Implications
Zhangiang Chenming is part of Shandong Chenming Paper Holdings Ltd. In 2008 their paper production capacity was over 3 million tons, turnover was EUR 2 billion and with 17,000 employees. This huge new paper machine will greatly increase their overall capacity and could push them into a leadership position as far as UFS and CFS are concerned. APP and APRIL are both also huge but their grades include packaging board, tissue and toweling. Building a new paper machine with this huge capacity is a tangible expression of what their growing middle class is expected to consume in the next decade. This machine is to be backed up by a greenfield pulp mill but it is questionable whether or not it can supply both long fiber and short fiber in the quantities required. It is not unreasonable to assume this machine will require many tens of thousands of tons of grades like acacia, eucalyptus and long fibered Radiata Pine and NBSK.
Analysis
Metso' press release listed this new machine's width as 11,150mm - equivalent to 439" or about 39" wider that the present machines running at the Fine Paper mills of APP, APRIL, Stora-Enso and UPM-Kymmene. The speed will no doubt be in excess of 4000 fpm (130 meters/min.). The daily production will be equivalent to dozens of the older, smaller, slower machines scheduled for closure over the next five years in Western Europe and North America. A quick calculation showed that 3 machines of this size and speed can consume all the production of a new world class, 1.3 million mt/day market pulp mill. The question begins to emerge "can the world's market pulp capacity keep up with his increase in pulp consumption"? The new proposed Gunns' mill in Tasmania has a price tag of $1.7 billion dollars. Financing of these huge amounts becomes the next question - after wood and water supply. The new machine ordered by Zhangiang Chenming is scheduled to be backed up by a greenfield pulp mill. Have the plantations already been planted? Will there be sufficient wood available in a timely manner to supply this new machine? Will outside chips have to be brought in? If the pulp mill will cook only acacia and eucalyptus chips, where will the necessary long fiber come from (about 20-25% of the fiber furnish)? These are valid questions and hopefully answers will soon be forthcoming. |
