Stora Enso unfolds business plan in China
By Liu Jie (China Daily)
Updated: 2005-02-28 14:22

Stora Enso, the world leading paper products manufacturer, vows to further expand its presence in China on a platform of ensuring sustainable and environmentally friendly development.

The firm opened its first sales office on the mainland in the mid-1980s and now the Fortune 500 company operates two plants in East China's Hangzhou and Suzhou, also taking shape is its eucalyptus plantation in Southwest China's Guangxi Zhuang Autonomous Region.

"We have invested a total of 200 million euros (US$260 million) in China to date, while further investments of 40 million euros (US$52 million) in the Suzhou plant and 5 million euros (US$6.5 million) in Hangzhou are under consideration," Markku Pentikainen, president of Stora Enso Asia Pacific, told China Daily.

He stressed that his company's business model focuses on ecological, social and economic sustainability rather than blind expansion.

"Anyway, without a sound environment and the sustainable development of the local market, our expansion here would falter or be impossible," said Pentikainen.

The Finland-based paper giant registered a solely-funded forestry company in October 2002 in Guangxi, where the company pumped US$150 million into building a 150,000-hectare eucalyptus plantation to prepare for the construction of an integrated pulp-paper manufacturing base.

"Our commitment to the Chinese market is based on considerable study," said the president, adding that the huge market potential, cost advantages of raw materials and labour resources, as well as government incentives were major drivers of the firm's local ambitions.

Official statistics showed that China has become one of the world's largest paper manufacturers, consumers and importers, with paper consumption hitting 35 million tons in 2002 - second only to the Unites States.

Experts predicted that the nation's total paper consumption will exceed 80 million tons by 2015.

In tandem with this surging demand will be the need for high-quality and environmentally friendly paper products.

Since 1996, the supply/demand gap has been expanding, making paper one of China's top three imports, along with oil and steel.

Insiders pointed out that introducing the latest technology and equipment to localize manufacturing will benefit both investors and China as it would help ease domestic paper shortages, especially the rising need for high-quality products, and, on the other hand, increase the margins of foreign investors due to the country's cheap labour and logistics.

In addition to its forestry and paper-making arms, Stora Enso has introduced advanced sewage treatment and water recycling facilities to "ensure every manufacturing process is clean."

It is understood that the Chinese Government is to begin a nationwide tree planting programme in the coming five years, involving a total investment at 71.8 billion yuan (US$8.65 billion). Stora Enso has co-operated with the Chinese Academy of Forestry in plantation research and development to enhance their own technologies and aid the programme, according to Pentikainen.

As an integrated paper, packaging and forest products company producing publication and fine paper, packaging boards and wood products, Stora Enso is a listed company in Helsinki, Stockholm and New York.

Its sales totalled 12.2 billion euros (US$15.86 billion) in 2003 and has some 44,000 employees in more than 40 countries and regions on five continents and an annual production capacity of 15.7 million tons of paper and board and 7.4 million cubic metres of sawn wood products, including 2.8 million cubic metres of value-added products.

Stora Enso's major customers are large and small publishers, printing houses and merchants, as well as packaging, joinery and construction industries worldwide.

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