Mondi wants to join rush into paper-hungry China
October 11, 2005
By Margie Inggs
Durban - Mondi, the global pulp and paper group, was well positioned to take advantage of China's enormous potential for demand growth in the consumption of paper products, David Hathorn, the chief executive, said yesterday.
According to a PricewaterhouseCoopers report, the demand for paper products is rising four times faster in China than in Europe and North America.
The country used 54.4 million tons of paper and paperboard in 2004, almost 10 percent of which was imported, the report stated.
The Chinese government is encouraging foreign companies to expand to meet rising demand, prompting investments by Stora Enso, the world's biggest paper maker, Oji Paper, Asia Pulp & Paper Company and Sapper. Foreign companies accounted for 29 percent of the nation's $24 billion (R156 billion) paper industry in 2004.
Hathorn said the very cost-efficient operations and fibre availability in South Africa and Russia positioned the company extremely well to supply China's pulp and paper requirements.
"China is short of trees so it has a huge pulp requirement, which we will supply from South Africa, eastern Europe and Russia. We have already pursued this opportunity and are considering various projects."
Hathorn said China had a lot of paper making capacity but the value opportunity lay in its fibre requirements, which Mondi would supply, along with some paper. "We have also invested a small amount of money in packaging converting in China to test the water," he said.
Sappi expanded into China in October 2004 through a $60 million acquisition of 34 percent of low-end paper company Jiangxi Chenming Paper.
Jonathan Leslie, Sappi's chief executive, has said future efforts would include expansion in Asia, where Sappi has a 15 percent market share.
Sappi shares fell 4.08 percent to R65.99 on the JSE yesterday.
-Bloomberg
|
|
