The use of household paper is finally beginning to increase.

        Chinese consumers’ interest in luxury goods is well known, but enterprising manufacturers are now struggling to capitalize on their private interest in the other amenities of modern life. In the country where paper production was invented, the use of household paper (including facial tissue, wet wipes, paper cutlery and toilet paper) is finally beginning to increase.
        Paper production, along with gunpowder, the compass and woodcut printing, are known as one of the four great inventions of which the Chinese are proud. More than 1,900 years ago, Cai Lun, a court eunuch of the Han Dynasty, invented a process for making paper from tree bark and silk. Less known is that China invented toilet paper (toilet paper) in the 6th century before the Tang Dynasty, long before modern toilet paper became available in the United States, with inventor Joseph Gayetti first making it in 1857. Sold in the United States. .
        However, in ancient China, paper was mainly used by literati and court artists to create exquisite works of art. Today, ordinary Chinese can afford a variety of paper products for daily household use. However, compared with developed countries, China’s household paper consumption is still low. In 2012, China’s per capita consumption of household paper was 4.2 kilograms, higher than 3.9 kilograms in 2011, but still lower than the world average of 4.4 kilograms. US investment bank Jefferies cited data from the China Fabric Manufacturers’ Association that per capita consumption lags well behind Hong Kong’s 10 kilograms, Japan’s 15 kilograms and North America’s 24 kilograms.
        But despite the recent mixed macroeconomic situation in China, overall consumption is still trending upward. The latest economic report for the second quarter of this year released by China’s central bank shows that national retail sales rose 12.1% year on year and increased 10.8% after subtracting inflation factors.
        That’s why China’s leading toilet paper makers are doing well, thanks to China’s expanding middle class and their growing interest in improving their daily lifestyle. While 16 of the country’s 23 listed paper producers, whose products are mainly used for industrial purposes such as containerboard and packaging, experienced decreased sales or direct losses, Hengan International, Vinda International (of which Svenska Cellulosa AB acquired a 51% stake last year) and C&S Paper are thriving.
        The China Household Paper Association estimated that all three companies’ revenues increased year-on-year: Hengan International rose 15.2% to HK$10.415 billion, Vinda International rose 14.8% to HK$3.31 billion, and Zhongshun Paper grew by 4.6%. Results for the first half of 2013 amounted to $1.14 billion. Global giants Kimberly-Clark and SCA (which acquired the hygiene brand from P&G in 2007) are also active players.
        Early Chinese hemp fiber paper, used for packaging rather than writing, is on display at the Shaanxi History Museum in Xi’an, China. Discovered in the tomb of Emperor Wu of the Han Dynasty (140–87 BC) in Baqiao, Xi’an. Photo: Yannick Trottier, 2007 (Image source: Wikipedia)
        The growing fortunes of tissue paper have not escaped the attention of industrial paper manufacturers, whose rush to enter the industry could lead to overproduction even before new competition enters the market. Manufacturers typically have to wait two years to purchase and install equipment before fully switching to tissue production.
        Xu Lianjie, CEO and founder of Hengan International, an industry leader, said household paper is the most profitable business in the paper industry. “Even before new competitors entered the market, the market was already suffering from oversupply. It had an impact. We are still growing, but we will have to delay introducing new production lines.” He said Hengan would cut its original target of 360,000 this year.” Ton capacity expansion reduced to 120,000 tons.
        Yang Zhengming, head of consumer research for Greater China at Standard Chartered Bank, said: “The household paper industry has passed its growth peak. Chinese consumers are now turning to buying higher quality products, just as they once did with beer. Competition from new entrants. “Intensification will squeeze industry profits, but it remains a market that the big players and their competitors cannot afford to ignore.”
        Although China is the inventor of paper, not all manufacturers have the most advanced papermaking technology. “There are very big differences in this regard. There are still many factories with hundreds of employees and low levels of automation. Many companies, such as Hengan, Vinda and others, are highly modernized and automated, but especially the old state-owned or provincial factories. may have completely different levels of automation and more manual operations, especially transportation, packaging and storage,” said Esko Uutela, chief organizational economist at industry consultancy RISI.
       This just goes to show that while Chinese paper makers may be proud of their number one position, they cannot rest on their laurels.