China Papermaking Industry Report, 2012 - Latest Report


Naperville, IL -- (SBWIRE) -- 07/09/2012 -- Influenced by the economic environment, a number of worldwide paper pulp projects planned to start construction in 2009 and 2010 have been postponed to 2011 and 2012, resulting in rising costs of global wood pulp, waste paper and other raw materials because of supply shortage, thus narrowing profit margins of papermaking enterprises. The average gross margin of Chinese papermaking enterprises (with annual sales of over RMB20 million) was 13% in 2011, down 0.5 percentage point compared with the previous year, and then continued to drop to 12% in the first quarter of 2012. As domestic and international pulp projects have been put into production one after another, it is anticipated that the raw material prices will see decline in the second half of 2012.

In China, linerboard and corrugated paper are primarily applied to the packaging industry as two types of paper products with the largest consumption. In 2011, China’s new papermaking capacity was 9.2 million tons, of which, linerboard contributed the most, up to 1.8 million tons; followed by corrugated paper with 1.71 million tons. In the same year, China’s paper and paperboard production reached 99.3 million tons, of which, linerboard and corrugated paper respectively accounted for 20.0% and 19.9%; while in the consumption of 97.52 million tons, they shared 21.3% and 20.4% separately.

Viewing from the market structure, the concentration of China papermaking industry in 2011 is improved to some extent.

There are a total of 11 papermaking enterprises with annual paper and paperboard output exceeding one million tons, one more than that in 2010;
There are two enterprises with annual pulp output outnumbering one million tons, one more than that in 2010;
Paper and paperboard production of top 30 enterprises accounted for 43.05% of the total output, an increase of 0.74 percentage point over 2010.

The rise in market concentration owes to the backward capacity phase-out policy implemented in China in recent two years. From 2006 to 2010, China shut down altogether more than 2,000 pulp and paper enterprises and eliminated backward capacity of over 10 million tons. In the next five years (2011-2015), China planned to phase out another 10 million tons of backward capacity.

Nine Dragons Paper (Holdings) Limited is the largest papermaking enterprise in China, headquartered in Hong Kong, with over 85% of revenue from Mainland China. In 2011, its papermaking capacity realized 11.18 million t/a, occupying more than 10% of China’s total papermaking capacity. Cardboard is the most important product of Nine Dragons Paper, with capacity accounting for 54.83% of the company’s total capacity in 2011; followed by corrugating medium with a proportion of 27.73%. In 2012 and 2013, Nine Dragons Paper will further expand cardboard capacity through new paper machines.

As China’s second largest papermaking enterprise, Shandong Chenming Paper Holdings Limited is headquartered in Shandong province, with copper printing paper as the main product. In May 2011, the EU ruled to levy 4.3%~12% of the countervailing duty and 8%~34.8% of the anti-dumping duties on Chinese copper printing paper companies, which inflicted heavy losses on the company’s copper printing paper business, whose revenue decreased by 11.30% YoY in 2011, and gross margin dropped 8.81 percentage points over 2010.

Among Chinese papermaking enterprises, Guangdong Guanhao High-Tech Co., Ltd enjoys the highest gross margin, even hitting 20.62% in 2011, which is mainly because it is China’s sole supplier of VAT invoices, paper for which accounts for 15-20% of the company’s carbon-free paper production and sales.

China Papermaking Industry Report, 2012 by ResearchInChina mainly covers the followings:

Operation such as revenue, profit, gross margin, etc.;
Production and consumption as a whole and of all kinds of products;

Capacity and major projects;
Import & export as a whole and of all sorts of products & raw materials
Development of upstream and downstream sectors, and the influence on papermaking industry;
Development trend of market size, raw materials, market concentration, etc.;
Operation of major players, involving revenue, profit, production & sales, capacity, project construction, etc..

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