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Manufacture of Pulp, Paper and Paper Products;
Publishing and Printing

July 2007

Photograph of some cardboard boxes

Introduction

The pulp, paper, printing and publishing industry group encompasses a wide range of activities from heavy industry upstream to downstream activities connected with services such as the publishing of magazines and daily newspapers. At the top end of the industry are the mills that through mechanical and/or chemical processes produce wood pulp, paper and paperboard from virgin pulp and/or waste paper. Subsequent processing then converts these paper and board products into a wide range of final products such as packaging in the form of paper bags, sacks, cartons, boxes, tubes, etc., newsprint, stationery, household and sanitary items, wallpaper and a host of other miscellaneous articles. Finally, the printing and publishing sectors include all activities related to the production of books, magazines, newspapers, brochures and other printed matter using a wide range of design, printing and finishing services. The sector also encompasses the reproduction of recorded media, including sound, video and computer media.

Employment

With an employee workforce in 2005 of about 9,700 people the paper, printing and publishing industry is today one of Lancashire's largest industrial sectors, accounting for one in ten (9.5%) of all local manufacturing jobs (GB=13.1%). Compared with the nation, local employment is proportionately much more concentrated in the upstream pulp/paper and conversion sectors with a lesser share in the printing and publishing activities. Men comprise 70% of the total employee workforce and 91% of all the industry's jobs are full-time (Table 1).

Bar chart showing the number of paper, printing and publishing employee jobs in each of Lancashire's local authorities - see text for details Source ONS - Annual Business Inquiry

The industry is a significant provider of local jobs in many districts (Figure 1). More than a fifth of jobs are based in Blackburn, easily the largest single centre, with another quarter shared between Preston and West Lancashire. In Blackburn and Lancaster the industry accounts for about a 16% of all local manufacturing jobs, rising to a share of nearly a quarter in Preston.

In total some 606 establishments are engaged in the industry in Lancashire and its diverse structure reflects the diversity of its products and the fragmented nature of its markets (Table 2). More than three-quarters of establishments have less than 10 employees though contribute just 15% of the industry's workforce. The largest establishments with 100 or more employees provide for nearly a half of the industry's workforce. Much of the downstream printing and publishing side of the industry comprises fairly small and often long-established family-owned businesses like small jobbing printers, media and graphics companies and the average company size is only 11 employees. The more capital intensive upstream paper production and paper products sectors however are dominated by a much larger average size of firm (41 employees) in which 55% of employees are in units employing 100 or more people. Many of these operations are in turn part of much larger national and international corporate groups.

Photograph of Sappi Europe's mill in Blackburn Source (External) www.sappi.com

Larger employers represented within the local industry include a number of well-known paper manufacturers such as Blackburn based (External) Sappi Europe and (External) St Regis Paper ; Skelmersdale based (External) SCA Hygiene and (External) Accro Papers of Blackburn specialise in the production of tissue papers. (External) Walki in Garstang and (External) TRM Packing in Ormskirk are just two examples of the many companies in Lancashire providing paper and board packaging solutions. Wallpaper manufacture is still an important local specialism, represented most notably by (External) Graham and Brown of Blackburn whilst the production of stationery products is undertaken in Preston by the (External) CCA Group and in Blackburn by (External) Chapman Envelopes and (External) Heritage Envelopes . In the printing and publishing side of the industry are included (External) Delux Global Media Services , CD mastering and replication, numerous general printing companies, including (External) Broughton Printers and the (External) Leyland Printing Company together with several newspaper publishers including the Blackpool Gazette, Blackburn Evening Telegraph and the Lancashire Evening Post.

Employment Trends

Graph showing how the number of paper, printing and publishing employee jobs in Lancashire has changed from 1950 to 2005 - see text for details Source ONS - Annual Business Inquiry

Paper, printing and publishing was a major post-war growth industry in Lancashire in which nearly 5,000 net new jobs were created between 1950-1970 (Figure 3). Subsequently, under-pinned by new investment and strong upward production trends and despite modest cyclical patterns, employment levels remained fairly stable between about 13-14,000, representing one of the best employment out-turns of any local manufacturing industry. Over more recent years however, the industry appears to have endured job reductions even more severe than those evident in manufacturing generally.

The overall employment pattern over the decade to 2005 does hide contrary trends between different sub-sectors of the industry (Table 3). The upstream pulp, paper and paperboard activities, the most concentrated and capital intensive part of the industry has been subject to some degree of rationalisation and restructuring, often involving overseas-owned companies and has steadily shed jobs, though at the same time has witnessed considerable investment. The paper and board conversion sectors too, despite some expansion over the late 1980s/early 1990s has also reduced its job count. There were modest reductions in paper & board packaging activities and in the production of other paper and board products but the losses have been particularly significant in the large local wallpaper industry which has been caught between the twin pressures of the high value of sterling impacting on many of the traditional export markets and consumer fashion trends towards paints and other decorative products. The publishing and printing sectors have generally fared much better in employment terms. A steady loss of general newspaper publishing jobs have been partly offset by gains in journal and other publishing and losses in general printing activities being offset by gains in more specialised and ancillary printing and design and finishing services and the reproduction of recorded media, particularly of sound recording.

General Characteristics

Graph showing how paper, printing and publishing turnover, purchases, gross value added and net capital expenditure in Lancashire have changed from 1994 to 2004 - see text for details Source ONS - Annual Business Inquiry

Nationally the manufacture of pulp, paper and paper products together with printing and publishing is a £44bn per annum turnover industry employing 410,000 people and generating £19bn in gross value added. The upstream sectors of pulp, paper products and conversion account for about 26% of this turnover; publishing 46%; printing and related activities 28%; and the reproduction of recorded media 1%.

Today, general printing services followed by paper and paperboard production, newspaper publishing, wallcoverings and paper and board packaging are the largest sectors represented in Lancashire, together with a modest presence in household and sanitary, etc paper, paper stationery and journal publishing. There is also a small but expanding digital media sector. Despite the recent fall in the fortunes of the wallpaper industry in terms of both value and volume, the sub-region retains a major national presence in this activity, still accounting for a half of the sector's jobs in the whole of GB, with Blackburn retaining its status as the traditional centre of the wallcoverings industry.

In production terms the paper, printing and publishing industry has been a reasonably strong performer in Lancashire though its out-turn has moderated over recent years. Over the five-year period 2000-2004 it achieved average annual turnover of just under £1bn per annum (but dropping to £980m in the latest year) and gross value added of about £390m per annum, equivalent to 8% of total local manufacturing production (Figure 4). In terms of such output it ranks as the fourth largest industrial grouping in Lancashire behind Transport Equipment, Food & Beverages and Fabricated Metal Products. Long-term growth in output (GVA) in the Lancashire Paper, Printing & Publishing industry has been impressive and was particularly strong over the 1980s though the rate of change over the past decade (1994-2004) has been minimal in real terms and well below that achieved in the UK where it remained amongst the most buoyant of industries. Labour productivity growth too has eased though the local industry still achieved growth in GVA per head of more than 25% over the decade, exceeding that of the national sector. It remains the case, however, that the local productivity level still tends to trail that of the UK industry with a "productivity gap" in the order of twenty percentage points. This largely reflects a structural bias towards the heavier end of the industry and a lesser representation in the higher value printing and publishing sectors. Partly also reflecting this structural characteristic, investment, albeit slowing towards the end of the period, has been strong. This has included the establishment of new capacity as well as expenditure aimed at improving the environmental friendliness/energy effectiveness of production methods, including recycling technologies, and in information technologies generally. Over the past few years net capital expenditure per head in the Lancashire industry has fallen below that in the UK.

Map showing how pulp, paper, paper products and printing establishments are distributed over Lancashire - see text for details Source Annual Business Inquiry, 2005

Overall demand for paper and paper products is strongly related to general economic growth and domestic demand. Stationery and packaging products are principal supplies to the service sectors (offices, transport and distribution) and as such they directly reflect activity in these activities. The demand for printed products themselves are further related to disposable personal income and advertising expenditure.

Over the past couple of decades the industry has undergone major restructuring and forward integration as part of an international tendency entailing a wave of acquisitions, joint ventures and mergers to achieve economies of scale and to build market shares, particularly in the manufacture and conversion of paper and board. This part of the industry is resource and capital intensive in terms of plant and equipment, has relatively long lead times and is thus more cyclical in nature. It is today operating in a relatively mature market and subject to growing domestic and international competition and threats from competitive materials. The printing and publishing end of the business too is becoming ever more competitive, not only from cost pressures from Eastern Europe, India and China but also from being constantly challenged to respond to rapidly changing markets and fast developing digital technologies which are both raising and changing skill requirements, requiring continuing investment in training and development. As well as enhancing capabilities and automating many printing processes that were once done by hand, technological change is also increasing capacity, leading to pressures towards consolidation, cost cutting and out-sourcing. Customer demands for shorter runs and faster cycle times together with competition from substitute media much as the Internet and CD-ROMs are further impacting on the sector as are increasing energy costs and environmental constraints.

This page was compiled by Peter Kivell .

All enquiries from the media should be sent to Corporate.Communications@lancashire.gov.uk .

Any other questions about the content of this page may be sent to EconInfo@lancashire.gov.uk .

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