A shortage of waste paper is the main threat to the development of the industry

13 march 2017

"The entire world is trying to enter the fourth industrial revolution, the so-called Industry 4.0, but in reality this depends on every industry and on every state separately, on the work that people and companies are doing," said Deputy Head of the Analytical Center Yuri Urlichich opening a round table on the Arranging and Development of the Collection and Processing of Waste Paper: Challenges and Solutions, Entering Industry 4.0."

During the event the experts considered proposals for the Draft Strategy for the Development of the Forest Industry in Russia through 2030 with regards to forest management and proposals for the Draft Strategy for the Development of Industrial and Domestic Waste Processing, Disposal and Decontamination Industries through 2030. The specialists also discussed the current state of the collection and processing of waste paper, the upgrading of the Russian national product classification lists OKVED and OKPD, and state support measures in the industry.

Maxim Novikov, CEO of the League of Waste Paper Processing Companies, talked about the evolution of waste paper collection and processing. The expert noted that prior to the dissolution of the USSR the pulp and paper industry in the country was developing in pretty much the same way as in the rest of the world, but after the USSR fell apart, the process stalled. "In 2000-2017, the volumes of corrugated packaging production in Russia increased almost fivefold, while the share of cartons made from waste paper went up from 10% to 65%," the expert said. "Corrugated packaging production is the main consumer of processed waste paper: waste paper packaging cartons." At the moment Russian waste paper processing companies are following the global trends and are hard at work expanding their capacity, Mr. Novikov noted. However, at the moment not enough waste paper is being collected to meet the demands of Russian waste paper processing companies for raw materials.

That is the main problem the industry is facing today, according to the AO SOEMZ CEO Denis Kondratyev. "The shortage of waste paper and, consequently, high prices for it are the main threat to the industry," the expert is convinced. He believes that one way to deal with the shortage of waste paper in Russia is to introduce a more detailed classification for waste paper into the national product classification lists OKVED and OKPD; another thing that could help is if appropriate amendments were made to Federal Law No 458-FZ on Industrial and Domestic Waste

Mr. Novikov also suggests other ways to solve the problem: The VAT on the sale of waste paper could be canceled as well as personal income tax on collected waste paper that people sell to companies, plus additional technical regulations could help.

During the discussion the experts also talked about the geopolitical aspects of the waste paper collection and processing industry and ways to encourage growth in the sector.