Take initiative, to cope with rising costs, trade barriers crisis
In the first half of last year, Chile had happened strong earthquake, wood pulp production and transport is interrupted, leading to the rising price of China’s pulp imports. Wood pulp prices of imports in early 2009 is 620 U.S. dollars / ton, $ 800 per ton in the end of 2009, $ 810 per tonne in the beginning of last year. In the second half of last year, transport costs soaring, coupled with RMB appreciation and other factors, paper profits declining. On November 15 last year, China’s coated paper anti-dumping countervailing duties, the Asian pulp and paper exports to the United States less than 340 grams Ping Zhang cardboard needs additional 25.2% tax. To this end, Asia Pulp & Paper since February last year to stop exports to the U.S. less than 340 grams of tablet paper, and instead to roll form of export. However, due to the local printing mostly reel to cut flat sheets of cutting machine, so a large extent reduce the competitiveness of the products in the local market. The company first took out the first one: enrich raw materials. By using the news of recycled paper, magazines, recycled paper, office recycling paper and so on back to the paper as raw material, the effective cost control while ensuring product quality, and successfully applied the “green card” to gain a firm foothold in the U.S. and European markets. “A piece of paper can be recycled six times.” Said Xu Ji-yao, now more than 55 percent of the company’s “green paper” raw materials, waste paper recycling and reuse made. Then, resorted to the second measure: by Customer force. Good cooperation relationship with over the years, Asia Pulp & Paper in consultation with the client, or switch to FOB (shipment FOB) transaction by the customer, freight collect; or method of settlement payment that month, to avoid exchange rate risk; period of one year contract by the two sides shared the rising costs, minimize product cost. The third measure: changing sales channels, the original, typically, less than 340 grams of paper products in the United States the main high margin print market; now replaced to sell cutting plant, or to find local cutting plant, for processing After re-entering the local print market. Despite the profit decline, but to stabilize the market share. According to statistics, up to now, the amount of Ningbo Asia Pulp & Paper exports to the United States, an increase of 30%.