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Tissue cost decreased cause of the exchange rate



From:Paper Expo China            Date:2012-2-16


    

Same as our DMKprinted toilet paper, In China, The paper industry is relatively sensitive to the fluctuation of exchange rate. The reportment from DMK shows, Consideration from the cost, The exchange rate reform will reduce the relative import costs of the paper industry so as to enhance the benefits

Data shows, The raw material of Chinese papermaking industry long-term depend on import, the import wood pulp and waste paper accounts for nearly 40% of the consumed raw material,At the same time, China is also a big paper products importing country, The imported machine-made paper and paperboard is about 15% of the whole domestic consumption quantity.

DMK report shows, At present, In China There are only 20 forestry enterprise which are based on making the paper pulp. So the amount quantity and variety cannot be enough for the demand, We can only rely on the imports to make up for the gap, In China, Nearly half of the paper pulp and the waste paper which is used as the raw material for paper tissue making rely on imports. So, RMB exchange rate flexibility increases will no doubt bring the good condition to paper making industry.

First, the proportion of the wood pulp and recycle pulp for the raw paper material in China paper making factory is very larger. After the exchange rate reform, The enhancement purchasing power is in favor of reducing the importing raw material cost. If just considering the influence from exchange rate to the raw material cost, 2% RMB appreciation will cause the raw cost 0.51% decreased and gross profit margins 3.01% increased, The total profit will increase to 8.79%. Just for the imported paper pulp, the data shows that, From January to May of 2010, The cumulative number of paper pulp which imported into China is about 4.74 million tons, the total amount is more than $2.5 billion. RMB exchange rate flexibility increases, so that the import amount will undoubtedly decreased.

Secondly, In Chins, Most large paper machine rely on import, The strengthen
purchasing power of RMB can reduce the importing cost for the equipments.  In paper tissue industry, more than 60% of the investment in the fixed assets is equipment investment, and most are imported paper tissue machine equipment, Exchange rate reform will cause import equipment price reduced, and this will reduce the purchase cost of the imported equipment for the tissue making factory. While converted into the enterprise benefit, That is relative considerable as our printed toilet paper condition.

Finally, the current international pulp and waste paper price is also rising, The price of some international paper pulp rised nearly $200 per ton in the beginning of this year,The exchange rate reform will reduce the raw material purchasing cost.

 

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