12_decjan_FEATURES COUNTRY REPORTS

Country Report

JAPAN – An Economy Struggling to Recover

Select a figure to view: Figure 1
Distribution of paper machine widths comparing Japan with other T&T machines in the Asia Pacific Region.
Figure 2
Distribution of paper machine technical ages comparing Japan with other T&T machines in Asia Pacific Region.
Figure 3
Distribution of paper machine annual production rates comparing Japan with other T&T machines in the Asia Pacific Region.
Figure 4
Distribution of paper cash cost to the reel comparing Japan with other T&T machines in the Asia Pacific Region.
Figure 5
Asia Pacific Region Country level Cumulative Cost Curve Highlighting Japan.
Figure 6
T&T production capacity for the Asia Pacific Region highlighting Japan.
Figure 7
Tissue machine dispersion in the Asia Pacific Region highlighting Japan.
Figure 8
Production capacity at machine technical age. Bubble size represents the number of machines making up the Province production.
Figure 9
Japan T&T Fiber Base.
Figure 10
Japan T&T locations.
Data Tables behind the figures can be requested by email to Fisher International at [email protected]

Japan ranks 62nd in land area and 10th in the world population (126m plus) with an economy that experienced high growth in the 1960’s – 1990 but has been struggling since. Pulp and paper businesses mirror the general growth pattern with many machines coming online during the high growth years. Recapitalisation falls in a similar pattern as evidenced by machine average technical ages being greater than 25 years. The geography of Japan is extremely diverse, ranging from tropical to cool Northern with much of the area rugged mountainous terrain. Japan is also a seismically active area experiencing about 1,500 events annually.

The coastal population centers are susceptible to quakes, tsunamis and typhoons. The latest disaster happened in March 2011 when Japan experienced its strongest ever earthquake and an accompanying tsunami devastated the Northeast part of Honshu Island. Towel and Tissue production is geographically dispersed with a major concentration in the Fuji area (Figure 10). Several mills there and elsewhere were impacted by the quake and tsunami. Both in Japan and the remainder of the Asia Pacific Region tissue machines are the relatively narrow two to three meter class machines (Figure 1) with capacities of less than 20,000 mty. Over 60% of the Asia Pacific machines are in this category as are the machines in Japan (Figure 3). Machine technical age population (Figure 2) shows a significant difference between Japan and the remainder of Asia Pacific Region. Japan has 95% of its machines with technical age’s over five years where the remainder of Asia Pacific has less than 35% of the machines in this range. Looking purely at paper costs (Figure 4) in Japan runs high compared with the rest of the Asia Pacific Region (Figure 4) with more than half of the mills in at the high end of the cost curve. This places Japan’s overall cost position in the Asia Pacific Region (Figure 5) nearly at the top cost benchmark position. Non- integrated tissue mills, energy and labour in Japan are driving much of the very unfavorable cost position.

By-country tissue production capacity (for mills making >50T/D) in the Asia Pacific Region is dominated by China with Japan coming in second with a little less than 50% of China’s capacity. It takes the next three largest producing countries (Japan, Indonesia and South Korea) combined to reach production levels in the same range as China (Figure 6). The dispersion of machines (Figure 7) is consistent with the capacity numbers. China is the major player with 40% of the machines and Japan is second with 20%. Indonesia and South Korea combine for an additional 15%. By viewing the relationship of size, technical or apparent age and number of machines on a bubble chart Japan’s outlier position is clear (Figure 8).

The fibre base in Japan is similar to the remainder of the Asia Pacific Region in its high reliance of Kraft pulp. Both Japan and the region are also significant users of recycle fiber with Japan consuming the most at 35% (Figure 9).

Credit:
Fisher International, a consulting and information services firm delivering business and market intelligence to the pulp and paper industry, is pleased to be a regular contributor to Tissue World Magazine. Information contained in these graphs and charts come from the extensive pulp and paper database and cost benchmarking tools contained in FisherSolve™. FisherSolve is a Business Intelligence Automation System (BIAS), and serves as an innovative platform that integrates a company’s internal information with high-quality data on the marketplace and competitive environment. FisherSolve’s database describes every mill in the world making 50 TPD or more. The software is unique in its ability to serve sales, marketing, product development and management for both strategic planning and tactical implementation. FisherSolve is just one service Fisher offers to the pulp and paper industry. www.fisheri.com or email us at [email protected]