Chinese paper majors report increased sales amidst tough market

BEIJING (Scrap Monster):  Chinese paper giants have managed to post increased sales during 2014, amidst challenging environment. The industry has suffered badly from low prices and overcapacity issues during recent years. Despite all these, leading containerboard producers in the country have boosted their sales during the year. Moreover, the companies foresee a brighter future ahead of them.

Lee & Man Paper Manufacturing-one of the leading containerboard producers in China recorded total sales of 5.06 million tons. The net profit for the year 2014 amounted to $245 million. According to Raymond Lee, Chairman, Lee & Man, the demand for packaging papers in the country is likely to increase further in the coming years. The stricter environmental regulations by the Chinese administration may lead to closure of several inferior production facilities in the country. This will lead to consolidation of quality players, which in turn may result in significant improvement in the industry’s supply over demand situation.

The company also plans to increase its overall production capacities by either adding to existing facilities or developing new facilities. Lee & Man currently has a production capacity of 5.23 million tons of containerboard, 150 000 tons of pulp and 25 000 tons of tissue paper.

Meantime, Nine Dragons Paper -another major containerboard manufacturer announced significant jump in sales. The company’s overall sales grew nearly 7% during the second half of 2014. However, low paper prices impacted the profits, which fell by 28.7% during the half-yearly period to $110 million. The company expects a turnaround in the longer term. The tighter controls by administration may lead to closure of large number of outdated facilities, which in turn will enable stronger players like them, added the company spokesperson.