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Opportunities in Mexico’s paper industry

October 2, 2020
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Why this is important to Wisconsin businesses: The market depends on imports since it does not produce enough to meet domestic demand.

According to Mexico’s National Chamber of Paper, the country’s paper industry is highly concentrated, with only 27 companies manufacturing nearly all of the paper products. The industry directly employs 65,000 people in 53 manufacturing plants across 21 states. As of 2019, the estimated value of paper products manufactured in Mexico reached $ 13.3 billion, which equals to 1.8% of Mexico’s GDP. The total amount of paper manufactured in Mexico during 2019 totaled 5,805 metric tons, yet the total demand for paper products was 8,370 metric tons, meaning imports of 2,771 metric tons and exports of 206 metric tons.

Mexico has the largest production capacity of paper products in Latin America. The paper industry in Mexico has three main divisions:

  1. Packaging products. During 2019, up to 69% of total manufactured products (3,994 metric tons) went to packaging products, yet the total demand was 5,595 metric tons, meaning imports of 1,651 metric tons and exports of only 50 metric tons. Demand for packaging paper has increased by 58.1% in Mexico since 2008.
  2. Printing and writing. Total demand for this kind of paper totaled 1,279 metric tons during 2019, of which the country produced 41.3%, or 528 metric tons, and imported 721 metric tons. Consumption of printing and paper products has decreased by 27.9% since 2008. Notably, newsprint experienced a larger decline, since its demand has decreased by 59.1% since 2008 due to digitization and the rise of online media.
  3. Disposable paper products (toilet paper, facial tissue, kitchen towels, napkins) accounted for domestic production of 1,283 metric tons, and imports and exports of 348 metric tons and 135 metric tons, respectively. In the case of these products, increases in consumption are strongly related to increases in population and disposable income.

As mentioned, the industry is highly concentrated, with a few major brands dominating the market. Kimberly-Clark is the dominant force in the disposable paper products division, with an estimated market share of over 60%. The BIO Pappel company (owner of the Scribe brand) is the largest company in the printing and writing division, responsible for over 80% of newsprint. It is one of the largest manufacturers of packaging paper products, and holds over 50% market share for writing paper products. Other major companies in the division include Copamex, Smurfit Kappa, Potosi, Absormex and GCP.

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