The changes of the hottest imported paper in the p

Changes of imported paper in three decades: how will Southeast Asia impact on made in China?

release date: Source: Packaging Industry Alliance Views: 1816 copyright and disclaimer

core tip: after the Spring Festival in 2020, the packaging industry alliance closely followed the resumption of packaging enterprises, interviewed a large number of packaging enterprises in depth, and carried out a series of reports on the packaging "epidemic" line. In the report, it was mentioned that after the Spring Festival in 2020, the packaging industry alliance closely followed the resumption of work of packaging enterprises, interviewed a large number of enterprises in-depth about the performance and requirements of packaging tested according to the needs of flexible packaging film, and carried out a series of reports on the packaging "epidemic" line. According to the report, a considerable number of secondary factories began to purchase imported paper years ago, and benefited a lot from the subsequent rise in prices

the purchase of base paper by the secondary factory is completely price oriented. Compared with imported paper, domestic paper continues to improve in quality, delivery time and service, and forms an advantageous barrier to imported paper. However, if the price is attractive enough, packaging enterprises will certainly not give up the source of imported paper. According to the situation reflected by the secondary factory, the current imported paper traders adopt the strategy of benchmarking the paper prices of similar countries and following the market. The quotation fluctuates greatly, but it can basically maintain a price difference of more than 200 yuan/ton compared with similar domestic paper

some people say, "what China buys is expensive; what it sells is cheap" - however, in recent years, this statement has become increasingly ineffective. With the price advantage, the number of imported paper has doubled in a year or two. How did all this happen? What reference significance does it bring to China's manufacturing industry

1. Traceability: analysis of the source countries of imported paper

according to the source, domestic imported paper can be mainly divided into European and American system, Southeast Asian system and Brazil Australia southern hemisphere system, but it will be more complex in the specific geographical source. In northern Europe and Eastern Europe, there are great differences between Oklahoma and Oklahoma. The traditional papermaking countries in Southeast Asia, such as Indonesia and Thailand, also present very different production patterns from emerging countries such as Vietnam, Laos and even Cambodia. Even other emerging import source markets, such as India, Turkey and Israel, can come in and take a share

in the three years from 2015 to 2018, the number of corrugated paper import source countries increased from 16 in 2015 to 38

the source of corrugated paper imports in 2015 and 2018 (source: risi)

this makes China's base paper import market extremely complex. Relying on the high-quality fiber advantages of high-latitude coniferous forests, all wood pulp beef cards in European and American countries have always been exclusively for some large brand customers, occupying a stable and limited market share in this kind of market; The corrugated paper benchmarked to the domestic first-line paper mills is stratified according to gram weight, or it may come from Russia, and the paper machine production is transformed. Or from Southeast Asia, in addition to a small amount of vermicelli cardboard, but also mostly from Southeast Asia, a small part of Europe. In addition to exporting a small amount of low gram weight whole wood pulp Kraft, Australia also exports a large amount of core paper (sizing)

however, the most noteworthy is the small discrete data field in Southeast Asia. In recent years, China has imported more and more base paper from Southeast Asia, especially g corrugated paper, which was once flooded in some coastal secondary factories. Of course, word-of-mouth differentiation is also very strong, and the gap is so large that people can even distinguish at a glance by looking at the color and smell the taste

however, under the absolute price advantage, some packaging enterprises will still be able to accept it. We can understand that the base paper in Southeast Asia is copying the road that Chinese paper enterprises have gone through to some extent. "Feel China and cross the river", relying on the price advantage, imported paper from emerging markets in Southeast Asia has sprung up

2. Transfer: analysis of the reasons for the rise of emerging markets

speaking of the Southeast Asian market, I have to mention Taiwan, China, China, and the three major industrial paper mills in Taiwan, Zhenglong, Rongcheng and yongfengyu, which are also another important source of imported paper not mentioned in the previous chapter

since the mainland of China opened to the outside world in the late 1970s, Hong Kong and Taiwan have been the most important foreign investors in the mainland. For quite a long time after the reform and opening up, investors from Hong Kong and Taiwan brought capital and technology to the mainland, as well as the business philosophy and management experience of modern enterprises. With the transfer of manufacturing industry, a large number of manufacturing capacity was moved to the mainland

the booming manufacturing industry has generated a huge demand for packaging paper. At the beginning of the 21st century, Taiwan's three major paper mills speeded up their efforts to "swing to the mainland" and invested heavily in building factories in East China, North China and central China, which once became an important force in the field of packaging and papermaking in China

however, the trend has changed in turn. With the pressure of environmental protection, the increase of labor costs, as well as the trigger of foreign waste restrictions and other issues, Taiwan's paper enterprises began the transfer journey, and gradually regarded the mainland as a sales market. In addition to Taiwan Province, another major transfer destination is Southeast Asia. In recent years, paper-making enterprises with Taiwan funded backgrounds have continuously increased their investment in Southeast Asia, greatly expanding and building paper-making capacity

it is estimated that many bosses are familiar with this series of operations. For example, in the field of shoe making, from the fourth quarter of 2018, Taiwan's three major shoe makers, Baocheng, Fengtai and Yuqi, coincidentally continued to strengthen the expansion or operation in non mainland areas, and then transferred a large amount of production capacity to Southeast Asia, especially Vietnam, Thailand and other countries. In the field of textile, clothing and toys, there are also a large number of similar situations

3. New battleground: Chinese paper enterprises compete in Southeast Asia

in the past eight years, the annual compound growth rate of packaging paper demand in other Asian countries and regions has been about 3%, of which Vietnam and India have the fastest growth; In terms of export volume, Vietnam, Taiwan, China, Indonesia and India have the fastest growth. From this point of view, the choice of Taiwan funded enterprises to transfer production capacity to Southeast Asia is "brilliant"

however, not only Taiwan funded enterprises but also Chinese paper enterprises are competing in Southeast Asia. Nine Dragons Vietnam branch has become one of the nine major papermaking bases of nine dragons, with an annual production capacity of 450000 tons; Liwen paper is the first domestic enterprise to invest and build factories abroad. In 2007, it began to build its first factory in Vietnam. Shanying, Taiyang paper and Jingxing also have a large amount of investment in Southeast Asia

as early as 2018, recycled carton board and corrugated paper from Vietnam accounted for 10% and 16% of China's import sources respectively. As more enterprises laid out in Vietnam, this proportion increased year by year

from this perspective, the manufacturing industry (including papermaking) in Southeast Asian countries is "touching China across the river", but are Chinese enterprises not "borrowing chickens to lay eggs"

apart from the short-term labor cost advantage, the most fundamental reason for paper enterprises to choose Southeast Asia is the environmental protection policy advantage of Southeast Asian countries. Since the implementation of the waste paper import restriction in 2017, the channels of domestic high-quality papermaking raw materials have been limited, and Southeast Asia, especially Vietnam, has become the best choice for paper mills by virtue of its geographical advantages. Through the establishment of a factory in Vietnam and the nearby use of foreign waste to produce the fixture for the original tensile testing machine, there is no fixed mode in the structure. According to different samples and the size of the experimental force, there are great differences in the structure The specimen with large experimental force generally adopts the inclined clamping structure. With the increase of experimental force, the clamping force will increase. Paper can not only alleviate the pressure of domestic raw material demand, but also compete in the local demand market in Vietnam. Over the past decade, Vietnam's demand for packaging paper has maintained a compound annual growth rate of more than 10%, but most of the market is basically monopolized by China (including Taiwan Province)

in other words, although it seems that the number of imported paper is increasing, many imported paper we can see may be produced by Chinese paper enterprises, but the region has changed (even to some extent, it has diluted the proportion of countries and regions such as the United States, Australia, Russia)

4. New era: how to deal with the possible market shrinkage of packers

we have basically known the root cause of the sudden change in the imported paper market in recent years. However, what is the significance of discussing these for packaging enterprises? Back to the first two topics

the continuous flow of imported paper has made certain variables in the price trend of domestic base paper. How big is this impact? As foreign emerging markets copy the Chinese model, so that China's manufacturing industry shifts, driving the reduction of packaging demand, and so that China's enterprises, including the packaging industry, have a shrinking crisis, how should Chinese enterprises reflect

according to the survey data of China Paper Association, there were about 2700 paper and paperboard production enterprises in China in 2019, and the national paper and paperboard production was 107.65 million tons, an increase of 3.16% over the previous year. In 2019, the import of paper and paperboard was 6.25 million tons, an increase of 0.48% over the previous year. Converted, the proportion of imported paper is 5.8%, less than 6%

from this ratio, imported paper will become the influencing factor of base paper price to a certain extent, but will not become the dominant factor. In order to suppress the import of paper to take some kind of big price reduction, this is to lose watermelon and pick sesame seeds - we may have heard of this "magical operation" in a certain region or a special period, but it will never become the mainstream

but another topic, the rise of emerging manufacturing industries in Southeast Asia, is obviously more worthy of consideration for China's manufacturing industry. It used to be "what China buys, what is expensive; what it sells, what is cheap". Now, the loss of the advantages of these traditional made in China projects, whether in papermaking, clothing, or footwear, may have a more serious impact on the confidence level of China's manufacturing industry

in recent years, we have constantly seen some domestic media exaggerate the topic of the decline of China's manufacturing industry. In the field of papermaking, we have experienced from weak to strong, from short supply to oversupply, from just needed imports in short supply, to the rise of domestic production, and then to the re formation of price advantage of imported paper over domestic paper. How did all this happen? This is a very classic case

after pulling the cocoon, we found that there is also the "borrowing chicken to lay eggs" technique of some enterprises. However, paper-making enterprises can do this because they have accumulated for more than ten years, which is the natural result of the rise of China's manufacturing industry. For the more downstream, scattered and smaller packaging enterprises, with the replication of the Chinese model in foreign emerging markets, the large-scale transfer of China's low-end manufacturing industry, and the reduction of packaging demand driven by the national food safety standards for various products, how can Chinese packaging enterprises find new development opportunities in the face of the inevitable regional market contraction? This is a question worth thinking about for the packers in the new era