Paper & Pulp Machinery Industry in China Liwei Tan Finpro Shanghai 31/05/2012

Contents  General Information of Paper & Pulp Industry 3 Introduction of P&P Machinery Industry 7 Technologies of Domestic Pulping Equipment 7 Pulping Components and Systems to be Developed 11 Technologies of Domestic Paper Machinery 13 Papermaking Components and Systems to be Developed 15 Appendices Appendix I:Top 30 Paper Companies in 2010 Appendix II: Major manufactures for pulp and paper machinery Appendix III: Encouraged Imports of P&P Technologies and Products Finpro Shanghai

General Information of Paper & Pulp Industry (1/3) According to the data of China Paper Association, in 2010, there are more than paper and paperboard manufacturers with yearly production quantity of 92,7 million tons, increased 7,29% to The yearly consumption was 91,73 million tons and increased 7,05% to Finpro Shanghai

General Information of Paper & Pulp Industry (2/3) The following pie chart shows the production quantity and the percentage of different types of paper and board in Finpro Shanghai

General Information of Paper & Pulp Industry (3/3) 13 provinces (Shandong, Guangdong, Zhejiang, Jiangsu, Henan, Fujian, Hebei, Hunan, Sichuan, Anhui, Guangxi, Hubei, Jiangxi) and Chongqing Municipality have achieved the annual production more than 1 million tons in Above 14 provinces and municipality contributed 85,09 million tons in total, accounting for 91,79% of China’s. Finpro Shanghai

General Information of Paper & Pulp Industry 3  Introduction of P&P Machinery Industry 7 Technologies of Domestic Pulping Equipment 9 Pulping Components and Systems to be Developed 11 Technologies of Domestic Paper Machinery 13 Papermaking Components and Systems to be Developed 15

Introduction of P&P Machinery Industry No official statistics on how many enterprises manufacturing pulp and papermaking machinery. As an industrial cluster area, Henan Province has more than 200 papermaking machinery manufacturers in 2009 with the production quantity of tons and sales revenue of 1,62 billion RMB Yuan, about 16% of whole China’s. In the past 10 years, Chinese papermaking machinery industry developed rapidly and achieved some results on technical level, new models and production capabilities. However, industrial structure and problems have not been improved: Most papermaking machinery manufacturers keep the habits of producing complete set of equipment instead of outsourcing Similar products, no big differences Excessive price competition, low profits Unstable quality and performance products with low technical level So far, almost all advanced domestic machinery are copied or introduced from foreign companies, very few Chinese manufacturers have their own intellectual property rights. Currently, Chinese manufacturers cannot meet the requirements of high-speed, large- scale and automated production in paper industry. Finpro Shanghai7

General Information of Paper & Pulp Industry 3 Introduction of P&P Machinery Industry 7  Technologies of Domestic Pulping Equipment 9 Pulping Components and Systems to be Developed 11 Technologies of Domestic Paper Machinery 13 Papermaking Components and Systems to be Developed 15

Technologies of Domestic Pulping Equipment (1/4) Finpro Shanghai Summary Domestic pulping line can produce waste paper pulp or wood pulp with annual production capacity of tons; For packaging paperboard or corrugated board production, the annual capacity of domestic pulping line is tons. Wood Preparation Equipment (Dry Method) Domestic production line including cutting, transportation, storage and washing can produce 560 tons bamboo chemical pulp per day, i.e tons/year. Drum debarking machine: max diameter of 4080mm, length of 15m, annual production capacity of m 3 Drum chipper: max diameter of 1300mm (timber diameter < 250mm), production capacity is about 150m 3 /hour Disc chipper: max diameter of 3360mm (timber diameter < 700mm), production capacity is about 290m 3 /hour Hummer re-crusher: max diameter of 1350mm, production capacity of 80m 3 /hour Drum re-crusher: max diameter of 800mm, production capacity is 6-30m 3 /hour Chip screen: 15m 2 and 20m 2, production capacity is m 3 /hour Discharge screw: max diameter of 950mm (2 screws), production capacity of single screw is more than 750m 3 /hour

Technologies of Domestic Pulping Equipment (2/4) Finpro Shanghai Wood Preparation Equipment (Wet Method) Domestic manufacturers are able to provide wood preparation system (wet method) with annual production capacity of tons/year. Drum washing machine ( ɸ 2000mm X 3000mm) equipped with three-axis inclined spiral dewater machine ( ɸ 800mm X 7000mm), production capacity can reach 600m 3 /hour Spiral-flow type washing machine ( ɸ 3500mm) equipped with vibrating dewater screen (11 m 2 ), production capacity can reach 240m 3 /hour Cooking Equipment Chinese manufacturers can produce whole set of cooking equipment for wheat straw and reed with horizontal pipe continuous cooking technology. Currently, around 100 sets in use, the max annual production capacity reaches 240tons/day Except main components: screw feeder (max ɸ 635mm (25inch)) and cooking pipe (max ɸ 2100mm), a variety of auxiliary equipment such as flow meter, heat exchangers, blow tank and storage are also localized. The related DCS is developed by Chinese companies Chinese manufacturers can produce main equipment of Super Continuous Cooking system for wood and bamboo chips, such as large-sized cooking pot (250m 3 ), pressure storage tank (for white water and black water, 1000m 3 ) and blow tank (1500m 3 ) for wood cooking equipment. However, the DCS is imported.

Technologies of Domestic Pulping Equipment (3/4) Finpro Shanghai Equipment for CTMP (chemi-thermomechanical pulp) The screw breaker and high-consistency refiner need to be imported, auxiliary equipment are localized. Pulp Washing Equipment Vacuum filter (max 120m 2 ), screw press washer ( ɸ 1100mm) and twin-roll press washer ( ɸ 1500mm X 5000mm) are three major equipment. Screening Equipment Chinese manufacturers can produce fiber separator (max ɸ 1500mm, production capacity of 300tons/day); shaker (max 3m 2, production capacity of 100tons/day); outflow pressure screen (max 5m 2, production capacity of 400tons/day); inflow pressure screen (max 6m 2, production capacity of 400tons/day). Bleaching Equipment Traditional pulping lines are still using CEH bleaching technology. Double-roll mixers and pulp chlorine mixers are applied mainly. New projects are using oxygen delignification and less or free chlorine to bleach. Oxygen delignification tower: max ɸ 3000mm, height of 33,6m Blow tank: max ɸ 3200mm, height of 15,5m

Technologies of Domestic Pulping Equipment (4/4) Finpro Shanghai Beating Equipment Low-consistency hydraulic beater: max size of 50m 3, production capacity of 400tons/day High-consistency hydraulic beater: max size of 30m 3, production capacity of tons/day Drum beater: max ɸ 4500mm, production capacity of 500tons/day Heat Dispersing Equipment Roll dispersing equipment: roll diameter ɸ 1000mm, daily processing capacity is 150tons/day Disc dispersing equipment: max ɸ 800mm, daily processing capacity is tons/day Deinking Equipment Most paper mills are using traditional flotation technology, the max diameter flotation deinking machine is ɸ 5m (convection) or ɸ 6m (diffusion), deinking rate can reach 97%. The diameter of pressure flotation vat is ɸ 800mm, daily processing capacity is 300tons.

General Information of Paper & Pulp Industry 3 Introduction of P&P Machinery Industry 7 Technologies of Domestic Pulping Equipment 9  Pulping Components and Systems to be Developed 14 Technologies of Domestic Paper Machinery 13 Papermaking Components and Systems to be Developed 15

Pulping Components and Systems to be Developed (1/2) Finpro Shanghai Wood Preparation Equipment Large drum debarking machine with diameter 5m and above Cooking Equipment Vertical continuous cooking system for chemical pulp and BCTMP with production capacity of tons/day Rapid replacement energy-saving batch cooking system for wood pulp and straw pulp with production capacity of tons/day Washing Equipment Efficient closed multi-stage counter-current replacement proliferation of pulp washing equipment with production capacity of tons/day Screening Equipment Large-sized, high efficiency coarse pressure screening equipment for low and medium consistency stock Bleaching Equipment Low chlorine, anaerobic multi-stage bleaching system with production capacity of tons/day

Pulping Components and Systems to be Developed (2/2) Finpro Shanghai Equipment for beating process Developing and producing 800, 1000,1200 high and medium consistency refiners for large and medium-sized paper mills Equipment for waste paper handling Waste processing equipment with production capacity of tons/day Equipment for furnishing process for pulping Automatic furnishing system with degassing, desanding, selection functions and pulse attenuation devices;

General Information of Paper & Pulp Industry 3 Introduction of P&P Machinery Industry 7 Technologies of Domestic Pulping Equipment 9 Pulping Components and Systems to be Developed 14  Technologies of Domestic Paper Machinery 17 Papermaking Components and Systems to be Developed 15

Technologies of Domestic Papermaking Machinery (1/2) Finpro Shanghai Summary Chinese manufacturers can produce paper machinery for tons/year liner board, tons/year coated paperboard and tons/year fine paper. The max width is 5,5m and highest speed is about 700m/min. Comparing with foreign products, domestic machine needs longer commissioning time and energy consumption is higher; the quality of produced paper is lower; functions and performance are not stable. One major reason is Chinese manufacturers lack solid theory, mature technologies and relevant practice experience; mainly rely on copy during production. Paper-making Machine Fine paper machine: main width of 2640mm, some have width of 3520mm, 3750mm and 3950mm; working speed between m/min Semi-hydraulic headbox need to import. Paperboard machine: max width of 5800mm, max working speed of 850m/min Tissue paper machine: vacuum forming tissue machine has width of 2660mm and speed of 600m/min; crescent twin-wire tissue machine has width of 2830mm and speed of 1400m/min Inclined wire specialty paper making machine: width between mm, speed between m/min.

Technologies of Domestic Papermaking Machinery (2/2) Finpro Shanghai Off-machine Coater Coated paper coater: width mainly between mm, few have width of 2640mm; working speed between m/min Carbonless paper coater: width between mm; working speed between m/min Thermal paper coater: width between mm; working speed between m/min On-machine Coater Cardboard coater: width mainly on 2800mm, some have width of 4800mm; working speed between m/min Specialty paper coater: width of 1600mm; working speed between m/min High-speed Cutter (rewinders) Pulp board on-machine cutter: mainly using single-knife rotation continuous cutting design; width of 3200mm or 3600mm; working speed between m/min, for cutting paper of g/m 2 Fine paper off-machine cutter: have various widths of 1760mm, 1880mm 2640mm and 2730mm with single-knife or double-knife rotation continuous cutting design; working speed between m/min, for cutting paper of 600 g/m 2

General Information of Paper & Pulp Industry 3 Introduction of P&P Machinery Industry 7 Technologies of Domestic Pulping Equipment 9 Pulping Components and Systems to be Developed 14 Technologies of Domestic Paper Machinery 17  Papermaking Components and Systems to be Developed 20

Papermaking Components and Systems to be Developed Finpro Shanghai Paper-making Machine Hydraulic headbox for the papermaking machine with speed above 600m/min Device and related software for adjusting dilution water Twin-wire former and forming technology Shoe pressing roll, pressing felt or conveyor belt Leading paper system, development of various types of blow box and devices for paper stability Off-machine Coater Equipment for high-speed automatic paper unwind and pick-up Technology of coating weight control On-machine Coater Filming and sizing coater Leading paper system Auxiliary Machinery High-speed synchronous cutter (rewinder) High-speed wide winder Soft calender

Appendices Appendix I: Top 30 Papermaking Companies in 2010

7. Appendix I: Top 30 Paper Companies in 2010 (1/3) NoCompany NameWebsite Production Qty (K Tons) 1Nine Dragons Paper (Holdings) Limitedwww.ndpaper.com7.280,00 2Lee & Man Paper Manufacturing Limited 3Shandong Chenming Paper Group Co., Ltd. 4China Paper Corporation 5Gold East Paper (Jiangsu) Co., Ltd. (APP) 6Shandong Sun Paper Co., Ltd. 7Shandong Huatai Paper Co., Ltd ,00 8Ningbo Zhonghua Paper Industry Co., Ltd. (APP) 9MCC Paper Group Co., Ltd. 10Shandong Bohui Paper Industry Co., Ltd. Finpro Shanghai

Appendix I: Top 30 Paper Companies in 2010 (2/3) NoCompany NameWebsite Production Qty (M Tons) 11Anhui Shanying Paper Co., Ltd. 12Zhejiang Jingxing Paper Co., Ltd. 13Henan Yinge Industrial Investment Co., Ltd. 14 UPM—Kymmene (Changshu) Paper Industry Co., Ltd. 15Shandong Tralin Paper Co., Ltd. 16Jianhui Paper Co., Ltd.N/A692,00 17Zhejiang Ji'An Paper Packet Co. Ltd China Sunshine Paper Holdings Company Limited 19 Gold Huasheng Paper (Suzhou Industrial Park) Co., Ltd. (APP) 20Guangzhou Paper Group Co., Ltd ,70 Finpro Shanghai

Appendix I: Top 30 Paper Companies in 2010 (3/3) NoCompany NameWebsite Production Qty (M Tons) 21Xinxiang Xinya Paper Group Co., Ltd. 22Zhejiang Longchen Paper Co., Ltd. 23Shandong Guihe Paper Industry Group Co., Ltd. 24Wuxi Longchen Paper Co., Ltd. 25Shandong Huajin Group Co., Ltd. 26Fujian Jinjiang Youlanfa Paper Co., Ltd ,00 27Hebei Yongxin Paper Industry Co., Ltd. ND Paper acquired 78,13% shares 499,90 28Henan Longyuan Paper Industry Co., Ltd Jiangsu Changfeng Science and Technology Group 30Shanghai Zhonglong Paper Co., Ltd. Finpro Shanghai (Source: China Paper Association)

Appendices Appendix II: Major manufactures for pulp and paper machinery

Appendix II: Major manufactures for pulp and paper machinery (1/3) Finpro Shanghai NoCompany NameWebsiteMain Products 1 China National Light Industry Paper Machinery Group Corporation / 中国轻机造纸机械 集团公司 Pulping and papermaking equipments, machinery, production line, devices and parts. 2 Fujian Light Industry Machinery & Equipment Co., Ltd. / 福建轻 工机械厂 Pulping machine, cleaner, pressure screen, pulp washer & thickener, deinking equipment, DDR, disperser etc. 3 Jiaozuo Chongyi Light Industry Machinery Co. Ltd. / 焦作市崇义 轻工机械有限公司 /600 tissue machine, 4800/600 corrugated paper machine, 3520/600 fine paper machine, kraft liner paper machine, reel machine, re-winder, rollers and dryers (0.5Mpa,0.8Mpa). 4 Jiangsu Huadong Paper Machinery Co., Ltd. / 江苏华东 造纸机械有限公司 (Only in Chinese) High-speed papermaking machine with max. width of 8 m and max. speed to 1500m/min 5 Leshan Chengfa Paper Machinery Co., Ltd. / 乐山成发 造纸机械有限责任公司 Papermaking machine with width of 6000mm and speed of 1200mm/min

Appendix II: Major manufactures for pulp and paper machinery (2/3) Finpro Shanghai NoCompany NameWebsiteMain Products 6 Qinyang First Paper Machinery Co., Ltd. / 沁阳市 第一造纸机械有限公司 (Only in Chinese) Papermaking machine with widths of 2400mm, 3600mm, 4800mm and 5600mm and speed less than 800m/min. Cast dryer with ɸ 1500, ɸ 1800, ɸ 2000, ɸ 2500 and ɸ China National United Equipment Group Corp. Anyang Machinery Factory / 中国建材轻工机械集团公司 安阳机械厂 (Only in Chinese) The APMP pulping equipment and parts, such as conveyor screw, blow tank, multi- disc vacuum filter, dry and wet preparation system, cooking tank 8 ZiboTaiding Paper-making Machinery Co., Ltd. / 淄博泰 鼎造纸机械有限公司 (Only in Chinese) Controllable high super calender, soft calender and hard calender 9 Taicang Hutai Chang'e Paper Equipment Co., Ltd. / 太仓沪太嫦娥造纸设备有限 公司 (Only in Chinese) Multi-cylinder paper machine with width between mm, speed less than 600m/min. 1500m/min high-speed re-winder, reel machine, calender, cast dryer of Φ mm and alloy dryer

Appendix II: Major manufactures for pulp and paper machinery (3/3) Finpro Shanghai NoCompany NameWebsiteMain Products 10 Shandong Zhucheng Jinridong Paper Making Machine Co., Ltd. / 山东省诸城市金日东造纸 机械有限公司 Papermaking machine for tissue paper, fine paper, cardboard; spiral washing machine; waste paper deinking equipment and so on. 11 Henan Dazhi Papermaking Equipment & Engineering Co., Ltd. / 河南大指造纸装备集成工 程有限公司 om Hydraulic dilution controlled headbox, film press coater, soft nip calender, floatation air dryer, air turn, high- speed re-winder, web stabilizer, felt cleaner, automatic slitter re- winder etc. 12 Xuchang Zhongya Paper Equipment Co., Ltd. / 许昌中亚 造纸设备有限公司 (Only in Chinese) 3600mm, 4400mm, 4800mm papermaking machine for cardboard and corrugated paper. 2730mm papermaking machine for fine paper. Cushion headbox, Φ1,5m pressing roll

Appendices Appendix III: Encouraged Imports of P&P Technologies and Products

9. Appendix III: Encouraged Imports of P&P Technologies and Products (1/2) NoTechnology Name A99 Advanced production technology of paper machinery with width of 6 meters or above and speed of m/min A100Design and manufacturing technology for high-speed precision tablet paper cutter A101 Manufacturing technology for APMP high yield pulp production line with annual production capacity of more than 150,000 tons A102Manufacturing technology of chlorine-free bleached pulp equipment A103Manufacturing technology of efficient alkali recovery equipment Finpro Shanghai A. Encouraged Imports of Advanced P&P Technologies

Appendix III: Encouraged Imports of P&P Technologies and Products (2/2) Finpro Shanghai NoHS CodeProduct Name B Pulping machines: chemical pulp production equipment with annual production capacity more than tons; chemical and mechanical pulp production equipment with annual production capacity more than tons B Pulp machine: width ≥ 3.500mm, working speed ≥ 300m/min B Papermaking machine: width ≥ 5.000mm, working speed ≥ 800m/min B liner board production machine with annual production capacity more than tons B Pulp, paper or paperboard molding machinery B High-speed precision tablet cutter: width mm, the maximum operating speed of 350m/min, cutting accuracy of ± 0.5mm B77 Cutter cross-section of high-speed precision flat-panel system: width mm, the maximum operating speed 350m/min, maximum cutting load 1.000g/m 2 B Corrugated board production equipment: speed> 140m/min, board width> 2,2m, more than seven layers B. Encouraged Imports of Important P&P Products (Source: Catalogue for Encouraged Imports of Technologies and Products (Edition 2011)