The COVID-19 pandemic created opportunities for multiple sectors but has also caused complications for others. One that has suffered a strong impact in 2021 is cardboard and packaging.

Smurfit Kappa has an industrial bag conversion plant in Guayaquil for the construction, chemical and food industries. Until July 2021, the company has processed 7,930 tons of paper, 41% above the year 2020 (5,600 tons) and 47% above the year 2019 (5,400 tons).

This is due to the fact that most of the corrugated cardboard boxes produced locally are used as packaging for most of the Ecuadorian exportable offer, such as bananas, shrimp, seafood, mango, broccoli, pineapple, exotic fruits, manufactured products, among others.

Meanwhile, the remaining boxes allow the movement of processed foods, beverages, oils, detergents, dairy products, medicines, fruits and vegetables, textiles, personal hygiene products, manufactured products, and others of national manufacture in the domestic market.

In 2020, Ecuador consumed around 748,000 metric tons of paper for the manufacture of corrugated boxes, that is, 5.3% more than the total of 710,000 tons consumed in 2019. In 2020, the banana sector alone demanded more than 381 million corrugated cardboard boxes.

In the first half of 2021, the country has demanded a volume of packaging paper that is around 375,000 t. The main corrugated cardboard manufacturers are Procarsa, Grupasa, Cartopel, Panasa, Incarpalm, ICE, Cartorama and Cransa.

Rafael Simon, executive president of Cartopel, said that the great demand from the export sector and the domestic market is compounded by packaging for the nascent electronic commerce sector that had its definitive start from the confinements decreed by the pandemic.

The growth of this sector has generated another problem for the national paper sector: the lack of paper for its production, mainly due to the reduction in exports from the United States, Brazil, Europe and Asia, the largest suppliers for Latin America, especially for Ecuador.

The US, being the main historical supplier of paper for Ecuador, is exporting this year 43% less to our country. This is due to the growing demand for packaging in the United States, which reduces its export volume. Also, in Europe and Asia the situation is tremendous with the issue of the shortage of paper to manufacture cardboard boxes”, explained Simon.

This, because Ecuador is not self-sufficient in the production of papers for corrugated packaging, since of the total paper required for the manufacture of these, the country produces only 51% of said volume, that is, around 382,000 t per year, in the Panasa mills, located in Marcelino Maridueña (Guayas); Cartopel, in Cuenca; Surpapel, in Durán; and Cartorama, in Guayaquil.

Additionally, a part of the volume of paper produced by Ecuador is destined for export markets, so more than half of the national demand is imported from the United States, Brazil, Europe and Asia.

“The corrugated cardboard industry has experienced an inordinate increase in its production and transportation costs, both for maritime import freights and land transport within the countries of origin, from which paper is imported,” explained the spokesperson. de Cartopel, who added that most of the raw materials, chemicals and supplies, fuels, spare parts and parts used by this sector have also experienced significant increases in their prices during the last two years.

This means that from 2020 to date the metric ton of paper will go from $ 450 to $ 900.

Alonso Roa, general manager for Ecuador of Smurfit Kappa, an Irish company that celebrates 17 years in the country, confirms the delicate situation of the Ecuadorian paper market, where he assured that his company serves the local market of industrial sacks and has 85% of participation and exports to destinations such as Peru and Venezuela.

He assured that there is an unprecedented situation in the paper market, where the great demand for packaging material has led to the prices of paper being very high compared to last year, approximately 40%, added to the shortage of containers that are present in maritime logistics.

However, demand for the company, which has an industrial bag conversion plant in Guayaquil, continues to rise. According to Roa, in a cumulative period up to July 2021, 7,930 tons of paper have been processed, 41% above 2020 (5,600 tons) and 47% above 2019 (5,400 tons).

“The paper market for sacks is very impacted by the high demand. This is because many sectors and mainly construction are engines for the economic reactivation of the countries. After the pandemic, these sectors have presented an important dynamism that keeps it high, “said Roa, who added that in the corrugated cardboard line, changes in people’s consumption habits have promoted and accelerated e-commerce and This means that the demand worldwide remains high.

In this regard, the Ecuadorian Chamber of Electronic Commerce (CECE) confirmed that, according to studies, the growth of e-commerce during the health crisis in the region (Latin America) grew in just two months, which should have grown in five years and assured that the e-commerce channels of companies that previously represented 5% of sales today reach up to 100%.

In 2019 in Ecuador, they moved around $ 1,600 million and for 2020 the projections of $ 2,000 million were exceeded and the year ended with $ 2,300 million.

However, Leonardo Ottati, president of the CECE, clarified that not all companies that use e-commerce use paper as their main source for packaging, but biodegradable elements and others,

He pointed out that if e-commerce means a real impact on the scarcity of paper, the situation should be taken advantage of so that the figures are honest and that large companies begin to innovate in their ways of packaging their products and for suppliers to find the way to make packaging more eco-friendly.

Ottati assured that the large e-commerce companies in the world are promoting initiatives to lighten the packaging process, which includes the use of materials for these.

“I think it is something that must be constantly studied and evaluated, it is a figure that we must take into account and if it is real we must work to ensure that the consumption of packaging paper, which at the end of the day ends up being waste, we can use other materials to achieve this without detracting from the quality of the shipment and obviously the protection of the product, ”said the CECE spokesperson.

In the case of Smurfit Kappa, according to Roa, the packaging made from paper is sustainable and environmentally friendly.

“At Smurfit Kappa, we have launched the global Better Planet Packaging initiative, in which we will use our strength in design and innovation to develop new products, collaborate with our customers and suppliers, and conduct research to address the challenges of packaging and packaging waste. . This project promotes the development of packaging that is 100% recyclable, biodegradable and comes from renewable sources”, revealed the general manager for Ecuador of Smurfit Kappa.

However, what is the expectation for the rest of the year? Simon believes that this complex situation does not present expectations of a short-term solution and that no changes are foreseen for 2022, given that the increase in global demand for paper has a higher growth rate than the increase in supply, that is, , at the rate at which new paper mills open their doors or existing ones increase their production capacity.

“In summary, we are facing a structural problem, in which the market experiences a serious mismatch between supply and demand”, analyzed the executive president of Cartopel.