The French pulp and paper industry continues to suffer from a series of European currency devaluations that have undercut its position in export markets, but industry officials say the business has entered into a cyclical upswing.
The country's pulp and paper trade organization, the Confederation Francaise de L'Industrie des Papiers, Cartons & Celluloses (Copacel), said this week that after three years of crisis French production grew by almost 8 percent last year, to 8.6 billion tons.Jean-Paul Franiatte, director of the organization, said this helped keep losses in 1994 for French companies to 1.5 billion ($283 million) French francs, compared with 4.2 billion francs ($792 million) the year before. He said that after bottoming out, prices began rising last year with the reference pulp costing $390 per ton in September 1993,and $700 per ton by the end of last year.
"The period 1990-93 was the worst crisis in history for us," he said. ''Last year, we rebounded."
Almost half of the pulp and paper products consumed in France is imported. Last year, imports grew by 13 percent, compared with 1993. But exports from French companies also grew by 15 percent, to 3.7 billion tons. The increase was mainly due to higher exports of French newsprint and corrugated paper to southeast Asia.
The pulp and paper industry tends to be extremely cyclical, reflecting general economic conditions. France's 33 billion ($6.2 billion) industry is ranked fourth or fifth in the world depending on product category. The U.S., Japanese and German industries are all larger.
According to Mr. Franiatte, French competitiveness has been badly hurt by currency devaluations of up to 30 percent in Sweden and Finland and lesser ones in Britain, Spain and Italy over the past year and a half.
Under pressure from Copacel, the French government last year pressed the European Union Commission to take measures to protect France's paper industry
from five types of paper exported by Sweden and Finland.
Under bilateral agreements, which were in effect last year before the two countries joined the European Union, paper was not subject to tariffs. In the end, Nordic imports were merely carefully scrutinized by France.
Copacel says that currency devaluations pushed up sales by foreign industries 47 percent for Finland, 27 percent by Sweden, 26 percent for Italy and 16 percent for Britain.
"Scandinavian industry is beginning to talk about investment so it is clear that they used the devaluations as a competitive weapon," said Christian Sibille, vice-president of Copacel.
Mr. Franiatte said not only did Nordic exports gain market share in France, but they also drove prices down and French losses up. He admits nothing can be done now that Sweden and Finland are part of the EU.
"This is one of the reasons why French companies are trying to boost productivity," he said.
The biggest problem for French industry in 1995 is expected to be a shortage in supply of wood as raw material. Demand has increased worldwide and so has its price. Mr. Sibille said French factories are not turning at maximum capacity because of supply problems.
Another problem, officials say, will be to boost recycling of paper in France. While demand for recycled paper grew last year, the rate of recycling across the country actually decreased, pushing producers to rely more heavily on imports.
''We need real political will to organize recycling and get people away
from a long tradition of incineration," said Marc Henriot, head of a recycled paper trade organization.