The forecast came from Ranjit Baxi, chairman of London-based J&H; Sales (International) and a vice president of the Bureau for International Recycling, who was addressing the German BVSE trade association's annual paper conference in Berlin.
– Ranjit Baxi, J&H; Sales (International)
Mr Baxi said that the growth of the paper industry in China “has only been made possible due to regular availability of imported fibre, comprising of recovered fibre, wood pulp and woodchips.
“In 2007 China’s paper-making capacity will grow by over 4 million tonnes making 2007 a truly testing period for the global supplying regions to see how they can satisfy China’s demand for recovered fibre.”
Mr Baxi, explained that suppliers to China could be divided into four main regions:
- America 46%
- Europe 28%
- Asia (Japan) 18%
- Oceania 2%
Within these figures, Mr Baxi noted how Europe actually supplies 35% of used cardboard (Old KLS), whereas the bulk of used newspapers imported into China – 58% – came from the United States.
The speaker went on to highlight the important role being played by the UK remarking that the “the UK has contributed 39% of the European exports, followed by Holland with 24% and Germany 12%.”
Looking at the 12 major paper mills in China, Mr Baxi explained that China's largest paper company, Nine Dragons, would remain the largest in future, as it will have a final capacity of 9.5 million tonnes production by 2011. In second place will be APP China at 6.25 million tonnes, while Shandong Chenming will be producing 5.48 million tonnes.
“China,” said Mr Baxi, “is projected to produce about 90 million tonnes of paper in the next five to seven years, which will make it the world’s biggest producer of paper, surpassing the USA. The majority of the growth is in the containerboard sector, followed by newsprint, then printing and writing paper.”
India
India also is set for massive growth in demand for recovered fibre, he predicted, although volumes will be much lower than China but having the potential to increase rapidly in the future.
Mr Baxi explained: “India is today’s tiger, with many of us saying India is the next China. China started growing earlier and grew faster, and today the Indian economy is expanding like China’s with continually increasing exports and rising demand. Until 2006 investment in paper machines have been slow, but I foresee a gradual increase in capacity over the next seven years.”
He noted that the Indian paper industry depends primarily on agricultural materials such as bamboo and jute and recovered fibre which meets 68% of the nation’s demand for paper.
Fibre imports for India in 2006 were about 1.2 million tonnes and this could rise threefold by 2010 to 3.5 million tonnes. In particular, Mr Baxi pointed to growth in the newspaper sector. “With a rise in educational levels, there is a projected increase in India’s readership to 750 million by 2010, requiring more newsprint to support the additional demand for reading materials.”
“Dependent”
With the growth in China and India both countries will “remain deficient in fibre supply and will remain highly dependent on recovered fibre for many years to come”, said Mr Baxi.
“China’s paper industry is expanding at an amazing rate, leading to over capacity resulting increased paper exports from China. China’s paper industry expansion using large, modern and competitive production methods by global standards will make their exports globally competitive.
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“We have been seeing mills and machines shutting down both in Europe and America making the exporting of fibre a necessity for us Europeans.”
But, some of this demand for fibre will have to be met by both India and China increasing their own internal recovery levels to 50%, said Mr Baxi. “Imports alone cannot and will not satisfy the rapidly rising thirst for fibre.”
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