Paper Purchase Limits in the West and Tightening Imported Pulp: Can Sichuan Bamboo Pulp Papermaking Open a New Window?

At 9:00 a.m. on October 9, the warehouse's green signal blinked twice. Si Kailin quickly put away the fried dough stick he had only half finished. That simple breakfast had already taken him an hour, and he joked that the remaining half might have to serve as lunch.

Si Kailin drives a forklift in the production workshop of Sichuan Fengsheng Paper Technology Co., Ltd. (Fengsheng Paper). His job is to move base paper from the warehouse to the workshop 200 metres away. Since June, that fast-paced routine has barely paused.

Shen Qunlin, administrative director at Fengsheng Paper, said the company has run at full capacity for months. With annual capacity of 150,000 tonnes of bamboo pulp and 180,000 tonnes of paper, its workshop ranks among the largest in Sichuan and across China. In a sense, it serves as a barometer for the country's bamboo pulp paper sector.

Fengsheng Paper is not alone. Bamboo pulp papermakers throughout Sichuan are running flat out. What is powering the surge? With a tailwind in the market, can Sichuan companies take off?

Imports of wood pulp and waste paper pulp have long faced restrictions; Sichuan has a relatively strong resource base and industrial foundation, leaving considerable potential.

Sichuan companies are ramping up, driven first by global supply falling short of demand.

Pandemic control, raw material shortages, higher freight costs and scheduling difficulties have tightened toilet paper supply in Europe and the United States since early this year. On September 23, Costco, the largest membership warehouse chain in the United States, once again imposed purchase limits on toilet paper. Some Canadian supermarket chains have adopted similar measures. This wave of paper purchase limits, including toilet paper, has spread across Europe and the United States.

At the same time, papermaking raw material supply has swung sharply.

China's papermaking virgin pulp comes mainly from wood pulp, waste paper pulp and bamboo pulp. Since the Natural Forest Protection Programme began in 1998, China's paper industry has grown more dependent on imported wood pulp each year; last year imported wood pulp supplied 25% of raw materials. Yet due to the pandemic and international emission reduction efforts, major wood pulp exporters have cut output since last year, sending prices up quickly. General Administration of Customs data show that in August this year China's pulp imports, mainly wood pulp, fell 3.5% year on year, while import value rose 31.5%. Waste paper pulp once supplied 35% of raw materials, but the ban on imported foreign waste has sharply reduced that share. A Chengdu Customs official said only a few materials such as sorted waste paper can still enter; waste paper scraps and waste paperboard are now prohibited under the new Catalogue of Imported Waste Management.

Fan Moubin, chairman of the Sichuan Papermaking Society and executive vice chairman of the Sichuan Paper Industry Association, said restrictions on wood pulp and waste paper pulp imports are long term. As decarbonization accelerates at home and abroad and environmental rules tighten, the gap in these two pulp sources cannot be fully closed in the short term.

Against this backdrop, bamboo pulp papermaking in Sichuan has found a new industry opening.

Chen Hongquan, director of the Industry Division of the Provincial Forestry and Grassland Bureau, pointed to resource advantages and industrial foundation. He said Sichuan has more than 18 million mu of bamboo forest, the largest in China. About two thirds can be harvested and processed, with theoretical annual bamboo pulp output reaching 3 million tonnes, while current capacity is below 1.2 million tonnes, indicating clear room for growth.

Sichuan's bamboo pulp papermaking industry began in 1990. It has since formed a cluster led by 14 major enterprises and built up substantial original technology and processes. According to the Sichuan Paper Industry Association, the province's bamboo pulp processing capacity accounted for more than 60% of the national total last year.

Beyond resources and industrial base, policy has also eased the way for bamboo pulp papermaking.

Fei Shimin, vice president of the Provincial Academy of Forestry, noted that bamboo is lower carbon and easier to harvest. Trees often need 20 to 30 years to grow, while bamboo matures in only three to four years and does not need replanting, making it better suited to low-carbon consumer trends at home and abroad. Unlike timber, which faces regional harvest quotas, permit requirements and post-harvest ecological restoration rules, bamboo harvesting does not require approval at every level.

Rising bamboo timber prices are squeezing profits, while environmental and energy requirements weigh heavily on smaller Sichuan companies.

Many executives at Sichuan bamboo pulp papermakers, however, are not celebrating.

The first factor is cut-throat competition within the industry.

In late September, several Sichuan bamboo pulp papermaking executives called Fan Moubin one after another, asking whether prices could be raised jointly and looking for allies. Higher imported wood pulp prices have pushed up raw material costs across the sector, narrowing processing margins, yet bamboo pulp papermakers are locked in a price war. Some can no longer hold on. Earlier, these companies cut ex-works prices for finished paper to win orders, not expecting bamboo pulp to climb so high.

Since early this year, bamboo timber purchase prices in some parts of Sichuan have peaked close to 1,000 yuan per tonne, while bamboo pulp prices have risen to 3,500-4,000 yuan per tonne, both record highs. By contrast, many producers' ex-works base paper prices are only around 5,500 yuan per tonne, just a modest rise from previous years. After deducting bamboo pulp transport, processing and wastewater treatment costs, processing profit per tonne of paper is at most a few hundred yuan. A survey by the Sichuan Paper Industry Association shows some companies are already showing signs of losses.

Apart from industry competition, strict environmental and energy requirements have long challenged the entire bamboo pulp papermaking sector.

On October 9, Zhao Lei, head of a Sichuan bamboo pulp papermaking company, stood before a weed-covered plot, visibly frustrated. If everything had gone smoothly, he said, the project would already be in production. Three years ago, the company chose a bamboo-rich area in southern Sichuan for a bamboo pulp papermaking line, but the project stalled at the environmental impact assessment stage.

Another Sichuan bamboo pulp papermaking executive shared a cost breakdown: last year, pollutant treatment accounted for 30% of total costs.

A person in charge of a large bamboo pulp papermaking company in southern Sichuan said a recent capacity expansion project received its quota only after local authorities shut down several other capacity projects. In his view, adding such large capacity again will be impossible in the future.

Fei Shimin said the problem lies in the small scale of Sichuan companies. After years of development, pollutant treatment technology for bamboo pulp papermaking has matured, but the huge upfront investment in equipment and facilities is beyond many companies' reach. A bamboo pulp line with annual capacity of 100,000 tonnes requires at least 200 million yuan in one-off pollution treatment investment, close to the cost of building the line itself.

Standardizing bamboo forest bases, differentiating products and cultivating leading enterprises to break through the environmental 'high-voltage line'.

How can the bamboo pulp papermaking industry move beyond its current difficulties?

The first move is to diversify R&D for end products.

Fan Moubin said cut-throat competition stems from product homogenization. Sichuan currently has 350 household paper processing companies using various bamboo pulps as raw material, but most focus on traditional toilet paper.

Product differentiation is the way to break that pattern.

On October 5, at Huajiazui in Xilong Town, Qingshen County, Meishan, the construction site was covered with green dust nets, enclosed by plastic barriers marking the countdown to completion, and cranes and excavators were still at work. This is the Bamboo Park project being built by Sichuan Huanlong New Materials Co., Ltd. Liu Weizhe, general manager of production and operations at Huanlong New Materials, said the park is planned for European, American and Japanese markets, using bamboo fiber to develop high-end household paper rather than only ordinary toilet paper.

Fengsheng Paper has a similar approach. Shen Qunlin said the company once focused on bamboo pulp and base paper, but now its product range is broader. In April this year, it completed and started Phase I of a slitting and processing project, adding 100,000 tonnes per year of slitting capacity, such as cutting large base paper reels into napkins.

The second move is to reduce costs.

A person in charge at the Provincial Forestry and Grassland Bureau said rising bamboo raw material prices are not entirely driven by wood pulp. Difficult harvesting caused by low-level bamboo forest base construction is a major reason behind higher bamboo pulp prices.

Li Hu, a farmer in Baijie Town, Naxi District, Luzhou City, said one adult labourer locally can harvest only 0.6 tonnes of bamboo a day, selling for just over 500 yuan. After deducting 230 yuan in daily wages, 15 yuan for meals, 30 yuan for bamboo transport, 200 yuan for planting and management including forest land transfer fees, and other expenses such as insurance for harvesting workers, little profit remains.

This has created an odd situation: the Provincial Forestry and Grassland Bureau estimates that bamboo pulp and bamboo timber prices have risen steadily this year, yet more than 60% of bamboo forest bases in the province are not being harvested.

Many industry figures are calling for Sichuan to integrate bamboo pulp papermaking resources at the provincial level and advance standardized construction of bamboo forest bases, so companies can stop internal friction and cut costs together.

Liu Weizhe said that at a 20,000-mu bamboo forest base in Qingshen, Meishan, the company guided rational interplanting, new variety replacement and scientific fertilization, basically achieving mechanized harvesting. Bamboo timber yield per mu rose from 1 tonne to more than 3 tonnes.

The third move is to address the environmental and energy 'high-voltage line'.

A person in charge at the Provincial Paper Industry Association suggested assigning some high-energy-consumption and high-pollution steps to leading enterprises, integrating existing resources to cultivate leaders, rationally distributing bamboo pulp processing capacity in main production areas, and providing appropriate subsidies for environmental protection facilities.

Some companies have found a circular production path. Liu Weizhe said they chemically extract and recover alkali from black liquor, then burn it with bamboo chips in a boiler to generate steam for biomass power generation. The project is designed to burn 1,000 tonnes of black liquor solids per day, with maximum generating capacity of about 24,000 kWh, basically meeting self-use electricity needs.

—This article is sourced from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378430.html