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Fast Forward Magazine, winter 2004
The Flourishing Export of Waste Paper to China
Rotterdam welcomes Paper Work
The demand from China for waste paper as a raw material for new paper and cardboard is huge. All the products from 'the workshop of the world' after all need to be packaged. And the increasing level of prosperity in China itself has also boosted the demand for luxury and sanitary paper. Last year, China imported 425,000 40-ft containers filled with waste paper. The Dutch company Ciparo/Aim Reclaim is responsible for about 8000 of those boxes.
It seems a long time ago that china was
still a developing country. But at the end of the eighties and in the early nineties, there was already a
substantial demand for waste paper in China. During Mao's reign, all the forests in the country were cut
down. Consequently, wood fibres needed to be imported for the production of paper.The fact that the collection of waste paper became structurally embedded in densely populated western countries some twenty years ago was therefore quite convenient. Initially, the practice of paper recycling resulted in mountains of excess waste paper that were sold to Chinese paper plants at giveaway prices. An additional advantage was that this coincided with the repositioning of containers from the West to the Far East. An advantage that is still highly relevant today.
8000 Containers a Year
Otherwise, the situation has changed drastically. Now, China is the workshop of the world and the demand for packaging materials has soared. In 2000, China imported 3.7 million tons of old paper. In 2003, this had however already increased to 9.4 million tons, moved in 425.000 40-ft containers. Of this volume, 5.8 million tons came from the US, 1 million tons from Japan and 1.75 million tons from Western Europe (The Netherlands, Belgium, France, Germany and the UK).
For more than twelve years now, Rotterdam-based Ciparo (also known as Aim Reclaim) has been purchasing waste paper in western countries and in Japan. Via four sales offices in the Chinese cities of Beijing, Tianjin, Shanghai and Guangzhou, the company sells this waste paper to Chinese paper factories. Managing director Joris de Caluwé: "From our purchasing office in Rotterdam we acquire waste paper throughout Europe, but also rejected parties, sanitary paper and plastics. A contract for waste paper typically involves a thousand tons at a time, which equals forty 40-ft containers. Each month we handle about 15,000 to 20,000 tons. This means 600 to 800 containers, or about 8000 containers a year. A significant part of this is moved via Rotterdam.
60 Different Kinds Of Waste Paper
The best paper fiber is made from wood pulp, but waste paper is also a raw
material for paper and cardboard. Paper fibres can on average be recycled
six times. After that the fibres are too short. There are as many as 60
different kinds and gradations of waste paper with corresponding prices and
applications. The collection of paper is the most worthwhile in regions that
are economically prospering and have a high population density. In Germany
and the Netherlands, for example, 70 to 75 percent of all used paper is
collected again.
In the past, the price of waste paper would often strongly fluctuate. De Caluwé however says that there is a worldwide shortage of paper fibres at the moment. This has had a stabilizing effect on prices. "Ten to fifteen years ago, the Chinese used the strategy to alternatively purchase in America and Europe. In this way they were able to play parties off against each other and thus resulted in vast price fluctuation. In terms of percentage, more and more waste paper is being collected nowadays. But in absolute terms, the tonnage is declining. The worldwide recession for example means that newspapers have become thinner. Also, packaging is increasingly taking place more effectively due to packaging covenants. The demand for paper fibres however is so substantial that we are now purchasing everywhere, even in Australia."
Freight Costs
Due to the imbalance in container transport between China and Europe, the freight costs for waste paper are low. However, these costs can still mount up. The value of the euro in relation to the US dollar plays a role as do the banker surcharge due to the oil prices and the terrorism surcharge. De Caluwé: "In his trade, it is important to be very alert; details can make the difference." In the last fifteen years, the trade has also become considerably more professional. According to De Caluwé, legislation has become stricter. The purchasers of Ciparo regularly visit their suppliers to assess the quality. De Caluwé: "After all, we are active in the field of recycling. It is important that the materials we purchase do not contain any other substance. Our company is ISO-certified and we carefully see to it that our suppliers operate according to similar quality standards."
Logistics
Ciparo arranges the transport, in which the suppliers in most cases collect the containers themselves and deliver them to ECT (FAS = free alongside ship) Ciparo also uses forwarders to collect the paper (ex. works). De Caluwé: "We book the containers, see the closing time in consultation with the shipping company and take care of the customs formalities. ECT puts the containers aboard the ship. This works fine, they obviously know how to do this on time. And the hinterland connections from Rotterdam are also good. The containers from the Netherlands are usually moved by truck. If we procure the waste paper from abroad (usually large consignments) we also use barges or trains."
Once in china the customs formalities can take up quite some time. De Caluwé: "Two of my partners, who are fluent in Mandarin, work in China. It is not always easy doing business there. The human factor plays a huge role. We started out as small-time traders and perhaps that was a good thing. Because our company developed gradually, our risks always remained quite limited."
Fast Forward Magazine, winter 2004
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Ciparo BV Rotterdam, The Netherlands. Tel: + 31 (0)10 2136212
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