Industry Special: Continued sharp growth in household paper industry

Despite this year's economic slowdown, China's household paper industry maintained strong growth and is poised for further expansion.

Speaking at the "Paper Contract with China" Sustainability Forum 2012, Jiang Manxia, secretary-general of the China National Household Paper Industry Association, said demand continued strong, defying overall negative trends in the paper industry.

Vast potential

While many major industries have suffered rapid declines, the Chinese household paper sector - which includes paper towels, napkins, toilet paper and facial tissues - is projected to grow more than 12 percent this year.

According to statistics from the association, household paper consumption in China grew 10 percent annually between 1990 and 2011, or by more than 500,000 tons each year.

The growth amid negative economic trends is attributed to the ascent of China's paper industry and rising living standards that brought marked improvements in hygiene among consumers in rural regions.

Household paper consumption in China accounted for 17.3 percent of the global total last year.

"Household paper is a fast-moving consumer good less prone to the effects of the economy," Jiang said.

North America is still the biggest user of household paper, with 27.3 percent attributed to the US and Canada, while Western Europe accounts for 21.1 percent. China is now the third-largest market in the world.

Statistics from global consulting firm Euromonitor International show sales growth of 14.5 percent on average for Chinese household paper products over the past five years, compared to 3 percent in the US and 4.2 percent in the Western European market. Yet annual per capita household paper consumption in China is still low.

"At present, the annual per capita consumption in China is 3.9 kilograms, below average worldwide and far behind developed countries, representing significant untapped market potential," said Jiang.

Integration efforts

While the China market has vast potential, many worry that if consumption levels rise to equal the US there will be a shortage of trees in the country.

Advocating a shift toward more sustainable production, the government offered clear guidelines for the development of the industry in its 12th Five-Year Plan (2011-15).

The blueprint includes eight major development goals ranging from improvements in raw materials and structural enhancements to significant reductions in emissions and resource waste.

Leading paper manufacturer APP-China has long been a forerunner in sustainability through its initiatives that integrate the previously separate plantation, pulp and paper business segments into a self-sufficient supply chain cycle.

Spanning the planting of trees and plantation development to pulp and papermaking processes, the initiative is proving effective for sustaining raw material supplies. The plantations that APP-China manages currently cover more than 300,000 hectares.

Further guidance needed

In recent years, some small-scale manufacturers have continued to produce paper illegally, allowing low quality products to enter the marketplace and disregarding their detrimental effects on the health of consumers.

In 2010, the State Administration for Industry and Commerce conducted inspections on samples from 588 different types of sanitary paper products across 28 provinces, including those from autonomous regions and municipalities. A total of 50 product types failed to meet inspection requirements.

"Household paper products are entwined with the lives of ordinary citizens, and the sound development of the industry must depend on the support of various factions in our society," said Jiang. "To improve health and living standards, consumers should purchase green and environmentally friendly household paper products that meet national standards so the industry can continue to develop soundly."

As opposed to low quality paper manufacturers and products, Jiang lauded paper companies such as APP-China that produce high quality, safe and green products for consumers, and are also steadfast in their commitments to corporate citizenship.

Representing APP-China at the forum, Gold Hongye Paper's CEO Xu Xitu said that "APP is keenly aware that ultimate recognition of consumers and the society at large must stem from successful balancing of profits, corporate social responsibility and creating value for customers".

"Sustainable development of household paper products is an integral part of Gold Hongye's strategy. From product innovation to final distribution and sales, we attach equal importance to every detail in our operations to ensure delivery of safe, environmentally friendly and hygienic paper products of the best quality to our customers," Xu added.

zhuanti@chinadaily.com.cn

(China Daily 11/29/2012 page14)