Abstract

Purpose – European paper industry has been struggling with margins and profitability for more

than decade time period. At typical in markets of west, paper product demand is at long-term decline,

mostly driven by continuously increasing internet use. However, in emerging markets demand still

exists, and in Europe numerous small markets in east have even some growth available. The paper

aims to discuss these issues.

Design/methodology/approach – The authors analyse in this research work with longitudinal

data (period of 2002-2009) from one large Finnish paper mill and data envelopment analysis (DEA)

approach, how distribution efficiency to selected eight East European markets has evolved.

Findings – In general distribution efficiency has improved, but this has taken place in step-wise

manner rather than being linear year-to-year development (year 2006 found to be the threshold).

Reason is mostly in better management of transportation costs, and in particular lower monthly

deviation of these costs. It is surprising that case paper mill has been able to manage transportation

costs in rapidly increasing energy cost environment so efficiently. Maybe European Union enlargement

of 2004 and 2007 has had its effects on distribution efficiency.

Research limitations/implications – The research is limited to the deliveries of one paper mill

located in Finland. Also East European markets in the early periods of this study were emerging

papers markets, and distribution practices were clearly evolving.

Practical implications – Based on the study East European paper market distribution should give

more attention on transportation cost control, and trying to find solutions to minimize it with low

monthly fluctuation.

Originality/value – Very few studies exist from East European distribution issues, and particularly

that of paper industry. Also used quantitative method of DEA is relatively new in this context and

gives valuable insights for the distribution efficiency development.

Keywords Data envelopment analysis (DEA), Emerging markets, Distribution, East Europe,

Paper mill

Paper type Case study