By Colin Thompson
The enormous growth of China's printing industry we discussed yesterday is only part of the story. And size can mean nothing if there is a lack of power and depth. Still, don't underestimate the Middle Kingdom, the land its ancient inhabitants considered to be the geographical center of the world and its only civilized culture.
When judged from a different angle, however, the great achievements made by China's printing industry are heavily diluted by the country's enormous population of 1.3 billion. For example, the annual average paper consumption per capita is 33 kg (72 pounds) and the annual printing production per capita is about $21 US, only about 1/10th of that in developed countries.
Stimulated by China's entry into the WTO, the global manufacturing industry is accelerating its strategic shift to China. Compared with this movement, the reform of the printing industry seems to lack of power and depth, and has a long way to go. This frustrates the industry from gaining all-sided, coordinated and sustainable development in several ways and implementation of market mechanisms by the printing industry are lagging behind.
- Weak points still exist in the administration chain;
- The reform of state-owned printing enterprise is facing many challenges and difficulties, and still has a long way to go. Industrial structure is not rationalized, leaving behind problems such as the weight of state-owned economy is too large, while that of non-state-owned economy is not enough.
- The number of small enterprises greatly exceeds that of large enterprises. According a survey conducted by Printing Manager, an industrial magazine, the while total production value by the 100 top printing enterprises was 23.4 billion RMB it accounted for only 11% of that of the whole nation's printing enterprises.
- Production capacity for the high-end printed market is inadequate, while that for the low-end printed market is in large surplus. Moreover, most domestic printing enterprises lack of competitiveness beyond that of price. In R&D, no breakthrough has been made in printing-related technologies (with the exception of that in the Chinese processing technology) when judged by the standard of technological originality that leads to possession of intellectual property.
The Chinese and other investors are investing substantially in people, training, technology, machinery, business models and quality.
These facts notwithstanding, the overall fact is the Chinese and other investors are investing substantially in people, training, technology, machinery, business models and quality. In time, this will impact on the rest of the world!
Printing Machinery and Materials
The sustained and rapid development of the Chinese printing industry has greatly stimulated the machinery, equipment and material industries. Mid- and low-end printing equipment and materials are already self-supplied, and part of domestically made products are now even exported to overseas market, while the high-end printing equipment and materials still rely on import.
Right now, there are about 500 printing press manufacturers in China. Yes, 500. In 2003, the total value of production and export reached approximately 7 billion RMB and $100 million US, while annual imports between 2001 and 2003 remained at the level of about $1.3 billion US (The data for 2003 was $1.345 billion US.). Apparently, the volume of imports largely exceeded that of exports. But, in the next twenty years this will have a reverse action, whereby exports will exceed imports.
The data for sheet-fed in 2003 was 933 presses and $507 million US. Between the same period of time, about 539 sets of web-fed presses with a total value of $456 million US were imported and the data for 2003 was 131 sets and $126 million US. The total number of imported presses was ranked third in the world. There will be massive growth in digital presses in the future to be competitive with the world movement in on-demand printing. Watch the next twenty years for China's growth in digital printing processes.
There are 3,500 paper manufacturers all over the country with 780,000 employees (in which, foreign invested enterprises are 280, taking up 8.1%, but occupy 30% of the total sales revenue, profit and tax). In 2002, production of paper and cardboard reached 37.8 million tons, an increased of 18% over the previous 2001 and the total production value reached 139.8 billion RMB --an increase of 16% over the previous year, while imported paper and cardboard reached about 6 million tons. In 2006, China was the second largest producer of paper in the world! By, 2010 China will be the largest producer of paper in the world with rapid growth for at least twenty years up to 2030.
By, 2010 China will be the largest producer of paper in the world.
The industry consumed 43.32 million tons of paper and cardboard in 2002 and the consumption per capita was 33 kg. In detail, for publication printing, about 12.85 million tons of paper was produced, an increase of 32% over the previous year, while 14.17 million tons of paper were consumed, an increase of 33% over the previous year and imported paper reached 1.36 million tons; for newspaper printing, about 1.85 million tons of paper were produced, while 2.04 million tons were consumed and 190,000 were imported; about 1.8 million tons of coated paper were produced, while 2.76 and 1 million tons were consumed and imported, respectively, about 9.2 million tons of uncoated paper were produced, while 9.37 million tons and 170,000 tons were consumed and imported, respectively. What will the statistics look like in 2010?
Currently there are more than 400 ink manufacturers. In 2002, the total production volume of ink was more than 220,000 tons, with more than 50 kinds of product and more than 1,000 different colors, and the sales revenue was 4.6 billions RMB. China has grown to be the forth largest ink manufacturer in the world (U.S.A: 1.12 million tons per year; Japan: 470,000 tons per year; Germany: 370,000 tons per year) . What will the statistics look like in 2010?
China has grown to be the forth largest ink manufacturer in the world
Photosensitive plates are one of the rapidest growing industries in China. Through severe competition, the degree of optimized and efficient production is rapidly increased. According to a survey conducted over 30 PS plate manufacturers, the production capability has already reached 100 million square meters per year. In 2002, about 80 million square meters were produced and sold, an increase of 30% over the previous year and in 2003, 90 million square meters were produced. In 2002, about 9.72 million square meters' PS plates were exported, an increase of 32% over the previous year, while 3.19 million square meters' PS plates with a total value of 13.44 million US$ were imported. What will the statistics look like in 2010?
In recent years, one of the features in the Chinese printing machinery and material industries' development is to combine scientific research, manufacturing and application into a integrated system and to build 'macro' industrial chains with Chinese characteristics. The printing machinery industry has made pronounced progresses in capital operation, developing new product and extending industrial chains.
Expansion by acquisition
In 2001, Shanghai Electronics Group Cooperation, in cooperation with an American company, successfully purchased the assets of Akiyama, Japan and sent people to chair the newly formed company: Akiyama International. After the first year's successful test operation, its new product of sheet-fed folio perfecting multi-color press won the gold medal in 2002 Shanghai Industry Expo and gained wide recognition among experts and users in Dongguan Industrial Show (Guangdong Province) in March 2003. It is the first time that a Chinese company purchased a global company of a well known brand, accepted its personnel and made successful re-entry into the global market. An article, which appeared in the Washington Post, said that the newly built Akiyama International was a great expansion. Watch out for the rapid expansion over the next twenty years!
Adopting the OEM mode, Beiren Group Cooperation, the largest printing press manufacturer in China, reached agreement with the Tokyo Shuppan Kikai (TSK) on putting Beiren's brand on TSK's post press equipment for sale in the Chinese market. Beiren recently established another joint venture with the Gun Ze Business Corporation of Japan, to produce an automatic paper stacker used in newspaper printing, and reached consensus on CTP cooperation with Creo, Canada. Shanghai Printing & Packaging Machinery Co. Ltd. cooperated with American Fang Brothers Graphic Co. to develop prepress equipment. All these projects work to extend the industrial chains and will bring new business opportunities to the printing machinery industry. The rapid growth of China exceeds the rest of the world and will continue for the next twenty plus years.
Manufacturing growth... and consolidation
In the past two years, there has been an apparent move for foreign printing material manufacturers to invest in building factories in the mainland of China. This is widely accepted as part of their strategy of localization. For example, AGFA and KPG have successfully set up operations in Wuxi and Tianjin to produce high quality PS and CTP plates, respectively. In Wuxi, Agfa has built a PS production line with the capability of producing 25 million square meters per year.
Fuji Film has established a joint venture, Fuji Starlight Co., Ltd. in Beijing, with the Chinese Academy of Printing Technology (CAPT) to produce high quality PS plates and CTP plates. Over the past few years, a number of overseas paper manufacturers, such as those from Indonesia, Finland and Taiwan area, have built up factories in Jiangsu Province, Zhejiang Province, Shanghai Municipal City and etc. For example, January 2004, the Shanghai Light Industry Group Corporation signed an agreement on a project for newspaper printing with Sinar Mas Group(Indonesia), one of the global paper giants. The project, with a total investment of 20 billions RMB, occupying a land mass of 2500 mu (equivalent to 402 acres) and with the ultimate production capability of 2 million tons of paper per year, is aiming at creating a paper producing base in Shanghai and will be completed in 4 steps.
The Sinar Mas Group already takes 1/3 of the paper market in China and is heavily engaged in forest cultivation in Hainan, Guangxi and Yunnan provinces, in an attempt to create a circumstance of balanced paper production and forest protection. Several Japanese and Switzerland ink manufacturers have set up joint ventures successively in Tianjin Municipal City, Shenzhen-Guangzhou Province, Shanghai Municipal City, Hangzhou-Jiangsu Province, Guangzhou-Guangzhou Province, and Shanxi Province. Japan Meiji Gum Co. Ltd. has set up a blanket factory in Shanghai.
In short, the localization of global material manufacturers has consolidated their production and business bases in China, gradually making the local market internationalized. The localization of overseas material enterprises have apparently been progressing at a much faster pace than the machinery enterprises. This is an issue worth further study.
The Chinese printing Industry, like all Chinese industries, will stick to 'opening-up' policies all the time. Even if one day, the printing machinery and material industries have grown up, China will still need to introduce and absorb advanced technology, equipment and material, and to improve technology structure of the industry and quality of all products.
I hope the rest of the world take on board some of the same policies as the Chinese. If not, the Chinese will win the world market place. All of the many world industries need to train people of all ages, and use their skills and experience as do the Chinese, who train all people who wish to work and have the attitude to be successful.