The paper sector faced a bittersweet moment at the end of last year when it briefly surpassed 2019 turnover despite the lingering disruptions from the covid years. Yet that glow quickly faded. Inflation, intensified by the Ukraine conflict, pushed costs up sharply as energy and raw materials climbed. With overheads soaring, the recovery pace slowed, and in Alicante, where many firms lean on the hospitality sector, sales declined with autumn approaching.
National production in the industry rose 6.5 percent last year after a 2020 downturn, reaching 6.7 million tons of paper and 1.8 million tons of pulp, helping output exceed pre-pandemic levels. Turnover climbed about 30.84 percent, totaling 5,209 million euros. Valencia’s Community, which accounts for 3.5 percent of national production, reflected these pressures and gains within a broader European market.
Things deteriorated in 2022 amid the Russian invasion of Ukraine and a broad rise in prices. The Spanish Association of Pulp, Paper and Board Producers (Aspapel) noted that nearly all factories remained open despite the tough climate, underscoring the sector’s role as a resilient backbone through the health crisis. The ongoing surge in energy and raw material costs, along with freight, kept demand uncertain and the pace of recovery slow.
In Alicante, the cost pain touched many firms, with some reporting more than a 200 percent increase in expenses. The Hinojosa group, which owns Papelera de la Alquería in l’Alqueria d’Asnar, stands out for its cardboard production. The company points to higher gas and electricity costs as a major constraint. Yet investments in sustainable energy and waste recovery over recent years have helped maintain operations and service levels, even as volatility complicates management and squeezes margins along the value chain.
The Saica group, also based in Alicante, paused three of its four cogeneration plants due to rising gas prices in Zaragoza. The management team welcomed a government decision to apply the Iberian exemption, viewing it as a chance to reopen factories and regain lost competitiveness.
A large portion of Alicante’s paper industry serves the hospitality sector. The recent summer boosted the appeal of bars and restaurants, but the outlook after that season is markedly different. Belén González, Mapelor’s manager in Beniarrés, described a post-pandemic landscape where consumers focus on leisure, projecting a turnover rise to around 12.5 million after a year that reached 8.5 million. Yet rapid cost increases distort the picture; executives note finished products rising 60 to 70 percent while energy and raw materials multiply in price.
The trend is not isolated to packaging alone. Mapelor’s chairman warned of an impending downturn in activity for the hotel industry, predicting softer demand and a shift away from ancillary items such as table linens as hospitality venues cut back on purchases to manage higher costs. The response is a tighter margin discipline across the value chain.
Practicel from Gaianes reports a parallel scenario. The firm closed a robust summer with year-end invoices around 20 million euros, but manager Manuel Orero warned that rising prices were eroding margins. He cited shortages in gas, electricity, and supplies from South America and Asia as headwinds, though demand has remained relatively solid in recent months, preventing a full squeeze of the business.
Despite the pressure, Orero stays cautiously optimistic, noting that a resilient customer base helps. Inflation is expected to bite consumption and lift costs further, but the company has already passed some increases onto customers, arguing that in a competitive marketplace, failing to adjust would threaten survival.
Rising costs ripple through publishing too. The paper shortage and price hikes affect publishers who fear sales slumps if prices remain high. Ediciones Azorín, which focuses on authors from Alicante and Murcia, reports a 30 percent rise in production costs and cautions that readers may pause purchases when a must-have product becomes more expensive. The company explains that in the poetry genre, where broad appeal is limited, writers and publishers must avoid adding risk. Energy and raw materials are cited as the main culprits behind higher paper prices. Yet editors point out that the shift away from plastic bags has increased demand in other areas, creating a mixed dynamic. Some publishers face tough choices, and a few have already halted operations, prompting leaders to consider long-term strategies with care to avoid sudden closures.
In this climate, the paper industry shows both resilience and vulnerability. The sector remains integral to printing and packaging, with many firms continuing to adapt through efficiency measures and strategic investments while navigating price volatility and a shifting demand landscape. The coming months will reveal how these companies balance cost pressures with the need to service clients and maintain stability across the supply chain.
Note: The narrative reflects industry-wide discussions and company statements cited for context and attribution within industry reports and statements from sector associations. All figures are representative and subject to revision as new data becomes available.