(Apr. 11, 2007, C.F.I. Shanghai) Organized by C.F. I. Consulting Ltd. and China Forest & Paper Executive Club (CFPEC), and sponsored by APP, Chenming Paper, CITTC, Hunan Tiger Forest & Paper, STORA ENSO, Sun Paper, Guangxi Houda Pulp & Paper and the industry magazine of "Forest & Paper Panorama" China Pulp & Recycled Fiber Conference 2007 dropped the curtain on Mar. 23 in Sanya, a beautiful seaside city in Hainan Province. Since CFI’s first session of China Market Pulp Conference 2006 has been considered as a great success, recycled paper was added this year, which was welcomed by all the delegates. Pulp suppliers, agents, distributors from Russia, North America, South America, Europe and Asia, as well as paper-making enterprises and related industry groups were attracted and 240 odds delegates attended the conference.
With the continuous rapid growth of China’s economy, the output and consumption of paper and board also increase greatly. According to National Bureau of Statistics, China’s paper output and consumption hit a record high of 68 million tons and 68.7 million tons respectively in 2006, which both ranked the second in the world. Meanwhile, China’s demand for paper-making fiber materials increased sharply. About 7.96 million tons of wood pulp and 19.62 million tons of recovered paper were imported in 2006, which also hit a new record high. And China remained its leading position as an import country. China paper industry’s huge demand for fiber materials has become an important part of international market pulp & recycled paper trade, and its influence on the international pulp and recycled paper market also increased day by day. International pulp suppliers, agents expected that they can understand China’s pulp & paper industry better as well as the development trend of China market. In the meantime, since the prices for both pulp and recycled paper kept increasing in 2006, the production cost of most China’s paper enterprises raised sharply. The development of the international market was deeply concerned by Chinese enterprises and pulp distributors. CFI’s conference provided a venue for all pulp and recycled fiber players to communicate and exchange information, hence it was warmly welcomed by industry insiders.
Mr. James Li, the General Manager of C.F. I , chaired the one day and half meeting. And Mr. Wang Xiang, Chairman of Hunan Tiger Forest & Paper Group Co., Ltd, delivered welcome speech on behalf of the organizer and announced the opening of the conference.
17 keynote speakers, representing the main market pulp producers, recycled paper suppliers, users and traders, and senior economists and analysts, delivered their analysis and comments on the fiber issues.The topics range from China’s microeconomic trend, supply and demand of international pulp market, the trend of recycled paper supply in North America, Europe and Japan, what roles will Chinese pulp traders play in the future as well as the influence of China’s pulp and paper industry development upon international pulp market. Furthermore, the speakers also answered the questions raised by the attendees.
The rapid development of China’s economy is still the hot topic for all the delegates. According to National Bureau of Statistics, China’s GDP growth rate has amounted to 10.7% in 2006, then whether China economy will remain its high growth in 2007? Mr. Fan Jianping, Director of the State Information Centre, answered this question. According to Mr. Fan, the Chinese Central Party Committee (CCPC) and the State Council adopted a series of macro-economic control policies and measures in 2006 in a timely manner to target the outstanding problems, which emerged in economic development. And the national economy maintained the momentum of "comparatively fast growth, better economic returns, lower inflation and more benefits to the people". But there are still problems in economic operation. For instance, growth rate of investment in fixed assets is still on the high level, possibility of investment rebound remains, loose situation of currency mobility caused by unbalance of income & expenses remain unchanged, and extensive management and blindly expansion continued to put more pressures on energy consumption and environment protection etc. China will insist on steady fiscal policy and monetary policy, persist in restraining investment from growing too fast, stress on adjusting payment of balance to control the source of fund causing overheated economy in 2007. Mr. Fan held the view that China’s economy will keep its high growth in 2007 and beyond driven by the factors of Olympic Games and the World Expo.
Concerning the development trend of pulp & paper industry in 2007, Mr. Henrik Gistren, General Manager of Aracruz Asia, and Mr. Willie Mullins, Commercial Director of CMPC Celulosa, both expounded their opinions on newly-added capacity in South America, structure changes of pulp demand, the role of South America in the future pulp market and its pulping advantages respectively. They also expressed that a country should be engaged in business which is more advantageous than other country. For example, China is dealing with paper and board, while South America is dealing with pulp.
Mr. Jason Coss, the Vice-President for sales of Tembec, a Canadian pulp giant, said that market pulp producers in North America are still facing difficulties. The costs of raw materials and energy keep increasing, the situation of Canadian dollar appreciation will not be reversed in a short time, and some 900,000 tons of capacity has been closed in Canada in 2006. He held the view that more capacity would be shut down in North America if pulp prices can’t stay in its high numbers. Moreover, with the closure of more pulp mills, the importance of Canadian suppliers to China market may decrease gradually.
Mr. Wang Baoliang, the Vice President of Shandong Chenming Paper, which is one of the leading enterprises in China’s pulp and paper industry, expounded on the problem of raw materials, implementation of base construction of raw material forest, as well as the difficulties domestic enterprises met during the establishment of paper recovery system. In addition, he also revealed the scheme and work in progress about Chenming’s 700,000t/y pulp project in Zhanjiang, Guangdong Province.
Since more and more foreign pulp suppliers tend to establish their representative offices in China, what roles will China’s traders play in the future and how to find out a suitable way for traders are concerned by many delegates, especially those local pulp distributors. Mr. John Zhang, the Vice President of CITTC, which is one of the largest pulp distributors in China, held the view that pulp resources will be limited in traditional pulp supply regions like North America and Europe etc., where pulp exports will not see increase and even decline to some extent. And certain potential capacities are set to release in Russia and Latin America, so traders should focus on the regions like Russia and South America. Moreover, the traders should further develop other pulp grades besides grasping the wood pulp resources. The tragated customers for traders should be those small- and medium-scale paper mills, and the traders should strengthen their services. Meanwhile, the traders should provide help to large-scale paper mills if necessary.
Regarding the recovered paper issues, Mr. William A. Nielson , Former Chairman of Paper Stock Institute of America, Mr. Ron van den Akker, MD CellMark Recycling Benelux, Mr.Tony Denny from U.K. Fiber Trading of Harmon International, Mr.Tetsuji Horikawa, President of Paper Recycling Promotion Center under Japan Paper Association and Mr. Yoshiaki Takashima, Board Director of Procurement of Rengo Co., Ltd. Japan expressed their opinions respectively. According to Mr. Tony Denny, the growth of European recovery rate will slow down while China’s demand for recovered paper will keep tight. Since the recovered paper price will continuously increase because of the imbalance between supply and demand, China’s enterprises should be ready for it. In addition, some 20 million tons of recovered paper were imported in China in 2006 and the prices for both pulp and recovered paper are increasing, so it is necessary for the Chinese enterprises to ponder how to develop themselves.
Pulp & paper industry in China has for time been considered as an industry with severe environmental pollution, high energy-consumption as well as a resource-consumed. Whenever people talk about paper-making, they have pollution in mind first. How to get rid of this bad impression and realize the sustainable development of pulp and paper industry, environment and resource are the aims for China’s pulp and paper industry insiders. Ms. Ann Wrobleski, Vice President of Public Affairs of IP, introduced IP’s successful experiences on achieving business development in a socially responsible way, which was highly appreciated by conference delegates. Moreover, Mr. Moacyr Fantini, Director of Wood Production of Stora Enso Guangxi Co., mainly introduced successful experiences on Eucalyptus plantation in Guangxi Province, which will guide the enterprises implementing strategy of forest-paper integration.
Mr. Roger Wright, Managing Director of Hawkins Wright Ltd., who is also an famous market researcher, and Mr. Xu Weidong, Chairman of C.F.I. Consulting Ltd., a leading consulting company in China’s pulp and paper circle, all delivered speeches at the conference. From the viewpoint of a third party, they talked about the development of global and China’s pulp and paper industry in the next few years. Mr. Roger Wright held the view that the paper production and consumption of the world is transferring from the West to the East, while the production of fiber material is transferring from the North to the South. Furthermore, since the capacity expansion of market pulp starting from 2006 is mainly focused on hardwood pulp, BHKP market may decline at the end of 2007 or at the beginning of 2008. According to Mr Xu Weidong, most paper grades in China market have faced over-supply and prices have dropped by a big margin, however, the prices for fiber materials and affiliated materials continued to increase. Therefore, the profitability of Chinese enterprises is decreasing sharply in recent years. Enterprises should carry out the forest-pulp-paper integration program if possible, on the other hand, they should take more approaches on establishing local paper recovery system, strengthening management on product differential strategy as well as cost controlling.
The painstaking and considerate organization work, high-quality speeches and humanity service are highly appreciated by people who ever attended.
About CFI & CFPEC
Established in July 2001, C.F.I. Consulting Ltd. is the only Chinese consulting company focusing its business on forest, pulp and paper industry. C.F.I. has provided hundreds of quality services to domestic and foreign clients since then. China Forest & Paper Executive Club (CFPEC) is a non-governmental organization that initiated by celebrated entrepreneurs of pulp, paper and related businesses incorporated in China. Launched in March 2002, CFPEC has grown to 44 members now. Working as the bridge to facilitate communication among the paper industry and related government departments, CFPEC is also an important link between domestic forest & paper corporations and those counterparts outside China.
For more information, please contact CFI at pulp@chinaforestpaper.com
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