Valmet has been one of the pioneering Western companies in China, with its first paper machine delivery in 1933 and the first joint venture established in 1989. Today, Valmet offers technology, automation and services for the pulp, paper and energy industries in China with its strong local presence of 1,700 employees in five production units, three service centers and several branch offices. Valmet has delivered to China more than 100 board and paper machines, over 20 tissue machines, 18 complete pulp lines, 500 installed automation systems and more than 6,000 pulp and paper analyzers and consistency measurements. It is fair to say that Valmet has a strong market position in high-end technologies in China.
In China, growth in the services market is supported by the significant amount of new capacity that has been installed during the last 15 years. Also, the customers in China are slowly seeing the benefit of outsourcing services. The automation market is, for example, driven by increasing demand for saving in raw material costs, energy and labor as well as requirements for higher quality of the end-product. Urbanization and increasing standard of living support the demand for paper, board and tissue based products, and as pulp is used as a raw material for these products, also the demand for pulp is expected to grow.
Production and consumption figures for different paper grades in China suggest an overcapacity in some grades, but at the same time, many paper producers in China have seen profits grow over the last years. Some paper producers are developing well on the expense of struggling companies, and it seems that the largest producers are improving (and getting larger) and are taking an increasing share of the growth in net sales and profits.
The Chinese consumption is far from the level of the mature markets. In fact, Chinese consumption per capita of tissue is only a fifth of that in North America and a third of that in Western Europe. Considering the high population in China, if the Chinese would consume just a few toilet paper rolls more per year per person, that would turn into quite a few tissue machines. And toilet paper is difficult to substitute with digital solutions.
Find out more on Valmet's business in China in Area President Aki Niemi's presentation held at Finnish Industrial Week.