Fines of hundreds of billions of won per company threaten cash flow and capital

Print paper market shrinking 3% a year — and the pace may quicken

Shift to paper-based materials proves elusive, demand creation lags

A printing paper production line at a paper company. [Industry]
A printing paper production line at a paper company. [Industry]

South Korea's printing paper companies are struggling with the fallout from a price-fixing case.

Pressure to pivot or diversify is mounting by the day, yet antitrust fines threaten to worsen their cash flow. The fines are recorded as non-operating expenses, reducing net profit. After payment, they also raise the corporate tax base, potentially triggering a double drain on cash.

Printing paper output tells the story plainly: production fell from 2.92 million metric tons in 2015 to 2.08 million metric tons in 2025 — a decline of 28.65 percent, or 836,569 metric tons, over a decade. Output has been shrinking at roughly 3 percent a year on average, and the outlook is bleak. Domestic consumption, excluding exports, dropped even more sharply over the same period, falling from 1.67 million metric tons to 1.12 million metric tons — a 32.73 percent decline.

Packaging grades have also disappointed. Output of white-lined chipboard — used for product packaging — slipped 6.72 percent over the decade, from 1.52 million metric tons to 1.42 million metric tons. Corrugated board, buoyed by the parcel-delivery boom, was the lone bright spot, rising 20.66 percent from 4.68 million metric tons to 5.64 million metric tons. Export volumes for both grades moved in similarly modest directions.

The paper industry as a whole is contracting. In Boston Consulting Group matrix terms, it sits squarely in the "dog" quadrant. For some paper grades, the low-growth reality means companies must now weigh restructuring options — scaling back or exiting altogether.

Business transformation and diversification are urgently needed, yet the fines are weighing heavily on the industry. With capital capacity set to shrink, pursuing new ventures has become significantly harder.

Particularly concerning is the lack of meaningful progress in converting paper into higher-value industrial materials — an effort the industry has pursued for more than two decades. Demand creation for paper as a plastic-packaging substitute or industrial input has so far generated only hundreds of millions to tens of billions of won in sales per company. Given the climate crisis and the supply chain disruptions brought on by the war in the Middle East, the absence of stronger government support is also being felt.

South Korea's Korea Fair Trade Commission imposed a combined 338.3 billion won ($253 million) in price-fixing fines on six companies in April — Hansol Paper, Hankuk Paper MFG, Moorim Paper, Moorim P&P, Moorim SP and Hongwon Paper. Alongside the fines, the commission ordered the companies to roll back prices to pre-cartel levels. The printing paper market was already suffering from weakening profitability due to falling demand; the fines and a backlash from the printing and publishing industry have compounded the pressure.

In June, the commission partially reduced the penalties, cutting the total to 143.9 billion won. Hansol Paper had its entire fine of 142.6 billion won waived. Moorim P&P and Moorim Paper saw their fines reduced to 57.4 billion won and 28.6 billion won from 91.9 billion won and 45.8 billion won, respectively. Hankuk Paper MFG, fined 49 billion won, and Hongwon Paper, fined 8.5 billion won, are pursuing legal remedies.

Moorim P&P, Moorim Paper and Hankuk Paper MFG have filed administrative lawsuits at the Seoul High Court seeking cancellation of the penalties. Depending on the outcome, the fines could be reduced or overturned entirely.

"Building up retained earnings to strengthen capital capacity is urgently needed for any business pivot or diversification," an industry official said. "The fines are disproportionate to our scale and will severely damage our bottom line — it's a very difficult situation on multiple fronts."

Key indicators for the printing paper industry (source: Korea Paper Manufacturers Association, October 2026): output fell 28.65 percent over the decade from 2015 to 2025; domestic consumption dropped 32.73 percent over the same period; exports declined 8.03 percent; and the Fair Trade Commission imposed 143.9 billion won in price-fixing fines, with legal proceedings ongoing.


freiheit@heraldcorp.com