Behind the most popular overpressure paper war

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Behind the overpressure paper war

recently, Chenming Paper (000488) invested 2.456 billion yuan to build the first 300000 ton super calendered paper production line in China, which has entered the equipment commissioning stage and is about to be put into production; At the same time, Huatai Paper (600308) and Yueyang Paper (600963) also stepped up the pace of catching up. The 200000 ton overpressure paper production line jointly built by Huatai and Stora Enso group, a global forestry paper integration giant, was started on October 8 and is planned to be put into operation in 2007; Yuezhou paper claimed to invest 1.88 billion yuan to build a 400000 ton overpressure paper project, which is planned to be put into operation in 2008

this fight among the three giants has made the atmosphere of "overpressure paper war" suddenly tense before the war. Since the beginning of this year, the originally profitable paper has been hit by the saturation of domestic demand and the rising price of foreign raw materials, and the profit margin has been declining all the way. In order to grab new profit space, the three paper giants have to turn to the "last piece of cake" among domestic paper varieties - Super calendered paper

"cake" is huge and coveted.

how much excess profit does this new paper have? The data shows that the proportion of wood pulp fiber in the raw materials is reduced and the cost is reduced due to the addition of fillers in the paper; At the same time, due to the super calendering process, the paper can obtain good printing properties such as smoothness and gloss, and the a + grade overpressure paper can replace the lightweight coated paper for printing high-grade books, newspapers and magazines

Yuezhi claimed in the announcement that it is expected that the annual average sales revenue during the production period will be 1887.05 million yuan and the total annual average profit will be 410.25 million yuan. According to the preliminary calculation, the annual average gross profit rate is 21%

according to the data of the three quarterly reports, the average gross profit margin of each paper type since this year is 15.5%, far lower than that of the same period last year. Among them, the gross profit margin of paper decreased by nearly 10%, only about 17%. As the import price of wood pulp is gradually rising this year, and China, as a country lacking wood, has a limited supply of independently produced wood pulp, the production cost of paper-making enterprises is gradually increasing, and the space for gross profit margin is gradually compressed

it is reported that the main printing paper products in China at present are paper, double offset paper, low weight coated paper (hereinafter referred to as light coated paper) and coated paper. Their wood fiber content gradually increases, and the printing quality and product price also gradually increase. However, due to the faster rise of the cost, the gross profit margin gradually decreases

zhaotao, a researcher of Haitong Securities paper industry, estimates that the cost of super calendered paper using calcium carbonate as additive is only a few hundred pieces per ton, which is far lower than the cost of waste pulp of about 2300 yuan. According to this calculation, the cost per ton of super calendered paper is 12% lower than that of paper, but the price is 13% higher

market wait-and-see prospect blurred

however, how much market space can this new paper have in China

according to the data of the National Press Association, in 2005, 5.24 million tons of paper were used for publishing books and newspapers, of which about 73% were used for newspapers and 5.61% for magazines. However, in 2005, the total number of printed papers increased only slightly, and the total number of printed papers in most parts of the country decreased instead of increasing. In Beijing, the total number of printed papers increased only slightly by about 3%. In terms of magazines, the total circulation has not increased significantly, but the paper consumption of each issue has increased

xiatianjun, an expert consultant of the printing Committee of the National Press Association, pointed out that according to the current situation, the book and newspaper paper market is unlikely to grow significantly this year and next, and may basically maintain the growth rate of about 5%. The new demand for newspaper paper (paper) is about 200000 tons, and the magazine paper (lightly coated paper) is about 20000 tons

chendefa, vice president of Zhejiang Newspaper Association, said that most newspapers have experienced the expansion and restructuring in 2004, and now they have entered a stable period, and the layout will not increase; Newspapers lose money in distribution. Some newspapers even lose more than one yuan in distribution, so the total distribution is unlikely to increase; The only way for the newspaper industry to increase its revenue is to provide space to advertisers. Since this year, the advertising space has decreased significantly

in addition, network media, including various comprehensive stations, professional stations and newly emerging e-magazines, are competing with traditional media for audience, advertising and profits. The recession of the newspaper industry has led to a sluggish growth in paper consumption, and the market itself has shown signs of shrinking

Zhaowei, Secretary General of China Paper Association, said: "there was no (overpressure paper) in China before. Once it was produced, how many newspapers and periodicals would be willing to change it? Even if the price is low and the quality is good, the market demand is slowly cultivated. When can a certain scale of demand be formed, enterprises and the market have to 'push' together."

take reader, the magazine with the largest circulation in China, as an example. This semimonthly magazine, with a circulation of 8million, has about 60 pages in each issue. The text printing part is offset paper. This paper has good inkability and the price is less than 4500 yuan/ton. It is not a substitute for super calendered paper; The advertising inserts, covers and pictures are coated paper, with about 10 pages per issue. The current price is about 6500 yuan/ton, which is a substitute for a+ grade paper in super calendered paper. The relevant person in charge of the magazine said that whether the overpressure paper will be considered in the future depends mainly on whether the printing quality similar to that of coated paper can be achieved

it seems that the production of super calendered paper does have a large excess profit space, but without strong market demand, no matter how large the profit space can only become a castle in the air. So, how to solve this contradiction

as the overpressure paper with the most difficult production process, but also the largest profit margin, it has not yet been produced, and it has fallen into a "self contradiction": on the one hand, the market demand is uncertain, and the wait-and-see attitude of newspaper bosses makes it more confusing; On the other hand, the profit margin of overpressure paper is huge, which has attracted paper-making enterprises to take the lead

supply and demand may be unbalanced

high grade overpressure paper is mainly used for printing magazine color pages and supermarket advertising loose pages. If the production capacity of Chenming, Huatai and Yuezhou paper is calculated according to the current published capacity, the country will produce 900000 tons of overpressure paper in 2009; Even if calculated according to the upper limit of the growth rate of 10% in recent years, the national magazine paper consumption is only 400000 tons, and the remaining 500000 tons of gap is difficult to be filled by supermarket advertising paper

does this mean that overpressure paper will inevitably lead to an imbalance between supply and demand? Papermaking experts pointed out that enterprises all hope to occupy the excess profits of new types of paper, so they step up investment and engage in "capacity competition", which will inevitably lead to capacity expansion, imbalance between supply and demand, and even impact on the existing product layout

Guoyongxin, an expert in paper industry strategy, pointed out that looking at the development of paper products at home and abroad in recent years, it can be found that China's paper varieties have been slower than those abroad. The year of 1996 was the fastest development period of foreign paper, the year of 1998 was the fastest development period of coated paper, the year of 2000 was the fastest development period of coated paper, and the year of 2002 was the world of overpressure paper; In China, paper developed fastest in 1998, and coated paper only in 2000. These two kinds of paper were just one step higher than the development of foreign countries, and the peak of accelerating the transformation and upgrading of key materials was delayed for two years

in this way, when there is no new product produced in China, the products of foreign enterprises will be exported to China to obtain higher profits in the domestic market; After domestic enterprises found that foreign products were profitable in the domestic market, they began to build new projects. The first enterprise to build made a lot of profits. However, after the projects of many enterprises were completed, the overall supply capacity in the market was improved, and the market price came down. In order to continue to occupy the Chinese market, foreign enterprises sold at low prices to the domestic market, thus putting domestic enterprises in trouble. Chinese paper and coated paper have gone through such a process

now the overpressure paper has to follow such a cycle. The law of value transfer in the paper industry shows that high-end new products are where the profit zone lies, and the key to obtain high profits is to keep the product development in step with the world. Therefore, Chenming, Huatai and Yuezhi have invested heavily in the hope of starting new projects first and seizing the highland of excess profits; On the other hand, the introduction of new paper will have an impact on the current paper market. As there is a certain substitution between overpressure paper and paper, low weight coated paper and coated paper, for enterprises with relatively complete product system, if the market sales of overpressure paper products they enter is not good, the risk goes without saying; If the market sales are good, it will have a certain impact on the existing paper and low weight coated paper market of the enterprise, forming a negative impact

strategic layout in advance

although the capacity competition that has begun has made it difficult for enterprises to ride the tiger, the specific test steps are as follows: however, when dealing with the possible imbalance between supply and demand and the future of weak market, enterprises still have their own small abacus

fanyingjie, head of the capital operation section of Chenming paper, said that although the first overpressure paper production line built by Chenming is about to be put into production, it mainly produces paper in the early stage. "The current market situation, that is, if the driving load of the same size is not obvious, the market demand for overpressure paper and the profit margin of new paper types are unknown."

Yue paper, whose production line will be put into operation in 2008, also said that the production of overpressure paper depends on market demand

chiyuxiang, director of Huatai office, made it clear that overpressure paper would be produced. "We have a production scale of 200000, about 40%-60% of which are exported. Now we have some orders. Our partners have the advantage of sales channels."

the enterprise has invested a huge amount of money to introduce overpressure paper production equipment, but when it comes to production, it "steals the beam and changes the column" to produce other kinds of paper. Zhao Wei, Secretary General of China Paper Association, pointed out that in order to obtain national approval for newly applied projects, enterprises often improve the technical level of application, and whether to produce high-grade products after completion depends on market conditions

in his opinion, Chenming's caution shows that enterprises are worried about overpressure paper: "A production line can easily reach tens of billions of yuan. Enterprises are heavily in debt. What can they do if their products can not be sold at a high price? No enterprise would be such a fool. Enterprises declare to invest in the establishment of overpressure paper production lines, but if they do not install calendering process equipment, the fixed investment cost can be greatly reduced, and they can produce other kinds of paper to reduce the risk. I am afraid that it is impossible to change the production strategy to produce calendered paper when the market opportunity is ripe The intention of most enterprises. "

however, guoyongxin believes that it is better to take the lead in cultivating the market by relying on this means to avoid market risks and wait for the market to warm up. He said: "Foreign paper enterprises and domestic and foreign-funded paper enterprises have launched fierce competition with domestic paper enterprises. It is not feasible for enterprises to wait for the market to mature. China's paper industry has entered a new era of strategic success from winning production. The supply of products exceeds the demand. The time when the scratch resistance of products has been greatly improved and can be sold as long as they are produced is gone. If enterprises want to achieve rapid development, they must face the future to find new market opportunities and cultivate talents Cultivate the market and do a good job in the study of operational competitive strategies. "

reprinted from: China Securities Journal

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