1 Paper Industry Profit Area Analysis Some enterprises in the paper industry are profitable, and some enterprises are losing money; some enterprises in the same industry are profitable and some products are in loss. Therefore, it is the key to properly formulate the development strategy of the paper industry by carefully studying the profit zone of the industry and understanding the value transfer rules of the product.
At present, the profitable products in the paper industry are concentrated in high-end products, such as coated paper in coated printing paper, lightweight coated paper, high-strength corrugated base paper in coated paper, coated white paperboard, and white cardboard. These papers currently have a large market demand, and they have a large share of imported paper. Foreign companies investing in factories in China also produce these high-end products.
High-end products are the profit zone of the industry, which is determined by the characteristics of the papermaking industry, the characteristics of the consumption of products, and the higher barriers to entry in the paper industry.
1.1 Process Characteristics of the Paper Industry Analysis Papermaking industry has strong process stability, and the basic process flow is unchanged for decades; most products have national and industry standards; production equipment is highly specialized, and a single paper machine generally produces only one type of product. Even for decades, only one type of paper is produced; the use of paper is unchanged for years. This production process and the characteristics of the production equipment lead to fewer new products in the paper industry, unlike the home appliances or toy industries, which have more varieties and faster product changes. The new products in the paper industry are mostly the upgrading of the original products, which is the improvement of the paper quality, and its original use is basically unchanged, which makes the high-end new products less risky in the market, and is profitable. Great success.
1.2 Product Consumption Characteristics Analysis Paper industry products have strong specificity, little complementarity, and low product price elasticity. 80% of paper products are used as raw materials for industrial production processes, such as printing for newspapers and magazines, and packaging for general consumer goods. In this way, for consumers, the value of paper products is not directly reflected in the value of the unit product, but is included in the overall value of consumer goods, such as printed magazines and magazines, household appliances with carton packaging. When paper products are shipped from the factory, they are marked with the price per ton of paper. When they are used, for example, when they are made into carton boxes for packing home appliances or the paper made of packaging wine bottles, their value is of the value of the entire product. The proportion is very small, only accounting for less than 1% of the total value of the product; for example, for coated paper for magazine covers, the difference between mid-range quality and high-grade coated paper is up to RMB 1,000 per ton. This difference is spread to one. In the magazine, it was less than 1 cent, but the effect of printing was very different. This consumption characteristic of paper products provides market opportunities for the industry to launch high-end paper products.
1.3 Characteristics of the Industry's Barriers to Entry Papermaking industry projects have large investment, high technology content, long project construction period, and high-end product production equipment must be imported from abroad. These characteristics form a high entry barrier for the paper industry. Therefore, when a company develops new high-end products and obtains higher profits, it takes a long time for other competitors to obtain the same advantages. This gives enterprises that have taken the lead in producing high-end new products for a longer period of time. Profit opportunities.
From the above analysis, it can be seen that the main profit area of ​​the paper industry is in the high-end product market.
2 Paper Industry Value Transfer Rule Analysis Any product has a life cycle and generally undergoes the process of introduction, growth, maturity, and recession. The profitability of a project also has a life cycle, which is the value inflow period, value stabilization period, and value outflow period.
The value transfer rules for papermaking projects are analyzed as follows:
——Inflow of Value: New high-end products have been developed to replace the old ones. They are welcomed by consumers and are in short supply. They are influenced by the relationship between supply and demand. The prices of products are relatively high, and the enterprises are profitable. The project is in the stage of value inflow.
——Value stabilization period: Competitors have also started to create new high value-added products. The supply and demand relations in the product market have been gradually balanced. The price of products has declined, the level of corporate profits has been normal, and the project is in a period of stable value.
——Value outflow period: There is a new round of upgrading and upgrading products in the market, and the market’s demand for the products of the current project has dropped. This has led to the oversupply of the products in the industry, the falling prices, the loss of profitability, and even losses. The project is in the outflow period of value.
In the process of value transfer, the paper industry has two differences in value transfer from other industries. First, due to the high entry barriers in the industry, after the new products are put on the market, the relationship between supply and demand changes slowly and the value transfer cycle is longer. That is, the profitability of new products is longer. Second, as new product development in the paper industry depends not only on equipment, but also on raw materials and auxiliary processing technology, when the industry is in a period of value stabilization or value outflow, technological transformation of existing equipment and adjustment of raw materials and auxiliary processes are required. (Such as surface coating), that is, at a relatively small cost, the project can be re-entered into the value inflow period.
Therefore, the paper-making enterprises can only obtain higher returns and maintain the vitality of the industry.
3 Advantages and Disadvantages in the Development of China's Paper Industry 3.1 Advantageous Factors 3.1.1 Social demand for high-grade paper provides enterprises with new economic growth points. With the development of press and publishing, cultural undertakings, and packaging industry, the amount of paper is used. Continuous improving. What is more important is that society has put forward new requirements for the quality of paper. The stimulating of consumer demand provides an external motivation for the company to carry out technological transformation to realize the upgrading of products and to obtain greater profits.
3.1.2 The world's most advanced equipment can be purchased to provide enterprises with a leapfrog in the development of materials. The papermaking industry is equipped with complex technical equipment and high technology content. However, foreign countries have no artificial restrictions on China's papermaking equipment. As long as funds are available, China can buy the most advanced equipment in the world. This provides an opportunity for China's paper industry to catch up with the international advanced level.
3.2 Unfavorable factors The two key factors constraining the development of China's paper industry are the shortage of fiber materials and project construction funds.
China is a country that uses non-wood fiber as its main papermaking raw material, while papermaking raw materials for the world’s papermaking powers are dominated by wood fibers. The lack of wood fiber resources is the main reason why China's paper products do not go up.
The shortage of funds for project construction is another constraint on the development of China's paper industry. As a capital-intensive industry, the pulp and paper industry needs 100 million to 200 million yuan of capital for each additional 10,000 tons of high-end products. It is predicted that from now until 2010, China's paper industry needs to invest at least 200 billion yuan in order to meet the requirements of production development. Such a large sum of money is huge for both the country and the enterprise, and it is difficult to raise funds.
4 Selection of development models for pulp and paper companies Enterprises should use their own strengths, play comparative advantages, adopt differentiated competition strategies, and insist on doing something or not, and appropriately choose the development mode of development (see Table 1).
Table 1 Appropriate model for enterprise development strategy Product type Product with large market capacity High-grade products such as coated paper with wood pulp as the main raw material should be intervened by a few companies that are supported by the state, and should adopt a high starting point, large-scale, one-step jump development strategy.
Such as high-grade wood grain base paper, powerful companies can try to intervene and should adopt a centralized market segmentation strategy.
The middle and low-end products such as writing paper, which uses straw pulp as the main raw material, are the basis for the development of most domestic enterprises. A follow-up development strategy that focuses on the upgrading of the market should be adopted.
Such as yellow cardboard, a small number of low-level small businesses can intervene and should adopt an abandonment strategy.
4.1 The leap-forward development of a few key enterprises Papermaking will directly enter the high-end new product market for a small number of paper-making enterprises supported by the state, and pursue a leap-forward development strategy in one step.
——Product positioning: High value-added high-grade new products with wood pulp as raw material and deep processing after coating.
- Market positioning: Substituting imports and exporting to neighboring countries.
- Price positioning: Rouge method pricing strategy, the price is high.
- Production equipment: Direct purchase of the world's most advanced equipment, production capacity to reach 300,000 tons of economies of scale.
The high-end paper product market is the profit area for the paper industry and is also the focus of competition among foreign companies. A few key enterprises that need to be supported by the state should intervene. The issue of funds and raw materials should be assisted by relevant parties in the country.
4.2 Follow-up development of most enterprises Follow-up development refers to the follow-up of changes in the consumer demand of the paper product market. For ordinary paper-making enterprises, we must focus on the upgrading of medium-to-high-end products in the large number of medium and low-end products in the consumer market, and make enterprises enter the value inflow period through technical transformation, increasing the proportion of wood pulp, and deep processing.
China lacks forest resources, but non-wood fiber resources such as reeds, rice straw and bagasse are abundant. At present, China's wood pulp raw materials account for 17% of papermaking raw materials, waste pulp raw materials account for 41%, and straw pulp raw materials account for about 42%. As foreign products are mainly wood pulp, imported paper is mainly wood pulp-based high-grade paper. In the middle and low-end market, domestic products are still the main products. This type of paper, which is mainly made of straw pulp and supplemented with a small amount of wood pulp, is of good quality, can meet general writing and printing requirements, and its prices are highly competitive. force. Therefore, domestic companies should firmly occupy this market, which is the root of most companies' survival.
4.3 Development of market segments with high-end, small-paper grades The leap-forward development and follow-up development is designed for enterprises to produce products with large market capacity, such as coated paper with an annual consumption of 1.8 million tons and annual consumption of 3 million tons. Coated white paperboard. For some specialty papers, due to their relatively small market capacity, the total profitability of the project is small, so foreign companies generally do not invest and build factories in China alone. For this type of high-end small paper, the total investment of the project is relatively small, and the ship is relatively small. Once the market changes, it can be withdrawn quickly, and the production of other varieties is changed. The risk is small, so companies with certain strengths can try to get involved. This market segment. 5 Organization of Recycling Resources The current focus of the Chinese papermaking industry is to address two major obstacles to the development of the industry - the shortage of wood fiber resources and project construction funds.
5.1 Construction of artificial fast-growing forests to solve the shortage of wood fiber resources In recent years, the rise of fast-growing and high-yield forests has provided solutions for the rapid development of forestry resources. There are two kinds of forestry resources, one is ecological forest and the other is industrial forest. Industrial forests can be planted with fast growing forests. However, due to the strong planning of the use of forestry resources by the State, there are limit indicators for forest harvesting, and higher taxes and fees for forestry, making the development of industrial forests slower. In order to support the construction of artificial fast-growing and high-yield forests and to protect the enthusiasm of building industrial forests, the relevant government departments are considering adopting the following specific measures:
(1) Separate the felling indicators of industrial forests so that forest growers can timely cut trees for papermaking after they mature. This will promote the enthusiasm of paper-making enterprises to build artificial forests and truly realize “forest-paper integrationâ€.
(2) To reduce the burden of taxes on the construction of industrial forests and to mobilize the enthusiasm of forest cultivation in all sectors.
The country has now implemented pilots in Anhui Province and has reduced the number of artificial forests.