The hottest new development trend of pulp and pape

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New development trend of China's pulp and paper industry

after experiencing the high-speed growth of paper consumption in the 1990s, China has achieved a soft landing with economic development, especially the market in the eastern developed regions is becoming more and more mature. Then, after entering 2000, the growth of paper consumption slowed down. Industry insiders pointed out that before the formation of new consumption hot spots, the demand for paper and paperboard will enter a moderate and stable growth stage. Foreign investors should fully consider the possible changes and impacts when expanding production scale or choosing investment projects and entry methods

from 1990 to 1999, the consumption of paper and paperboard in China soared from 14.43 million tons to 35.2 million tons, with an average annual increase of more than 10%; In 2000, due to the strong international raw material prices and other factors, the demand increased by only 550000 tons that year; In 2001, although the price of wood pulp fell sharply, the consumption of paper and paperboard in the domestic market showed a trend of first high and then low, with an increase of only 3% over the previous year, an increase of about 1.08 million tons. According to the prediction of relevant parties, China's economic growth rate will remain at about 7% this year. Relevant people believe that at present, there is no obvious sign that new consumption hot spots will be formed soon, which indicates that domestic paper and paperboard consumption has begun to enter the adjustment stage of steady growth

the growth of consumption demand for paper and paperboard in China will further concentrate on some high-end products

the top varieties of annual consumption growth are: pullout board coated with white connecting parts (42%), high-strength corrugated paper (30%), Kraft Liner Board (20%), coated paper (19%) and household paper (15%)

from the situation of last year, the consumption increased significantly: coated white board (15%), high-strength corrugated base paper (14%), paper (13%), kraft linerboard (9%), household paper (7%). Among them, the most prominent is high-strength corrugated base paper. At present, there is not only a demand gap of 1.15 million tons, but also the growth of consumption is faster than the increase of output

according to customs statistics, after the tariff reduction this year, the import volume of corrugated base paper surged by more than 34% in the first quarter; Last year, the consumption and output of coated white paperboard were basically the same, both at about 500000 tons; In 2001, the demand for Kraft linerboard was about 860000 tons, and domestic production could not meet it. However, at present, the growth of output (29%) has exceeded the growth of consumption, and the contradiction between supply and demand is likely to slow down

these three varieties not only have a rapid growth in consumer demand, but also have a large gap between domestic supply and demand. They should become the focus of foreign investors when investing in China's paper industry or expanding production in the future. In addition, the domestic output of household paper has exceeded the consumption, with 2.7 million tons and 2.61 million tons respectively; However, paper still belongs to the category of restricted foreign investment, and it is also the paper variety with the longest transition period of tariff reduction

according to incomplete statistics, during the "Ninth Five Year Plan" period, several large-scale wholly-owned and joint venture projects newly built by foreign investors in Jiangsu, Zhejiang, Guangdong and other places have a total investment of 20billion yuan, and are positioned in high-end products. According to the statistics provided by the China Paper Association, among the 11 paper-making enterprises with a sales revenue of more than 1billion yuan in 2001, foreign-funded enterprises have taken an absolute advantage, occupying six seats in the top eight. Golden paper (Jiangsu) Co., Ltd. ranks first with a sales revenue of 5.209 billion yuan, far exceeding the second Shandong Chenming Paper Group Co., Ltd. with 2.743 billion yuan. Among the paper-making enterprises with annual sales revenue of 5million yuan and above, the number of foreign-funded enterprises only accounts for 8.7%, but the product sales revenue and total profits and taxes reach 30.3% and 31.1% respectively

while foreign-funded enterprises that entered in the early stage have established a dominant position in China's paper industry, large domestic enterprises are also rising rapidly, which means that foreign investors who are ready to enter this market will face more challenges. Industry experts remind that if you want to gain a firm foothold in the market as soon as possible, you should adopt a strategy different from that of early investors. If we still invest and build factories at present, the time for products to enter the market will be delayed, which will greatly weaken the competitiveness. From the perspective of the situation before these operations are essential, mergers and acquisitions of Chinese enterprises can be regarded as a shortcut to achieve quick results

Johnson Deron, chairman and CEO of American International Paper Company, said recently that the current dispersion of Chinese paper enterprises is similar to the development of the early paper industry in the United States. Mergers and acquisitions will be a long-term trend in the future. If there is an opportunity, international paper giants will also join the activities of mergers and reorganizations of Chinese enterprises

in the next few years, China will reduce tariffs year by year. By July 1st, 2006, the highest tax rate of paper products is only 7.5%, and the lowest is only 2%. 50% - 60% of domestic enterprises will be impacted, which will inevitably lead to a new round of mergers and acquisitions. Taking the road of large-scale and internationalization is becoming a new development trend of domestic pulp and paper enterprises

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