Paper Industry Smiles at Export Growth in First Half, Optimistic for Second Half

Improved First Half Performance Due to Strong Exports
Major Election Events in Second Half... Strong Performance Expected This Year

The domestic paper industry improved its performance in the first half of the year thanks to strong export growth. With major election events, such as the US presidential election in the second half, acting as favorable factors for paper companies, a strong performance is expected throughout the year.

According to the industry on the 27th, Hansol Paper and Murim (Murim Paper and Murim P&P) saw their operating profits significantly improve by double digits compared to the same period last year, influenced by increased exports in the first half.

Specifically, Murim P&P’s operating profit in the first half of this year was 32.7 billion KRW, a 47.6% increase compared to the same period last year. Murim Paper recorded an operating profit of 27.8 billion KRW during the same period, showing a remarkable 242.6% improvement from last year. Hansol Paper also posted better results, with an operating profit of 39 billion KRW in the first half, up 70% from last year.

The improvement in first-half performance is largely due to increased exports centered on the North American region and the continued strength of the dollar against the Korean won.

Looking at the sales performance of Murim Paper and Murim P&P’s paper divisions, total exports of products such as white paper and art paper in the first half reached 302 billion KRW, an increase of 18.6 billion KRW from 283.4 billion KRW in the same period last year. In particular, Murim P&P, the only domestic producer of pulp, the raw material for paper, recorded pulp exports of 35.9 billion KRW in the first half of this year, surpassing last year’s total pulp exports of 35.6 billion KRW.

Hansol Paper recorded total export sales of 583.7 billion KRW in the first half of this year, about a 12.3% increase from 519.5 billion KRW in the same period last year. The export ratio in total sales also increased. The export ratio was 50.8% in the first half of last year, but rose to 55.2% in the first half of this year.

The paper industry expects to maintain solid performance in the second half as well. This is because election events, such as the US presidential election, act as favorable factors for paper companies. These events can lead to special demand for printing paper used in various promotional materials, including ballots. Additionally, the recent decline in pulp prices in the second half, after an upward trend earlier this year, is also positive.

Furthermore, despite the US Federal Reserve’s (Fed) “big cut” (a 50 basis point cut in the benchmark interest rate, where 1 bp = 0.01 percentage points) at the September Federal Open Market Committee (FOMC) meeting, the strong dollar trend has been maintained, which is also positive. Initially, it was expected that the won-dollar exchange rate would drop significantly following the rate cut, but the exchange rate has remained around 1,330 KRW.

An industry official said, “Exports continue to grow mainly in advanced countries such as North America, and efforts to diversify export regions through new market development are ongoing. We expect to maintain solid performance in the second half as well.”