How to manage the forthcoming fibre gap?
FIBRE DEMAND IN PAPERMAKING IN CHINA UP TO 2030
MILLION TONS
150
Forecast
100
Domestic RCP
The gap
50
Imported RCP
BHKP
BSKP
0 2000
2005
2010
2015
2020
2025
2030
shares of entire companies outside China. Buying up the majority of shares is necessary, since it is the only way to secure the availability of pulp. Changes have been made and seen within China as well. The country is trying to increase the efficiency of its domestic paper collection, even if the collection rate can no longer be increased by much. “There’s an attempt to improve the quality of recycled paper by sorting the waste where it is generated, much like in Finland. In addition, they’re trying to use the domestic sources of fresh fibre more efficiently. The use of bamboo as a raw material for paper has experienced a particularly steep increase.” HOW IS THE AVAILABILITY OF FIBRE SECURED? Just like the Chinese, all pulp users must secure the avail- ability of fibre in the years to come.
According to Amberla, companies will intensify their cooperation with reliable pulp suppliers. This ensures the availability of pulp even when the demand for market pulp exceeds its supply. “It’s also possible that the so-called offtake deals will in- crease. In these arrangements pulp buyers participate in mill investments and undertake to buy a specific propor- tion of the mill’s production for an agreed price.” If an increasing share of the produced pulp is earmarked for pre-selected buyers with long-term contracts, the share of pulp in open market may decline. “If this happens, price fluctuation will grow. Sometimes you will be able to buy pulp at very cheap prices, whereas at other times, it will cost so much that you won’t be able to pass the cost on to your products. In such a case, compa- nies will have to figure out how to get pulp at a reasonable price exactly when they need it,” says Amberla. •
Teija Konttori Managing Director of the management consulting firm Vision Hunters. Vision Hunters provides strategic advisory services for the forest industry and energy sectors.
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