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September 15, 2008

China's Forests CANNOT Support These Planned Pulp Mills

This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Dave Hillman, Independent ConsultantDave Hillman
Independent Consultant, Dave Hillman
Implications: It is highly misleading for anyone ("GreenBiz") to suggest that China is capable of supporting 8 new world class pulp mills.  I doubted this the minute I read it and applaud Mr. Chuck Klass for pointing this out. The land base needed to grow this great amount of trees would greatly decrease the arable land now needed to feed their 1.3 million people. It is patently wrong to suggest that a company is doing its population any favors by growing trees on their limited arable land so they can reduce the amount of imported market pulp.  Where is the necessary food going to be grown?

Analysis: It's true that there are pulp mills in China but the thought of many more being built is inconceivable.  APP has one of the world's most productive mills on Hainan Island (off the coast of Viet Nam) producing in excess of 3400 mt/day of eucalyptus and acacia.  The plantations were planted 7 years ago and are now producing satisfactorily.  APRIL has a new mill going into their board mill in the SE corner of the country. This integrated mill will be supplying fiber to their board machines which are dedicated to (believe it or not!) to producing cigarette carton board for China's 350 million smokers.   I believe only the southern tier of States in China can grow the trees needed for a new pulp mill.  The eucalyptus and acacia trees take 6-7 years to grow to maturity....which means there is no quick fix even if someone did want to finance a new US$1.5 billion mill to produce 4,000 mt/day.  And, someone suggests that 8 such mills can be built?   No way!

Other Analyses of the Same Source Article:
What Chinese Pulp Expansion?
September 12, 2008, Author: GLG Expert Contributor
China's new capacity of 8 mills, averages out to over 2 MM green tons per mill.
September 12, 2008, Author: Brad Franchi, President, Forest Strategies, LLC.
China's pulping capacity expansion-who's supplying the chips?
September 12, 2008, Author: Dave Hillman, Independent Consultant, Dave Hillman

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