CBI MARKET SURVEY: THE STATIONERY, OFFICE AND SCHOOL SUPPLIES MARKET IN THE EU

2
2.1

Production
Size of production

In 2007, EU production totalled 27.5 billion, an overall increase of 8% since 2003. Italy was the country with largest production in the EU, accounting for 24,9% of EU production, followed by Germany, the United Kingdom, France and Spain. Compared to 2003, Italy, Germany, France and Spain have seen a growth in production. Only the UK has seen a total decrease, of 1.8%, between 2003 and 2007. Table 2.1 Production of stationery, office and school supplies sector in the European Union 2003-2007, million
Average annual % change (20032007)
1,9% 1,8% 1,2% -0,5% 0,3% 3,3% 0,5% 9,0% 20,0% -0,9% 5,8% 0,3% -5,3% 25,8% 2,0% 7,9% -2,8% 4,8% 21,4% 41,2% 67,7% 10,3% 4,7% 2,4% 7,6%

2003 EU-total* Italy Germany United Kingdom France Spain Netherlands Belgium Poland Denmark Portugal Finland Sweden Czech Republic Austria Hungary Ireland Greece Romania Lithuania Bulgaria Estonia Slovakia Latvia
25,536 6,397 5,042 4,195 3,477 2,012 984 529 296 514 299 323 379 121 260 141 188 127 57 28 12 43 48 35

2004
25,330 6,481 4,950 3,726 3,713 2,035 982 504 310 522 318 321 315 105 246 161 156 141 82 59 56 41 32 29

2005
24,784 6,388 4,841 4,183 2,763 2,102 1,013 506 328 491 335 304 308 124 295 148 150 131 98 71 67 38 37 43

2006
26,665 6,788 4,986 4,126 3,499 2,246 1,045 640 558 485 329 309 319 118 322 125 178 140 119 78 84 71 33 34

2007
27,584 6,875 5,292 4,118 3,520 2,293 1,002 746 613 495 374 327 305 303 282 191 168 153 125 112 92 64 58 38

Share from total EU (2007)

Slovenia 27 43 20 35 37 Source: Eurostat (2009) * Data for Luxemburg, Malta and Cyprus are not available.

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CBI MARKET SURVEY: THE STATIONERY, OFFICE AND SCHOOL SUPPLIES MARKET IN THE EU

European production of stationery is expected to remain stagnant overall in the coming future. Nevertheless, Eastern Europe and other lower-cost EU members such as Poland are to expect increase in the manufactured levels. Austria, Hungary, Ireland, Greece, Romania, Lithuania, Bulgaria, Estonia, Slovakia, Latvia and Slovenia together accounted for less than 5% of the EUs total production in 2007. However, production in most of these countries is increasing. Production statistics are discussed in more detail in the CBI sector surveys covering the market in individual EU countries. Looking forward, Western European producers will have difficulty competing with the lower unit costs of their rivals in the Far East and Eastern Europe. The cost of wages, materials, utilities, and fixed costs such as land, rent, and facilities are much higher in Western Europe than in developing countries. As a result, there is a clear trend to outsourcing to lower-cost countries, off-shoring, and direct investment in manufacturing in lower-cost countries. Production by product group Paper-based items (39%) accounted for the largest share of production by value in the EU in 2007, followed by office furniture (30%) and office and desk accessories (16%). The production figures for paper-based items, office furniture, office and desk accessories, filing products and greeting cards grew marginally during 2003-2007, whereas the other product groups saw a decline or remained static, with the largest fall in production in this period occurring in the cases and satchels product group. Table 2.2 Total EU production of stationery, office and school supplies sector by product group 2003-2007, million
Average annual % change (20032007)
2,7% 0,9%

Share of total EU 2007

2003 Paper-based items Office furniture Office and desk accessories Writing and drawing instruments Filing products Greeting cards Storage products Cases and satchels Presentation and planning materials Source: Eurostat (2009)
9,694 7,980

2004
10,135 7,882

2005
9,120 7,828

2006
10,514 7,808

2007
10,768 8,272

39,0% 30,0%

3,780

3,390

4,006

4,392

4,410

3,9%

16,0%

1,463 1,048 891 285 306

1,315 1,014 912 328 259

1,288 998 933 263 257

1,297 1,097 946 277 253

1,448 1,099 964 286 252

-0,3% 1,2% 2,0% 0,0% -4,7%

5,2% 4,0% 3,5% 1,0% 0,9%

89

95

92

82

84

-1,4%

0,3%

2.2

Trends Because of increasing competition, manufacturers are searching for ways to differentiate their products from their competitors, in order to drive growth in the mature stationery market. Product and design innovations are important means for manufacturers to extend

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CBI MARKET SURVEY: THE STATIONERY, OFFICE AND SCHOOL SUPPLIES MARKET IN THE EU

their market. For smaller manufacturers, innovation is vital because they do not benefit from the same economies-of-scale. Innovation also offers chances for manufacturers in developing countries to tap into the market with new creative designs, but may also be a threat to them if they are not creative enough. In pursuit of greater efficiency, many manufacturers moved their facilities out of Europe. Many Western European manufacturers are seeking to establish or buy manufacturing bases in low-cost countries, often in China, Taiwan and Thailand, and also closer to home, in Eastern Europe. In November 2005, BIC started its own operations in China for cost reasons. In low-cost countries, producers can combine their state-of-the-art technology with a low cost-base. In this way, they can maintain an efficient, high-quality production system but at low cost. Outsourcing was/is also a popular means for Western European manufacturers to remain competitive. Outsourcing a part of their production to cheap(er) contract producers offers the European manufacturers the chance to focus their attention on marketing their products. This migration of European manufacturers to low-cost countries has allowed local manufacturers to pick up new (production) technologies and systems. As a result, the quality of products made in these countries has increased. Note that many European manufacturers also produce private-label products. An example is the Dutch Manufacturer Lutkie Cranenburg, which is specialized in private-label products. Increasing competitiveness in other links of the supply chain has also affected the position of the stationery manufacturers. The increasing power of wholesalers, buying groups and large retailers puts them in a position to bargain for more competitive pricing. The increasing popularity of private and white-label products, often imported from low-cost countries, has undermined the position of the manufacturers. Despite the increasing competition, there are no clear signs of demarcation in the distribution chain. Manufacturers today sometimes take on the role of wholesaler, when they complement their own ranges of products with additional lines to widen their product ranges. Besides, as every link in the supply chain tries to avoid holding stock, in order to minimise their inventory risk and costs, the manufacturers are more or less forced to hold stock and take on the role of a wholesaler. Opportunities and threats Like Chinese companies, companies in other developing countries with strengths in efficiency and low cost production can take advantage of the continuing demand for low cost products. Non-labelled and non-branded products have now a bigger share of the total market, which will give exporters more opportunity to supply such products, but also will threaten them with local competition. In other words, when a certain niche becomes lucrative in a market, new-comers are easily attracted, especially when the entry requirements are low. The result is higher competition and saturated market in the long run. Still, there are countries where this niche is not saturated yet. For more information, please, refer to the CBI sector surveys covering the market in individual EU countries. The demand for better quality and, at the same time, cheaper products will further challenge DC exporters. Developing countries are a destination favoured by many Western European manufacturers for partial or complete outsourcing of their production. European manufacturers who manage to find cheaper land and labour by off-shoring their production facilities will be more competitive. As a result, DC exporters will have to compete with more robust EU manufacturers. There is also a trend of consolidation in the European market. This development is considered as a threat because consolidation leads to fewer players and more power on the buying side (higher volumes and more pressure on prices). On the other hand the consolidation trend can be an opportunity for those exporters who dare to take risks and focus on niches, specialty markets and the opportunity to exploit economies of scale. The increasing amount of production in Eastern European countries can be seen as a threat to developing countries, unless the improving living conditions and subsequent inflation in

2.3 +

+ -

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CBI MARKET SURVEY: THE STATIONERY, OFFICE AND SCHOOL SUPPLIES MARKET IN THE EU

those countries undermines their competitiveness. The developing countries exporters can defend their competitiveness by retaining lower prices and comparable quality. 2.4 Useful sources School, Home, & Office Products Association (SHOPA) - http://www.shopa.org/ EUROPE European Writing Instruments Manufacturers Association (EWIMA) http://www.ewima.org/front_content.php European envelope manufacturers association - http://www.fepe.org/ Websites of interesting players are given in the individual country surveys

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