Market review: A sleeping giant

​When the business community talks about emerging markets, most often they are referring to Asia or South America. Could it be that the potential for large-scale growth also exists closer to home?

TEXT: IAN FENTON, PHOTO: GEORGE POPESCU / VELHOT

Anders Westerholm, Sales Director at Metsä Fibre GmbH, speaks about South-Eastern Europe with almost guarded enthusiasm, as if wary of giving away a hot betting tip. “From the perspective of a Western B2B company, sales right now in this region are on a low level, and if you look at the GDP per capita and so on, it’s relatively short of other areas.”

“But on the other hand,” he continues, “this arguably shows the future potential of that market. It’s just a question of time. In 20 years from now, things will look rather different: we’re all convinced of this.”

Westerholm isn’t alone in his prediction, and the reason we increasingly find south-eastern Europe being discussed in these terms may be its growth record in the last few years. Countries across the region are enjoying stable annual economic growth, no mean feat in the climate of slow recovery seen elsewhere, where indeed it can be seen at all.

But where is this growth coming from? In many ways, it can be attributed to the fact that several countries in the region have been granted EU membership in recent years. This sees them enjoying investments in infrastructure, and the knock-on effect is that consumption increases, slowly but steadily.

Countries in South-Eastern Europe are playing host to the rise of a new middle class

Westerholm links these events to trends in the pulp and paper industries: “Where there is a gradual increase in consumption, you also begin to see steady growth in packaging and tissue. In fact, these are the main paper grades for which demand increases in these circumstances. There is a clear link with economic development.”

Countries in south-eastern Europe are playing host to the rise of a new middle class amongst their populations, and not only are these newly affluent citizens buying products in categories previously unavailable to them, they expect the quality of these products to be as high, if not higher, than that of their counterparts elsewhere in the world.

Sustainability is another watchword in the region, particularly as the retail landscape has shifted towards large international chains taking a sizeable share of the market. Headquartered for the most part in western Europe, their sustainability and certification standards are typically applied across all their operations, meaning local paper producers are in the best position to serve them by taking careful heed of sourcing and supply chain management generally.


 

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