Papermaker sets eyes on Chinese forest holdings
(Shanghai Daily)
Updated: 2006-09-07 14:07 Stora Enso Oyj, the world's largest papermaker,
plans to triple forest holdings in China, making its largest timberland
investment outside Europe, as rising paper demand causes a shortage of raw
material.
Stora aims to increase its pulp-wood forest to 160,000 hectares by 2010, said
Kari Tuomela, president of the Helsinki-based company's forestry unit in China.
That's twice the size of New York City. Pulp, a mixture of wood and chemicals,
is the raw material for paper used in offices, catalogues, books and glossy
magazines.
China is the world's fastest-growing paper market, leading Stora and rivals
such as Oji Paper Co to invest about US$3 billion in high-speed papermaking
machines there in the past year. The government began encouraging overseas
investment in forestry five years ago to reduce reliance on world markets. Pulp
prices have risen 21 percent over the past year, Bloomberg News reported.
"It makes a great deal of sense to be involved in domestic fiber," said Linus
Larsson, Stockholm-based analyst at ABN Amro Holding NV. "China is a large net
importer."
The price of northern bleached softwood kraft pulp, a benchmark grade, has
risen US$123.65 a metric ton in the past year to US$708.37 a ton according to
Forest Web.
China overtook the United States as the biggest buyer of pulp in 2004 and has
long been the biggest importer of wastepaper, which is used as a pulp substitute
and to make cardboard boxes. Stora is one of the biggest foreign holders of
forests in China.
"China's demand for pulp is on an upward trend, and won't slow down till at
least the first quarter of 2007," Alf Henrik Gistren, the general manager of
Brazilian pulp maker Aracruz Celulose SA's Asian unit, said.
Aracruz, Latin America's largest pulp producer, exported 400,000 tons to
China last year, the largest amount after Indonesia's Asia Pacific Resources
International.
(For more biz stories, please visit Industry Updates)
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