Mr. Alfredo Theodoro
Rua Vitor Cordon, 1-4.°Esq.
P-1200-482  LISBOA


Papermerchanting in Portugal in 2012

Economic situation

Portugal faces a deep recession, with a strong reduction on internal consumption and with unemployment growing every month.


During the year of 2011, Portugal negotiated a bail-out, and since there the government was not able to take measures to recover the economic growth.


At the end of 2012, GDP was negative by 3,6%, inflation was 2,8% and the unemployment rate reached the 16,9 %, the highest value of the last 25 years.


Government is committed with the international institutions that granted the loan of €80bn, so called "Troyka" (IMF, ECB, EEC), to reduce the public deficit, and all measures are with that purpose, that lead the economy to recessive spiral.


The consumption of general goods, excluding food and  oil (Gas, fuel, etc), reduce in average, 9,2% and 14,5% comparing December 12 to 11.

As consequence general Industrial capacity has just 70% of utilization, with a decline on the added value generated. Export activity being slightly better than internal consumption, is also affected by the poor shape of the main destination markets, mainly Spain, where the picture is not different. The crisis at Euro Zone, is delaying and compromising the result of the huge austerity measures in place and growing social contestation do not allow additional actions on taxes side.

Printing business



On such economic environment printing industry faced all different sort of difficulties. As predicted by Printers Association, APIGRAF, 2012 was worst than 2011:


-Lack of orders for the existing capacity

-High costs of financing

-DSO growing due to collecting difficulties

-Big and medium companies facing insolvency processes.


Relevant is the fact that on important market segments, like web commercial printing, the closure of two big printers (PeresSoctip, Mirandela) and the pre-insolvency of a 3rd one, obliged the final customers (catalogues, Editors) to transfer some  jobs to other markets, mainly for reliability reasons than capacity shortage, affecting all the players in the market, in our special case, the paper merchants.


Merchanting business


Since 2008 the Merchants market reduced more than 33%!!!!


After a decline of 14, 7% in 2011, the year of 2012 add more 17% reduction, reinforcing the trend.


Main product lines like CWF and UWF, have better  figures with "only" less 14,3% and 11,2% respectively, which makes niche and speciality products in a worst position.


On price side, 2012 registered a small general decline faces the end of 2011, despite all the attempts of the paper mills to implement price increases in June. The general lack of demand, increased by the seasonal summer reduction on consumption, reverted the situation in three months. At the end of the year, average price was 1,4% below than in December 2011.


Also the general restrictions on Credit insurance impose to the Merchants a strict credit control policies, not always understood by customers.


If we have to find a positive sign on such grey situation, we would say that the consequence is a natural depurating process on customer side, erasing weak players, and granting that the survivors will be stronger after crisis, whenever it happens.


For the future we believe that all the reported threats over Portuguese market, will concentrate the paper trading business on the existing main merchants, once just organised and solid financing structures will be able to survive, and give to the suppliers confidence to represent their products, and leverage from a very strong knowledge of the customers and the market.