The paper market in Egypt is witnessing a state of a sharp instability due to the increase of the demand for raw materials and the decrease of the supply. This led to an increase in the prices more than one time. As there are expectations of more increases in the coming days!
One of the main reasons of this crisis is the decrease of waste paper (dasht). It’s well known that paper industry in Egypt mostly depends on recycling the paper remains using the waste paper resulting from the used paper which is collected from cartoon companies, press, factories and refuse collectors for recycling once more. The paper industry in Egypt does not depend on the wood pulp because the forests are unavailable in Egypt. Only two or three companies import the wood pulp and add it in a low ratio beside the waste paper.
Looking for the reasons of this sudden crisis in waste paper, you can hardly find clear and logical reasons of this crisis that might be:
- Opening one of the paper factories soon; it is expected to produce 500 tons daily, and therefore needs about 650 tons of waste paper daily.
- The recession state that Egypt has been suffering from recently; this led to the decrease of consumption that led to the decrease of the supply of paper remains that can be collected for recycling once more.
- Some paper companies tried to export for dollar; and for increasing the profits due to the increase of the dollar price compared to the Egyptian pound. This led to the disappearance of waste paper from the market once more but behind a mask after changing it into a complete product.
- In addition, one of the main reasons of the paper crisis in Egypt is the increase of the dollar price; this led to the increase of the demand from the domestic paper companies and the decrease of the supply. This was because a lot of companies resorted to stop importing paper from abroad or decreasing their imported ratio. Even some big cartoon companies – that own paper factories at the same time – turned to purchase from the small paper companies and interesting the other cartoon companies in their share.
- Some paper work turned into focusing on producing high profitable brands and not producing or decreasing the rest of the other paper brands.
- Some factories turned into making big importing contracts in the domestic market with prices out of the declared prices’ list and paying cash at the same time.
No doubt that the coming days will witness more fluctuations and it is difficult to predict what is going to happen under the economic instability in the country. Moreover, it is normal that some countries grow while others – being unable to compete – will collapse.
And if this crisis is a result of opening one factory, how will it be after starting up more than one big production line -which are currently operated – during the coming two years in more than one factory?!