Chinese paper giants spy brighter future

Asia – For 2014 as a whole, one of China’s leading containerboard producers Lee & Man Paper Manufacturing recorded total sales of 5.06 million tons and a ‘steady’ net profit of HK$ 1.9 billion (US$ 245 million).

The paper industry has suffered from ‘overcapacity and paper price pressure’ in recent years, acknowledges chairman Raymond Lee. But in the long term, he believes, demand for packaging papers in China ‘will keep on increasing’. And he asserts: ‘More and more inferior production capacities will close due to the tightened environmental protection regulations. It is believed that the supply over demand situation for the paper industry will be further improved.’

Annual production capacity of the group is currently 5.23 million tons of containerboard, 150 000 tons of pulp and 25 000 tons of tissue paper. The group’s ceo Edmond Lee adds: ‘Lee & Man Paper will continue to increase its capacity in existing industrial parks and develop new industrial parks in tandem with the pace of economic development.’

Late last month, Nine Dragons Paper – Asia’s largest containerboard manufacturer – announced that its finished product sales increased by 6.6% in the second half of 2014 whereas its profit for the period fell 28.7% to around RMB 700 million (US$ 110 million).

In the longer term, however, it expects closure of outdated production capacities and more stringent approval barriers for papermaking projects to benefit ‘enterprises with strong capabilities’ such as its own.