UPM Biofore Magazine 1-2018

UPM HAS A LONG TERM COMMITMENT TO CHINA

APAC Supply Chain Centre in Changshu established

UPM Paper invests in China

UPM Raflatac starts in Shanghai

Changshu mill second PM start-up

Fibre United starts to represent Canfor in China

Changshu mill third PM start-up

2008

UPM Asia R&D Centre established

1998

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2005

2007

2014

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2018

1997

2007

2011

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UPM Plywood’s direct sales to China

Raflatac Changshu factory starts production

UPM Pulp APAC sales organisation set up in Shanghai, direct sales start

Investment of 100,000 t office paper cutting line China becomes the biggest market of UPM Timber Pulp sales hits 1 million tonnes through China team

2008

2015

UPM Raflatac capacity expansion

UPM Timber China Sales Team established

their groceries mainly from street markets. Now they increasingly prefer supermarkets and choose packaged and labelled groceries for their shopping baskets. Growing together with customer The rapid change of the Chinese economy and paper market has been witnessed first-hand by Eddie Chan , Vice President, Sales for UPM Specialty Papers in China. He has been selling UPMproducts in China for 20 years. “Two decades ago, no one would have believed the rapid, stable growth of China’s economy, which is clearly visible in paper products, too. Working in sales is rewarding and exciting here, since we can grow together with the customer,” says Chan. He believes that the demand for paper products will continue to grow further in step with China’s economic

growth and improved living standards – though the competition is also growing fiercer. Chan recalls that 20 years ago, China had only a few local paper producers in addition to UPM. Since then, other big international operators have established a foothold on the market. “The quality of the competition is increasing, too. UPMhas provided high-quality products to its Chinese customers ever since the outset, but over the last decade, local competitors have also raised their product quality,” Chan explains. He believes environmental performance gives UPMa special competitive advantage, as there is rising environmental awareness among Chinese customers. Foreign companies operating in China already see the value of paper products made from certified rawmaterials.

Selective strategy The UPMChangshumill site is also home to UPMRaflatac’s labelstock factory, the Asian research and development centre, and the APAC Supply Chain Centre. Hand in hand with its production investments, UPMhas placed a strong focus on sales andmarketing in China. In addition to paper and label, UPM sells pulp, plywood and sawn timber in China. According to Eikens, UPM’s strategy is to achieve a strong market position by focusing on carefully selected product segments. A good example is high-end office paper, in which the company enjoys a significant market share in China. “The demand for high-end office paper continues to grow, but its consumption in China is still much lower than in Europe, for example,” Eikens notes.

The changing Chinese shopping basket UPM is preparing for future growth by making further investments at the Changshumill. The production capacity of paper machine 3 will increase when the second supercalender is ready early in 2020, making UPM one of the biggest label release paper producers in Asia. “Demand for label materials is growing strongly in China — it’s a big opportunity for us,” notes Eikens. The demand for label materials is drivenmainly by online sales, which is especially strong in China. Packaging labels are essential to assure smooth customer delivery. “Forecasts indicate that China will represent 60 per cent of global online sales by 2020,” observes Eikens. Another area of growth for label materials is the food industry. In the past, Chinese consumers bought

“Forecasts indicate that China will represent 60 per cent of global online sales by 2020,” observes Bernd Eikens.

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