Developing Guangxi

Guangxi Province in South China is making the most of its optimal location and fast-developing infrastructure. Thanks to substantial investments, paper and board production capacity in the area is set to boom.
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  • 2023, Pulp, Markets and trends

Guangxi province is famous for its stunning scenery of lush valleys, picturesque rice terraces and the Guilin mountains and waters, attracting millions of visitors every year.

Recently, Guangxi Zhuang Autonomous Region, roughly the size of Norway but with a population of over 50 million, has become much more than a travel destination. Located optimally as a doorway to nearby Southeast Asian markets, Guangxi is attracting substantial investments from domestic and global paper and pulp industry companies.

Guangxi is one of China’s most forest-rich areas, with forest coverage of about 60 per cent, or almost 15 million hectares. The main species in the area are eucalyptus, masson pine, and mulberry. Eucalyptus plantations alone cover 2.66 million hectares. However, although Guangxi is number one in China for timber production, it has previously been a hub for paper and pulp sales and marketing rather than production.

Paper and pulp capacity is growing

Paper and pulp production in the Guangxi area previously accounted for only a few per cent of China’s total production. In the past few years, several paper and pulp companies have announced major investments to expand operations in the area. Guangxi is increasingly becoming an essential destination for the industry, says Harri Vertanen, Metsä Fibre’s VP Sales, APAC.

“Since 2019, several big paper mills have expanded their operations in wood plantations, as well as paper and pulp production in Guangxi. In the next three to five years, Guangxi’s paper and pulp production capacity will reach 25 million tonnes per year,” Vertanen predicts.

Today, most big paper mills in Guangxi have switched to imported or self-produced wood pulp.

Growth from folding boxboard

The paper and pulp companies present in the area are large and small. Prominent companies include Sun Paper and APP Guangxi, which both have an annual paper and pulp production capacity of 3.5 million tonnes. Many medium-sized companies have a production capacity of under 100,000 tonnes per year, such as Qifeng, with 25,000 tonnes of paper production capacity.

Alongside APP Guangxi and Sun Paper, companies such as Asia Symbol, Xianhe, Lee & Man, Nine Dragons, Jianhui Paper, and Jiangmen Qiaoyu Paper have all announced investments to substantially increase production. According to AFRY engineering consultants, the paper and board production capacity of Guangxi will grow by more than eight million tonnes in 2022. More than half of the growth will be in folding boxboard, reflecting the changes in consumer habits.

The development has been extremely fast. Before 2019, the primary raw material used for paper and pulp production in Guangxi was sugarcane bagasse, a by-product of the sugar industry. The resulting products were mainly low-grade tissue.

Today, most big paper mills in Guangxi have switched to imported or self-produced wood pulp. The ban by the Chinese government on importing recycled waste paper has boosted import volumes of wood fibre and plantation wood, to ensure stable paper production.

Vertanen says that companies of all sizes can thrive in the market because the products they specialise in vary. However, many smaller mills are outdated and often do not meet modern environmental standards.

“The big companies produce basic products such as ivory and tissue, while small companies produce specialty paper. Tissue ¬giants will keep increasing their capacity, which means that market ¬share of small producers will tend to fall in future.”

Tissue giants will keep increasing their capacity, which means that market share of small producers will tend to fall in future.

Good supply of skilled labour

ITOCHU Guangzhou Limited has been the agent of Metsä Fibre in the APAC region since 2005. Pulp Sales Manager of ITOCHU Guangzhou He Xin estimates that the market in Guangxi will continue to develop rapidly in the coming years.

“Profit in tissue production is very limited now, but the production costs in Guangxi are still low, and there is a good supply of skilled labour. The salary costs in the coastal area are 18 per cent lower than in inland cities of China, and the rental fees for land and factory buildings are also lower. I believe Guangxi will become a major paper and pulp production province, and some capacity from nearby province Guangdong will move to Guangxi.”

Logistics play an important role in the trade and supply chain of export-oriented business. Apart from rail transport and the highway from the province capital, Nanning, to the coast, the expansion of port operations in Guangxi is an essential element in the rising status of the province.

“Production in Guangxi exceeds domestic demand, so paper and pulp mills are selling their products not only to nearby provinces such as Guangdong, Yunnan, Guizhou and Sichuan but to ASEAN countries and the Middle East as well," He says.

Shore connections

The main ports of the area include Qinzhou, Fangcheng and most importantly, Beihai Shibulin and Tieshan. The ports are operated by Beibu Gulf Port Group, ranked as China’s eighth-largest container port group. In the first quarter of 2022, the company operated over 1.4 million TEU containers (Twenty Foot Equivalent Unit).

However, the capacity of Beihai port will need to grow to meet the increase in paper and pulp production in the area, says Myra Ji, Shanghai-based Regional Logistics Manager for Metsä Group.

“Currently, the Beihai Tieshan terminal focuses on break bulk cargo handling and some domestic container deliveries. The port is quite congested. As more investments are made to increase paper and pulp production, the port construction has not kept up. It has become the bottleneck, restraining material deliveries in, and finished products out,” Ji says.

At Beihai Tieshan port, two new berths for 150-tonne vessels and four for smaller vessels are expected to be in use by mid-2024. After the expansion, Beihai Shibulin port will be shut down in a few years, and operations will gradually be transferred to the Tieshan terminal.

Even though competition in the paper business in the area is set to get tougher, He sees the future as positive.

“Metsä Fibre has quality products and can provide regular supply and customer technical service. These are the most valuable things in our partnership. In future, I expect Metsä Fibre to strengthen its presence in South China and especially in Guangxi region.”

This article was originally published in Fibre Magazine issue 2022–2023.

ITOCHU Corporation

A Japanese trading company founded in 1858 is one of Metsä Fibre’s owners together with Metsäliitto Cooperation and Metsä Board. ITOCHU is today involved in domestic trading as well as importing and exporting various goods and materials. The company operates in various sectors such as textiles, metals, minerals, food, communication technology and finance, energy, chemicals, and machinery.

In this article

Harri Vertanen
VP Sales, APAC at Metsä Fibre . He has held his current position since 2011.


He Xin
Pulp Sales Manager of ITOCHU Guangzhou Ltd. ITOCHU Corporation, founded in Japan, operates in various sectors.


Myra Ji
Regional Logistics Manager at Metsä Group Shanghai. She has held the position since 2015.