Is it better to plan to go abroad to build a waste pulp mill?

Affected by factors such as the tightening of waste paper import policies and the Sino-US trade war, China’s waste paper imports may be reduced by about half in 2017 compared with 2017. This has pushed up the price of domestic waste paper. It also makes domestic packaging paper factories face the dilemma of “no rice and no pot” in the production of high-end products. How to solve the problem of raw materials? We have seen many attempts by Chinese paper companies. For example, most companies choose to buy unbleached raw pulp, such as Sun Paper’s self-built semi-chemical pulp production line, and then like the dragon and mountain eagle. The United States acquires ready-made pulp mills and so on. These attempts are a useful complement to raw materials. However, the limitations of these methods are also obvious. The price of purchasing raw pulp is too high, and the production cost is high; the construction of wood pulp line has strict environmental protection requirements, and the approval is difficult; and the purchase of pulp mills abroad requires a large amount of foreign exchange, but also The international project operation and management team is not the business that the average enterprise can control.

Foreign pulp mills have become a trend

Smart Chinese entrepreneurs can always come up with smart ways. Since the beginning of this year, waste paper pulp has been imported into China as a new product. This product, which is mainly processed by the simple pulping process, is mainly from Taiwan and Vietnam. In India, Indonesia and other places, unlike traditional wood pulp boards, this product has high water content and short storage time, but it can be smoothly cleared.

However, such products are not large-scale production in foreign countries, and the output is extremely limited. In addition, the large purchases by Chinese companies are quickly in short supply. As a result, Chinese companies, mainly based on southeastern coastal paper mills, have begun new attempts to build new waste pulp mills in neighboring countries or regions in China. Among them, Taiwan, Vietnam, Malaysia, Asia and Thailand are the first choice for Chinese companies. In addition, some companies in Shandong are planning to invest in waste paper pulp mills in Mexico. According to the knowledge of the paper industry, some listed companies have purchased more than 10 pulp production lines and plan to make waste pulp in neighboring countries in China.

After China restricted the import of American waste, a large amount of US waste entered the neighboring countries of China. The paper industry consulted the situation of US waste exporting countries and exports from April to September this year. China is still the largest importer. The country, and in September, also created the record for the largest amount of imported US waste this year, importing 749,000 US tons in the month. In addition to China, India, Mexico, Indonesia, South Korea, Vietnam, Taiwan and other countries and regions are also the main export destinations of US waste.

Policy changes are fast, risks are increasing

However, the plan is not as fast as the change. Due to the great environmental pressure caused by the large amount of waste paper entering the country, starting from July this year, countries and regions around China have successively introduced a similar waste restriction order with China.

In Vietnam, for example, starting in July, the government asked to review all remaining permits and stop issuing new scrap import licenses. The government will “revise the legal documents on waste import management, taking into account environmental protection and establishing mechanisms to manage, control and prevent the trade and import of waste”.

For example, in Malaysia, the import license was frozen in the previous three months, and from October 23, the government will impose an import fee of MYR 15 (equivalent to RMB 24.99) per ton to imported foreign garbage.

More stringent is Taiwan. Since October, the government has strengthened the import management of waste paper and other wastes, clearly indicating that imported waste paper is only recycled and properly classified kraft paper, corrugated paper or deinked paper, commonly known as OCC. And high-grade waste paper, and the importer's identity as a manufacturer of paper or paper products. Previously, Taiwan had no restrictions on the types of waste paper imports and the identity of importers. This means that if you go to Taiwan to make waste paper, you must produce finished paper locally.

It can also be seen from the above figure. Before July, the amount of US waste imports from Taiwan and Vietnam increased month by month, but it has been declining since August. The situation in India, Indonesia and Malaysia is similar, and the volume of imports has not increased in the first half of the year. The only exception is South Korea, where US imports are still rising. But at present, there is no news of Chinese paper mills investing in South Korea.

To build a waste paper pulp mill with a simple process abroad, you can buy a cheaper US waste, you can use domestic equipment completely, and the investment cost is low and the effect is quick, but the political and market risks are also greater. Some national leaders have already In public, I welcome Chinese companies to invest, but they are not welcome to bring pollution together.

Therefore, is the Chinese paper mill only considering the construction of a waste pulp mill or is it more directly building the raw paper production plant abroad? With the gradual clarification of the national policy, perhaps we will have a more accurate answer next year.

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