Guangxi – a traditionally frontier province producing 2.5 million/mt of paper & board and accounting only 2.3% in China's total paper and board output in 2019 - is now the hotspot of the country's new paper industry investment. In addition to projects already launched by APP and others there, a few large Chinese paper companies have announced their multi-million/mtpy investment projects integrating wood plantation, pulping and paper-making. Reported projects include:
- Nine Dragons will spend +RMB30 billion to build a 8 million/mtpy forest-pulp-paper integration complex there. Phase I will include 1.90 million/mtpy of wood pulp and 3.5 million/mtpy of paper and board, with the balance of 2.55 million/mtpy of pulp, paper and board production capacity in Phase II. Though no disclosure of timeline, market observers expect that Phase I will complete and commercialize before end-2025.
- Lee & Man is finalizing the details with the local authorities on the launch of its 6.2 million/mtpy forest-pulp-paper integration project.
- Sun Paper is in full speed of constructing its forest-pulp-paper integration project involving nearly 1.5 million/mtpy of chemical & mechanical pulp and 550,000/mtpy of fine paper. Project is scheduled to complete and commercialize by the 1st half of 2022.
- After completion of its Phase I project with 900,000/mtpy of mechanical pulp and 1.2 million/mtpy of coated SBS board capacity, APP has gone into Phase II expansion in Guangxi. This is to add 1 million/mtpy of coated SBS board capacity in 2021.
- Jianhui Paper – a top-10 packaging board producer in China with main mill site in neighboring Guangdong Province – has come into agreement with local government of Guangxi to complete civil preparation before end-March 2021, in order to construct 4 pulp mills and 8 paper machines at the projected investment of RMB13 billion.
- Xianhe Co. Ltd. – a specialty pulp and paper producer in China – will invest RMB11.8 billion to its forest-pulp-paper integration project with 1.5 million/mtpy of pulp and 1 million/mtpy of specialty paper capacity. Projected in 7 years through 3 phases, Phase I is scheduled to complete in 3 years from the start of construction.
- APRIL and other paper companies are also talking to the local government for investment feasibility.
Having rich natural resources, including forest, water and harbor as well as improved highway and rail transportation system, Guangxi is ideal for paper industry investors who now care not only for product sales and marketing, but also the security of fiber and labor supply. In the course of eventually digesting and entertaining roughly 20 million tons of new pulp and paper capacity, the province may still need time to adjust and deal with issues caused by the flock-in of such investment in such a short period of time, market observers believe.
