Recruiting in China

A cardboard-box maker in Huaying, Sichuan province. The paper industry is on the upswing in China due to rising demand from e-commerce companies.

Research facility plays key role in Finnish paper chemicals firm's sustainability plans

At a temperature-controlled Kemira laboratory in Nanjing, capital of Jiangsu province, one can find lab workers and technicians huddled over consoles and machines taking notes and entering measurements in carefully calibrated charts.

Most of the research and work at the laboratory is centered on developing additives for water-intensive industries such as the paper industry. Situated in Nanjing's chemical industrial park, it is just one of the many research institutions that is working on cutting-edge technologies for paper and pulp manufacturing industries.

Research findings from the Nanjing laboratory have already made a big difference to the Helsinki, Finland-based Kemira Oyj, the world's largest paper chemicals maker. According to company officials, the new findings have helped Kemira boost annual output by 100,000 metric tons, especially at a time when most of its peers are downsizing production.

Jari Rosendal, president and CEO of Kemira, told China Daily that though the global paper industry has shrunk in size due to less use of printing and writing paper, it is on the upswing in China due to rising demand from e-commerce companies.

"You have no idea of how much it (China) means to the packaging industry," he said. "On days when people go on an online shopping spree, billions of cardboard boxes are consumed."

While online shopping is just one part of the growing demand in China, the other centers on the growing use of paper tissue products. Demand has risen for paper tissue products ranging from basic sanitary paper to niche products like waterproof kitchen paper towels and recyclable tissues, said industry experts.

China has tripled its paper production capacity in the last 10 years, and in 2009 zoomed past the United States as the world's biggest papermaker. The size of the industry can be gauged from the fact that China's three weeks of paper output now equals the entire annual output of Wisconsin, the top papermaking state in the US.

Rosendal said that along with economic growth, China's demand for paper and pulp products has grown quickly in the past decade, but the market is not growing as fast as in the past, as people are going online for news and information, thereby using less printing paper.

Niu Qingmin, president of the Paper Industry Association in Jiangsu province, said that the slowing growth in China's paper industry is a reflection of a so-called periodic excess capacity.

"China's paper industry is going through a period of deep restructuring, because we developed too fast in the beginning, even at the expense of our environment," he said.

"If the highly polluting factories are shut down, it will leave more room for the development of regulated companies. In such a scenario, overcapacity will no longer be an issue," he said.

Niu said that China's paper market will maintain steady growth in the long term, especially in the packaging and tissue sector.

The Finland-based company said it plans to offset losses in stagnant markets like Europe, by focusing on packaging, paper boards and paper tissue business growth in Asia.

Rosendal said that Kemira has more than doubled its capacity in China after setting up the Nanjing facility.

"It is quite an aggressive expansion in China, considering how much we generated for the past year."

The chemicals company raked in about 100 million euros ($124.7 million) in China in 2013, and it plans to invest $100 million on the Nanjing unit, which will be the largest of its kind in Asia.

Kemira acquired the Netherlands-based AkzoNobel's global paper chemicals business in July to help double its paper chemicals business in Asia Pacific, and expand its geographic reach and product portfolio.

"We don't just go around buying up companies to show how big we can get. It is a requirement of the market," Rosendal said. "We believe both production and demand will continue to grow in the world's largest paper market."