Asia
CHINA
APP China to build twelve small tissue PMs with capacity of 240,000 tpy
(PPI Asia) – APP China has decided to add twelve more tissue machines with a combined capacity of 240,000tpy to its tissue paper expansion plan in China.
The twelve PMs will be erected at the company’s pulp and paper complex in Haikou city on the country’s southernmost island of Hainan.
Two out of the twelve are slated to come online later this year and the remaining ten are expected to be commissioned in 2013, according to a senior executive at APP China.
The twelve machines will be identical, each having a width of 2.8m, a design speed of 1,600m/min and a capacity of 20,000tpy.
APP China’s subsidiary, Jinshun Paper Machinery, will assemble all the units, with key components such as headboxes, steel Yankee dryers and hoods to be provided mainly by European manufacturers.
Thinking beyond big units: The investments mark APP China’s change of strategy in opting for smaller machines in its tissue capacity expansion.
The firm was previously in favour of bigger machines, ordering eleven 5.6m wide tissue PMs, ten from A Celli and one from Voith Paper, each having a capacity of 60,00tpy.
So far, two A Celli units have been commissioned. One started up in April last year at the firm’s Suzhou mill in Jiangsu province, and the other came on stream at a greenfield mill in Xiaogan city, Hubei province, in September 2011.
Another two A Celli machines and the Voith PM are coming online soon.
One of the two A Celli units has been erected at a greenfield plant in Xinmin city, Liaoning province. Mechanical tests on the unit have started, after a local electricity company began supplying power to the mill at the end of February.
The plant aims to put stock on the wire and start producing paper on the PM by the end of this month.
The other A Celli PM is being installed at the Xiaogan site. Startup is scheduled for mid- April.
The Voith PM is for the Suzhou mill. With trial runs having kicked off on the unit on March 5, it is being fine-tuned now. Commercial production is expected to begin by the end of March.
The rest of the six A Celli machines were originally planned to be installed at the Haikou complex.
But APP China has now decided to erect just four A Celli machines at the plant, following the move to install the twelve 2.8m wide units there.
Two of the four A Celli PMs at the mill will be commissioned later this year and the other two units are planned to come on stream next year.
The remaining two A Celli units will be installed at the firm’s mills elsewhere in China. The APP China contact said one of the two A Celli machines will be built at a greenfield mill in Suining city, Sichuan province, with startup slated for mid-2013. The other unit will be erected at the Suzhou mill, with startup scheduled for later this year or next, he added. The senior executive explained that although the company is generally happy with the performance of the big 5.6m wide machines, powering them is expensive. They use gas hoods, meaning they are required to use liquefied natural gas as fuel, which is costly in China. He said the narrower machines will feature steam hoods and use electricity generated inhouse or from local grids. This will cut costs significantly.
Pulp integration edge: By choosing the Haikou complex as a major hub for its tissue expansion, APP China envisages benefiting from integrating tissue production with the site’s 1.35 million tpy bleached hardwood pulp line, giving the firm a cost edge over its competitors in the country. Most Chinese tissue producers rely on market pulp sourced in the domestic market or overseas.
The contact indicated that demand for good quality tissue products is still growing in China due to rapid urbanization and decades of economic growth, prompting the company to pursue expansion.
“We are currently facing a shortage of jumbo rolls for converting into finished products and we are pushing for further expansion in the next few years,” the contact said.
To avoid facing oversupply in China in the future, APP China is strengthening its exports of virgin fibre-based tissue products, especially to South Korea and Japan, where the majority of tissue firms make recycled tissue products. The contact said the firm’s expansion will not stop with the present plans.
“We are discussing with suppliers about manufacturing large machines with cuttingedge technology, such as one featuring a 22- foot Yankee dryer,” he added. News from RISI (www.risiinfo.com)
China’s booming tissue industry
One of the fastest growing areas in China in recent years has been tissue, taking advantage of improving living standards and the rapid urbanisation of the country.
“China’s tissue production in 2011 is expected to be 8 to 10% more compared with that in 2010 at 5.248m tonnes, while the country’s tissue consumption in 2011 is 10% more compared with that in 2010 at 4.663m tonnes,” says Jiang Manxia, secretary general of China National Household Industry Association (CNHPIA).
China is now the world’s second largest tissue producer and consumer, after the US, and its consumption accounts for around 15% of the world’s total.
To show how rapid growth has been, just over 20 years ago, in 1990, China produced only 679,000 tonnes of tissue. “The output in 2010 was 7.7 times that in 1990,” adds Jiang. Big tissue producers are expanding rapidly in recent years to secure a strong foothold in this lucrative market.
Big players’ fast expansion
Hengan International, a leading tissue maker founded in 1985, has been growing fast and will expand ambitiously this year.
The company’s capacity was 540,000tpy by the end 2010 at its three sites in Weifang, Changde and Jinjiang, according to the company’s 2010 annual report.
With the startup of a new tissue paper unit in January 2012 at a greenfield mill in the southwestern municipality of Chongqing, the company’s capacity has reached 600,000tpy.
That is not the end. The company will bring another five more big tissue machines online, each with a capacity of 60,000tpy, at three sites in China in 2012, including new sites at Chongqing and Wuhu.
The company’s capacity will reach 900,000tpy by the end of 2012.
“The company plans to reach capacity of 1.2m tpy by 2015,” says Jiang.
Hengan aims to tap into inland China, where demand for good quality tissue products is growing. In the world picture, “Hengan International will jump from 12th position to seventh among the global suppliers in 2012,” according to RISI’s Esko Uutela, principal, tissue, in his viewpoint published in PPI, November 2011.
However the market’s competition is fierce and the biggest competitor is by no means APP. APP China’s total tissue capacity will reach 1.372m tpy in 2013 at its production bases in Suzhou (Jiangsu), Haikou (Hainan), Suining (Sichuan), Xiaogan (Hubei) and Xinmin (Shenyang), according to RISI Asian News Letter.
“APP will clearly take the number four global tissue supplier position from P&G by 2013, according to the committed investment plans (not including some more investments still in the planning stage)”, says Uutela.
Currently, the four largest global tissue suppliers are still of Western origin, with Kimberly-Clark (K-C) continuing to be the global leader, followed by Georgia-Pacific (GP), SCA and Procter & Gamble.
The two other main Chinese players, Vinda Paper (where SCA is a less than 20% minority shareholder) and the C&S Group (formerly Zhongshun), will also improve their relative positions in terms of capacity in the world picture.
The booming tissue industry is also an excellent opportunity for producers to equip themselves with modern and efficient technology. Just about 20 years ago, the majority of China’s tissue was of poor quality, made from waste paper and straw pulp.
“In 2009, two lines had a capacity of 60,000tpy (for a single production line), and the figure increased to three in 2010, and it jumped to 12 in 2011,” says Jiang.
Andritz has launched new energy-saving features and capabilities for its line of Crescent Former tissue machines and components. “Type M machines (widths from 3.4-3.65m) and Type W machines (widths from 5.4-5.6m) can now be equipped with a PrimeDry Steel Yankee, a PrimePress XT shoe press, and a PrimeDry HeatRecovery ReEvaporation system which all help to achieve remarkable savings,” according to the supplier. These new features and capabilities have gained wide attention.
“Within 2011, Andritz received orders for eight tissue machines from Chinese customers. One machine is a Type M (PrimeLineTM M6); the remainder are Type W (four PrimeLineTM W6 and three PrimeLineTM W8). Three of the new machines will be delivered with steel Yankees and two with shoe presses,” adds the supplier.
As for Metso, the company is providing the Advantage DCT, Advantage TAD and the brand new Advantage NTT concepts to the tissue market.
A recent reference is that Metso-supplied Hengan PM10 at its mill in Weifang city, Shandong province, that reached a record speed of 2,000m/min, surpassing its standard operating speed of 1,900m/min. The 5.6m-wide unit started up in November 2011.
The contact for Hengan said that the machine has been running at the high speed for more than a month, and few tissue machines in China can compare with it. The machine, an Advantage DCT 200 tissue production line, is equipped with the Advantage ViscoNip long-nip press, according to the supplier.
At the Tissue World conference and exhibition in Asia in November 2010, Voith Paper introduced its latest sensor innovation for tissue production – Voith LSC TecoSens. This sensor provides simultaneous online measurement of fibre weight and moisture based on an infrared spectroscopic measurement, according to the supplier.
New players joining in
In addition to existing tissue paper companies, some companies that previously made other paper and board grades and even operated in other industries have entered the sector, which will make competition much fiercer in the next two years.
For example, Shandong Chenming Paper started up the company’s first tissue line in 2010. The company says that it plans to commit to tissue projects in Jilin, Jinan, Wuhuan and Zhanjiang in 2012.
Asia Pacific Resources International (APRIL) also joined the tissue making competition by announcing in April 2011 that it would add four tissue lines (each capable of producing 60,000tpy).
In another development, Fushun Mining Group, a complex energy enterprise focusing on the exploitation of coal resources and the development of oil shale, just started up a tissue line in October 2011. Converting equipment has also been installed to process jumbo rolls on-site into finished tissue products.
“Traditional tissue companies should be fine when they are expanding rapidly, as they have solid consumer bases, while for newcomers, it is not that easy to exploit the market quickly,” comments Jiang.
Other challenges the sector is facing include fibre supply, which the country is short of, not only in tissue but also in other paper grades. “APP and APRIL, which are making pulp themselves, should have competitive edge in terms of cost,” says Jiang.
Quite a few Chinese companies have already slowed down their pace amid market pressure. Some have postponed their startups in 2011 to 2012, and even later.
“The oversupply in the tissue market will be just temporary, and the market still has a lot of potential for growth in the long run,” adds Jiang.
Per capita consumption of tissue was still at a relatively low level of about 3.3 kg/yr in China in 2010, which shows there is substantial further growth potential, although regional differences are large with the 10-kg/yr per capita level having been reached or even surpassed in Shanghai and Beijing, according to the RISI Outlook for World Tissue Business Forecast published in March 2011.
China just released the 12th Five Year Plan for the paper industry (2011-2015), directing the pulp and paper industry’s development over 2015, by three governmental organizations: the National Development and Reform Commission, the Ministry of Industry and Information Technology (MIIT), and the State Forestry Administration.
The plan states the missions on innovation, technology reform, merger and acquisition as well as energy-saving and emission-reduction – for further development of the paper industry in China.
“The guidelines require high environmental and energy consumption standards for paper producers to follow,” says Cao Zhenlei, general secretary of China Paper Industry Technical Association.
It should be a good chance for the tissue market’s modernisation and escalation.
Polluting, small and outdated companies will be further ousted from the market.
For big and medium players, it might not be bad for them to slow down a bit after the recent years’ fast expansions, enabling them to be ready for a new round of investment in the near future on a more solid basis.
News from RISI (www.risiinfo.com)
China’s Henan Yinge tests 60,000tpy tissue unit
Henan Yinge Industrial Investment has started trial runs on a 60,000tpy tissue unit at a greenfield mill in Luohe city, Henan province. Commercial production will start after the unit’s performance is optimised.
The PM was supplied by Voith Paper and has a wire width of 5.6m, and a design speed of 2,000m/min.
The company also plans to commission an identical tissue paper unit from Voith Paper at the site in May.
Henan Yinge currently operates several other mills in Henan and Sichuan provinces, boasting a combined capacity of around one million tpy of pulp and paper.News from RISI (www.risiinfo.com)
China’s Shanghai Orient Champion to start up tissue unit
Shanghai Orient Champion Paper plans to start up a new 40,000tpy tissue unit by the end of this month at its mill in Shanghai.
Installation work is almost wrapped up, according to a contact from the company. The unit, PM 8, was supplied by Metso Paper. It has a trim width of 3.8m, and a design speed of 1,800m/min.
Last September, the firm also commissioned a 30,000tpy Metso Paper tissue unit dubbed PM 7. News from RISI (www.risiinfo.com)
Andritz-supplied tissue paper machine starts up at China’s Hengan Group Chongqing
Andritz has successfully started up the PM11 tissue paper machine supplied to Hengan Group Chongqing.
PM11 has a design speed of 2,100 m/min, a width of 5.6 m, and is equipped with energysaving components such as steel Yankee head insulation and a re-evaporation system. Andritz’s scope of supply also included the complete stock preparation and automation system.
Hengan Group now has six Andritz PrimeLine machines in operation and three more machines will be started up during this year.
Andritz said that two of the machines will be equipped with “the world’s first wide steel Yankees (diameter: 5 m) for high-speed machines”
SCA’s offer to acquire Everbeauty accepted
SCA’s SEK 1.9bn binding offer to acquire Asian personal care products company Everbeauty has been accepted and the process continues towards closing.
This acceptance offer follows the privatisation of Everbeauty under Taiwanese law. As a result, a sale and purchase agreement has been signed by SCA and the sellers. It was announced on 25 February that SCA had delivered a binding offer to acquire Everbeauty.
SCA said Asia is one of its prioritised growth markets, and that following its move, its position there will be “substantially strengthened”. The company has sales in China, Taiwan and Southeast Asia.
Following the signing of the sale and purchase agreement by the parties, the process will continue towards completing the acquisition, which will include seeking the approvals and clearances from relevant authorities in Taiwan. Closing of the deal is expected to take place in the summer of 2012.
Everbeauty had sales of SEK 1.6bn in 2010 and produces and markets baby diapers and incontinence care products with brands such as Dr P for incontinence care products and Sealer for baby diapers.
Within incontinence care products, the company holds a number two position in China and a number one position in Taiwan.
Within baby diapers, it holds a number five position in China and Taiwan.
