(www.chinapaperonline.com) On May 7th, China Paper Association (CPA) published its 2018 industry performance report. While affirming the industry’s steadiness in general, the report acknowledged more challenges resulting into down turns in industry output and earnings during the year.
According to the report, the number of paper and board producers in the country reduced to 2,700 in 2018 (vs. 2,800 in 2017) and their combined paper and board production fell to 104.35 million/tonne, -6.24% from that of 2017. Adverse economic environment in the country also shrank national paper and board consumption by -4.20% from the previous year to 104.39 million/tonne in 2018. Based on the country’s population of 1.39 billion, the per capita consumption of the year dipped slightly from 77 kilos in 2017 to 75 kilos in 2018, the report averages.
While more small and environmentally unfriendly paper and board mills shutting down permanently, existing producers in China experienced business slow-downs, which lowered their total core business revenues to RMB815.2 billion and plunged their net earnings by -15.05% year-on-year to RMB46.6 billion as a result. At the same time, inventories rose +14.31% to RMB39.0 billion by the end of the year. The industry saw its total assets managed to grow +4.58% from the previous year to RMB1050.5 billion, along with a +6.02% rise in liability to RMB622.9 billion. Among the 2,657 companies surveyed by CPA, 543 reported negative performance during the year.
As expected, Nine Dragons remained as the leader well ahead of others in the industry, producing 13.94 million/tonne of paper and board, up +6.17% from the previous year and equaling 13% of the industry’s total production of the year. Lee&man also upheld its position as the second largest paper and board producer in the country, with +1.48% increase from 2017 to more than 5.63 million/tons of production in 2018. Shanying Paper, a fast growing company in the industry, overtook Chenming Paper and Sun Paper to become the 3rd largest paper company in China, with 4.61 million/tonne of paper and board output in 2018 after an amazing +28.77% expansion from 2017! Today, the top-3 are representing 1/4 of China’s paper and board production and their position in the industry will be further enhanced with continuous investment at home and abroad, market analysts said. While the top-3 enhancing their superiority, China’s paper industry will see more consolidation among the mid-size companies, following the example of merger between Jinzhou Paper and Yinzhou Paper in Dongguan, South China in early 2018.