 2012) due to the reduction in the volume of paper for graphics-print purposes (-5.9%) affected by the closure of the last Italian newspaper plant in early 2013. Paper for packaging volumes are also down (-1.2%), while though volumes for paper for corrugated cardboard are up (+3.9%), the same going for paper for toilet-sanitary uses (+2.6%).
In terms of domestic demand, in the first three months of the year, apparent consumption dropped by 6.9%, volumes from abroad being similarly down (-6.1%). Exports however are up, recovering 5.5% against the downturn experienced in the first quarter of 2012.
 Synthesis on corrugated cardboard. Indeed a sizeable amount the around 3.5 million tons of packaging produced in Italy with corrugated cardboard, confirming the decisive role of this material in the mechanisms of logistics.According to the figures of Gifco (Italian Corrugated Cardboard Manufacturers Group under Assografici), the corrugated cardboard sector hence appears to be withstanding the drop in demand for goods and consumption better than other sectors of Italian industry. For the second time in four years, in fact, the output of the segment registers better performances compared to other sectors, losing only a few percentage points: in 2012, in Italy, exactly 6,150,326,000 sqm of corrugated cardboard (-3.31%) were produced, while production in terms of weight was 3,472,557 tons (-3.9%). Of the more than 6 billion sqm, 5,507,128,000 were produced by Gifco member companies (equal to 3,147,951 tons, a decrease of 3.3% against the previous year). The data shows that Gifco members have better contained their losses in 2012 compared to non-associated companies, which in turn registered a decline of 8.4%. In 2012 Gifco as an association has thus been confirmed as the second largest producer of corrugated cardboard in Europe. Still speaking of Italian production, in 2012, for the second consecutive year, the manufacturers of paperboard sheets for caseworks have confirmed a better performance compared to the concerns that only produce crates. In 2012 2,662,258 sqm of cardboard sheet (-2.7% on 2011) and 3,488,068 sqm of crates were produced (-3.7% on 2011). GIFCO FIGURES AT THE END OF 2012 |
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