Pulp and paper industry in Russia is increasingly dependent on China

Supply in China of Russian pulp producers bring it every year hundreds of millions of dollars. The influence of this country as the main importer of Russian pulp increased, and today the Chinese consumer alternatives in Russia. As with other suppliers in the world. China provides a major increase in world consumption of pulp (70%) and is a major importer from Russia. Over the past few years (and in the pre and post-crisis periods) it needs remain the primary determinant and indicator of the global market. It is a growing demand from China has saved the world pulp and paper industry in 2009 and contributed to its stabilization in 2010. Speaking of Russia, that, according to the Federal Customs Service (FCS), exports of wood pulp in 2010 compared with 2009 increased by 59.2% to $ 1.03 billion in kind figure was 1.7 million tonnes , of which China had delivered more than 800 thousand tons, about half of the total. The Chinese market, the Russian producers have earned about $ 500 million this year, China's share has increased due to price increases (30% in 2010) and exports. Only in January-February 2011 Russia supplied China 133 thousand tons of pulp, which is 36.1% higher than last year. Export volume of money - $ 110 million is 79.9% more than in January-February 2010. Our all. According to Olga Deulina, an independent analyst in forestry for many years, China - the main country to export Russian pulp. There is a non-diversified client portfolio in the entire industry. "There goes about 50% of the total domestic production, - she said. - And Russian companies are constantly in danger of falling demand from China. " The group "Ilim" is Russia's largest supplier of pulp to China and ahead of the rest by a large margin. In general, the market share of more than 60% is logical for the largest producer of the country. In 2009, the subsidiaries are located in Bratsk and Ust-Ilimsk Irkutsk region set a record, shipped to China more than 1 million tons of pulp and paperboard. The group "Ilim" produces about 2.5 million tons of paper products per year, that is, China consumes about 40% of the goods of the company. Almost entirely focused on the Chinese market pulp and paper mill in Siberia. For example, the infamous "Baikal Pulp and Paper Mill" to stop exporting there more than 90% of its products. However, the share of exports to China is high even for producers of the North-West region for the majority of the biggest players): "Solombalsky PPM", "SPPM", "Pitkäranta." For example, the plant "Pitkäranta", located in Karelia, not very close to China the region, supplying 35% of the Celestial Kingdom of its products. And in second place among foreign buyers is India (17.8%), and then go closer Ukraine and European countries. In the Russian market settles at least 10% of the goods. Favorable prospects. In the future importance of China to the Russian industry could grow even more due to joint projects. For example, "Basic Element" and a Chinese producer of chemical fibers TangShan SanYou XingDa Chemical Fiber signed an agreement of intent, which provides for the establishment of a joint venture on the basis of the Yenisei PPM (part of the "forest" the company "Basel" "Continental Management"). The project is planned modernization of enterprises in 2011-2015, the volume of investments - $ 300 million in the first stage this year will be organized production of 30 thousand tons of bleached viscose pulp per year, which will be processed in China. By the end of the project production capacity will reach 300 thousand tons. "China is interested in the fact that the products of deep processing was carried out in the country - says Milena Awad, a spokesman for" Continental Management ". - In Russia, therefore, China will open a joint venture to produce semi-finished products. " No options. Alternatives to the Chinese market for Russian manufacturers today do not exist. "Other markets are not relevant in terms of deliveries, - explains the situation Bubel Vera, director of sales and marketing business units," Ilim East. " - To put the pulp in the European part, we must deliver it to the port, which is 2 times more expensive than the drive to the border with China, which is closer. Then, from the port of cellulose must carry on, and ultimately increase costs by 70%. In addition, China - a very large market. " Market participants agree that the focus on specific customer fraught with risks - the Chinese market periodically sags, sometimes 2 times a year. According to Faith Bubel, a feature of the Chinese market is just in its speculative component. Periodically, it overheats and falls, and then again overheats and so on, but within a year, these fluctuations are leveled. Saves the fact that the dependence of Russia and China in the production and consumption of pulp Mutual. Competitors in Russia a little, and things they have in recent years unimportant. For example, a major supplier of Chile considered. But after an earthquake in February 2010, the country appeared shortage of raw materials, increased demand and prices for semi-finished products, cardboard, paper. Of course, the growth of imports from Russia jumped at once. But even without the earthquake of Chile does not have resources to expand - in a small country and already there are 16 factories. And China needs continue to grow, especially in the segment of softwood pulp. True, the production requires only cheap. "There is one caveat: China - manufacturer of cheap products. The Chinese pulp products deep processing should also be cheap, it means cheap supply of pulp from Russia, - Milena Awad. - Therefore, the Russian industry has to carry out a strict policy to reduce costs while maintaining a competitive cost of production. " No trees. Good news is that its production of cellulosic semi-finished products to China to establish difficult. On the one hand, the government has actively supported the timber industry, for example, a program of compensation of all costs for the supply of wood for manufacturers. But if China introduces new annual capacity for paper and pulp production adjusts from hardwood - wood chips are imported from Australia, Indonesia, - the softwood chips get nowhere, and their trees there. Last year, China opened a factory for the production of one million hardwood pulp, but its appearance does not frighten the Russian manufacturers. "By 2013, increase the capacity of producing hardwood pulp will be 1.6 million tons - continues Faith Bubel. - But this is only about 5% of the overall needs of China in cellulose. Transfer their factories to produce softwood pulp Chinese economically inefficient - it is better not buy the necessary amount. And its pine forests they have. " Therefore, even if every Chinese would think of to put on the Christmas tree, the Russian manufacturers can sleep easy at least 30 years. While the trees do not grow.