The latest report from industry analyst Plimsoll Publishing warns that zero growth, sliding profits and escalating debts have pushed a third of the UK paper and board industry to the brink of failure.
Plimsoll has produced a financial health check for each of the top 600 companies in the UK paper and board industry. It reveals that “consolidation is essential as supply is outstripping demand. All companies are having a difficult trade-off between protecting margins and appeasing price sensitive customers.”
Of most concern are the 119 companies who have been rated as being hit the hardest, the majority of whom are making a loss. “Most are taking on debt at an alarming rate simply to cover costs,” the report states.
Senior analyst David Pattison comments: “I think these figures just prove the point that we have all been aware of, that a period of consolidation is long overdue. Bit by bit the weaker players will be removed from the market.”
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