GPMA Editor team

March 24, 2021

In China, demand for paper remains high, making China one of the most important markets for paper, whose volume of paper production and consumption has ranked the 1^st ever since 2009.

A Review of the 2020 China Paper Industry

1. More paper manufacturers suffered losses

As the Chinese government clamped down on pollution, paper makers found their lives harder. Small paper mills that caused heavy pollution were forced out of the industry, while others suffered great losses.

Paper manufacturers who found themselves in the positions of loss took up 18.7% of the total 6640 paper manufacturers; this is a 17% increase. While the total losses dropped by 19.5%, with the figure sanding at 8.36 billion yuan.

2. Paper industry on the whole had less revenue, but it’s temporary

Data from www.ASKCI.com showed that paper makers reported a total revenue of 1301.27 billion yuan, down 2.2% year-on-year.

A number of paper mills went bankrupt as a result of the rising environmental standard. But in the long run, paper mills who survived are expected to be more competitive and profitable. 

3. Gross profits saw an increase

In 2020, Paper mills’ total profits climb to 82.67 billion yuan, a 21.2% increase from the 68.19 billion yuan in 2019.

4. The Paper Industry has been more profitable

The paper industry has higher profitability in recent years. The gross profit margin in 2020 was 15%; return on sales was 6.4%, up from the 4.9% ROS in 2017. 

A Prediction of the 2021 China Paper Industry

1. Corrugated packaging goes in line with the green trend

China’s economy is bound to go low-carbon and circular; that asks packaging products to be more energy efficient, environmentally friendly in every step of the way, from production to recycling. And corrugated packaging checks every box. It’s light, recyclable and degradable. Plus, it can be rigid, making it a perfect substitute for wood and plastic packaging; that is why the government has already started encouraging businesses to use more corrugated packaging.

2. Industrial Packaging and corrugated packaging have large potential demand

Owing to a stable macro economy and multiple favorable policies, most industries in China are in full swing, including information, chips, communication equipment, machinery, automobile, medicine, consumer goods, food and beverages and so forth. This means a robust future demand in various packaging products.