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| Summary Opening Session of PRIMA 2008 |
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The Monday morning session of the Conference was challenging to many of the delegates, as they heard in detail about the competition to paper-based media from New Media, and how consumers and advertisers are spending more and more time and money on New Media, at the expense of other media, which is impacting print and paper consumption.
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The Conference proper began on Monday morning, as Frank Leerkotte, Managing Director of Cepifine and outgoing Chairman of PRIMA, introduced the Keynote Speaker, Mondi Business Paper´s CEO, Günther Hassler.
Mr Hassler delivered a presentation entitled Navigating The Paper Industry´s Challenges Today And Tomorrow. He noted that most paper industry players have not been able to create value over the business cycle, and that with the Western European market now becoming mature, it will be necessary to concentrate on emerging markets. He also pointed out that the shift of production to more competitive regions is expected to continue, and that the need to secure wood and energy - which are not only required by the paper industry - is another challenge. He suggested that it would be worth advertising the fact that in terms of wood usage, paper production creates 4 times more value and 6 times more jobs than energy production. Yet another issue that the paper industry must deal with is securing and retaining a talented workforce, Hassler noted. Regarding the effects of the computer age on paper use, he cited a survey of office employees that showed there has actually been little change in people´s day-to-day use of paper, as people prefer to work with and read from paper. The big change, he explained, has been in archiving and distribution of information, which has now largely become electronic. However, paper usage largely correlates with market penetration of PCs, and the deepest penetration of PCs is to be found, he pointed out, in the emerging markets of China and Russia. Reducing the environmental footprint of all activities must be a priority, he said, and argued that the industry must become a role model for sustainability. The creation of shareholder value, ahead of simple volume growth, must also be a focus, he added, ending with the message that innovation should be part of everyday operations, and urging all those present to become trend-setters, not trend-watchers.
Following Mr Hassler was Petter Eilertsen of Boston Consulting, who presented his company´s study on electronic media and graphic paper demand. Based on a study of 8 markets around the world, key observations, explained Eilertsen, included technology driving substitution and the internet gaining a significant share of the media market, which is affecting advertising and paper consumption. He also warned of an impending generation shift that is causing a decline in newspaper readership across many markets. He also warned of the possibility of leap-frogging in developing markets, meaning that some people and businesses who previously made limited use of any media at all, may bypass paper-based media and move straight to New Media, as a country´s wealth and technology develops rapidly. Other speakers later in the conference agreed, but Eilertsen admitted that there is so far no statistical evidence of this actually happening yet. In mature markets, meanwhile, he pointed out that paper demand is no longer growing as much as GDP, the way it did until fairly recently. He highlighted the report´s graphic paper demand forecasts to 2020, with headline developments including significant growth in China and India, but being outweighed by large declines in Western European and North American consumption. However, he did also concede that there is a risk that the substitution of paper-based media by New Media may have been overestimated, as there is such a focus on electronic media today.
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Keynote address by Guenther Hassler
Petter Eilertsen
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