Industry dealing with a sluggish economy

Chinese workers monitor paper production at a paper factory in Ningbo city, East China's Zhejiang province, April 13 2009. [Photo/IC]

The papermaking industry in 2014 is expected to remain slow in terms of growth due to the lack of stimulus policies for related industries, according to an industry leader.

Zhao Wei, secretary general of China Paper Association, told China Daily on Tuesday that the expected recovery in the first six-months of 2014 did not happen and the situation will remain stagnant in the second half.

Papermaking relies on many other industries as customers, said Zhao, saying the packaging of a refrigerator requires various paper products. But the slowdown in many industries this year has affected papermaking companies.

He said the slowdown in growth is natural after a decade of change and high growth, with some firms having to adjust to changes in the demand for paper products.

The association is giving guidance on the phasing out of outdated facilities and adjusting production capacities, in some cases eliminating products that are no longer in great demand to avoid overcapacity.

Last year, 3,400 paper and cardboard makers in the country produced 101.1 million tons of paper products, a drop of 1.37 percent year-on-year. The consumption of paper and cardboard products nationwide also experienced a decline of 2.65 percent.

Production of newsprint dropped 5.26 percent in terms of production volumes to 3.6 million tons and consumption fell to 3.62 million tons. Uncoated printing paper decreased 1.71 percent to 17.2 million tons, while consumption fell 3.38 percent to 16.27 tons. Coated printing paper production fell to 7.7 million tons, and its consumption dropped to 6.23 million tons.

Household paper products showed a slight growth of 1.92 percent to 7.95 million tons, and demand rose 0.41 percent to 7.34 million tons. Packaging paper fell slightly, with production down 0.78 percent to 6.35 million tons, and consumption fell 0.76 percent to 6.5 million tons.

Nearly 3,000 large-scale papermaking companies saw their revenues rise 5.91 percent to 757.5 billion yuan ($122.99 billion) and profits grow 6.95 percent to 37.4 billion yuan, but 400 companies, 13.67 percent of those surveyed, recorded losses.

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