PwC: China to pluck global paper top spot from US by 2015

China is expected to overtake North America as the largest producer of paper and board products by 2015, according to a PricewaterhouseCoopers (PwC) survey.

Chinese firm Nine Dragons Paper, for example, said it planned to take its packaging capacity to more than £4.9m (US$10m) by 2010, making it the largest containerboard producer in the world.

In spite of this, the Chinese producer is currently in 82nd place in PwC's latest Global Forest, Paper & Packaging Industry Survey, which tracks the financial performance of the Top 100 forest, paper and paper-based packaging companies.

"The top 100 firms currently and for many years to come will continue to be in North America and Europe," said Clive Suckling, forest paper and packaging leader at PwC.

However, they are under pressure to improve their returns from existing assets in the face of the prolonged depreciation of the US dollar against major world currencies, continuing oversupply and increasing energy, transportation and raw materials costs, he said.

"There are some good stories if you scrape away several layers, particularly in the emerging markets," said Suckling. "The capacity plans of Nine Dragons Paper, for example, are stunning. In addition, Brazilian producer Klabin is now the largest producer of corrugated in South America."

Latin America led the way in terms of return on capital employed, at 9.3%, followed by China (6.5%) and South Africa (5.5%). Canada's producers had the lowest return at 2%.
Source: packagingnews

"For the big firms in North America and Europe, the average return on capital employed was 5.1% in 2006, which doesn't cause any flag-waving," said Suckling. "They're not creating value."

The top 100 firms increased their sales by 5% to £175.2bn in 2006, with the number one spot held by US-based International Paper, which had sales of £10.8bn.

Europe posted combined sales of £55bn in 2006, up 10.8%, with Finland-based Stora Enso leading with sales of £9bn.