The South African paper recycling industry is facing a critical shortage of various grades of waste paper, in particular pre-consumer (K3) and post-consumer (K4) brown/kraft cardboard. The Paper Manufacturers Association of South Africa (PAMSA) believes that this trend will continue, putting further pressure on domestic paper mills in the run up to annual year-end shuts.

“The K3 and K4 paper grades are used in the production of paper packaging such as corrugated cases for the export market and transit of domestic goods,” explains Jane Molony, executive director of PAMSA. With the citrus season now complete and less cardboard boxes in circulation, there is less available to recover.

On average, 1.2 million tonnes of waste paper are recovered in South Africa annually, with more than 90% of this being locally recycled into new paper, packaging, and tissue.

Demand exceeding supply

The disruption of Covid-19 on supply chains also has direct effects on the consumption, demand, and recovery of paper products. “With offices and schools remaining closed or on rotation during 2020 and early 2021, there was less paper to collect,” says Molony, adding that there is a rising demand for paper packaging with the move to online shopping and to a more environmentally responsible form of packaging.

Along with the disruptions to major international shipping routes, the continued reduction in stock levels is driven by a significant appreciation in export prices of waste paper. As a result, waste paper traders are favouring the export market.

According to Molony, a paper mill using recovered waste paper requires 21 days of waste paper stock per grade for optimal operations. Prior to the Covid-19 pandemic, paper mills could hold adequate stock levels of kraft, mixed and office paper for at least 30 days.

More recently, domestic mills have had to consume more of their stock levels, resulting in an average 63% deterioration of stock levels from 36 days to 13 days.

Local paper industry cannot compete with export prices

Exporters of locally recovered waste paper supply large foreign buyers. “Some of these buyers exceed the size of the combined South African paper industry, and can afford to pay significantly higher prices for waste paper than our local manufacturers,” says Molony.

PAMSA’s members have invested billions of rands into the recycling value chain and are the primary source of demand for recovered waste paper.

These companies collectively employ around 16 300 people while also supporting a thriving network of informal waste collectors and small recycling enterprises.

Molony notes, “The International Trade Administration Commission (ITAC) is working closely with all players in the sector to ensure that export permits are well managed.

Waste paper constitutes a significant portion of raw material for some 80% of local paper manufacturers who produce packaging paper and tissue.

Paper mills obtain wastepaper from a variety of sources:

• Industry-led activities through the collection and purchase of pre- and post-consumer recyclable paper.
• Various paper pick-up programmes including commercial, kerbside, school, church, community, housing complex and office programmes.
• Independent third-party recyclable material traders.

Paper packaging – such as cardboard boxes – makes up a large portion of the paper collected for recycling at 77%. Around 40% of office paper is collected; it is often archived, and many homes, businesses and schools are not conscientious with waste separation.

Molony appeals to all businesses and households to separate their paper and paper packaging from general waste. “You can simply leave the items in a box or bag next to your bin for your local informal recycling collectors.”

Used office paper, cereal boxes, brown cardboard boxes, milk and juice cartons and even egg boxes are just some of the paper items that collectors will take to buy-back centres.