After chatting with Boss Zhu, Fan Wubing put down the phone and was planning this matter in his mind.

Papermaking is a heavy asset industry. For every 10,000 tons of pulping capacity added, about 100 million yuan is required. For every 10,000 tons of whiteboard with a capacity of 10,000 tons, the investment amount will be around 40 million yuan.

The severe pollution problem of small papermaking enterprises has caused a headache for the government. In order to raise the industry entry threshold and reduce the number of papermaking enterprises approved by local governments, the State Council has also issued a temporary regulation on the papermaking industry. The introduction of this temporary regulation has increased the starting scale of new projects. According to Boss Zhu, the State Council intends to include imported paper cutting machines, waste paper crushers, pulping machines, papermaking machines and other equipment in the "Catalogue of Imported Commodities Not Exempted for Domestic Investment Projects" in the "Catalogue of Imported Commodities Not Exempted for Domestic Investment Projects" in the "Catalogue of Imported Products Not Exempted for Domestic Investment Projects".

Fan Wubing is naturally very clear that once this policy is implemented, it will have a great impact on papermaking companies. However, according to Boss Zhu, my country will allow companies to deduct the value-added tax contained in newly purchased equipment, which is also a major turning point for the huge investment in the paper and paper products industry.

Close a window and open another door. It is still difficult to say whether it is a pros and cons, but one thing can be said that the domestic papermaking industry will face a very big change, and the survival problems of small and medium-sized papermaking enterprises will be solved in a short period of time. They are facing two paths, one is to let themselves die, and the other is to be acquired by large papermaking enterprises and take the path of joint development. Apart from this, there is no other way.

Not long after, Davis, the head of the Shanghai headquarters, had a video call with Fan Wubing and reported to Fan Wubing on the recent investigation results in the domestic paper products market.

Most of the products in the papermaking industry are domestically sold. Compared with export-oriented industries, the peripheral economic situation has a relatively small impact on the papermaking industry. However, in the industrial chain, since the downstream customers of paper products are greatly affected by the financial crisis, after the Southeast Asian financial crisis, domestic orders have also decreased and enterprises have compressed production in large quantities. Affected by this, the sales of paper products have been greatly impacted and overcapacity has occurred.

"The financial crisis has greatly impacted enterprises mainly engaged in export trade, and export goods have dropped a lot. These companies are the main customers of digesting paper products. Due to their compression production, the market in the paper products industry has shrunk. This is inevitable, because the paper products industry is only one link in the entire industrial chain, and there are problems with the economic environment. A single enterprise or industry will definitely be affected." Davis analyzed the overcapacity of the paper products industry.

In the past one or two years, the domestic paper and paper products industry has been in a period of rapid expansion, but in the process of rapid expansion, many companies have encountered financial difficulties.

Davis told Fan Wubing, "Some small and medium-sized enterprises in the industry have encountered financing difficulties, and even some large enterprises have also encountered tight capital chains. Financing funds has become an important bottleneck that affects the exhibition of domestic papermaking enterprises."

At present, the fund settlement methods of most papermaking companies in China are lagging behind. Suppliers generally have to wait until the customer sells the product before they can get the payment. This process usually takes three months, and some even take six months.

At present, due to the Southeast Asian financial crisis, customers have problems in sales, resulting in manufacturers, suppliers, etc. being unable to get payment on time or even failing to get the goods, resulting in a shortage of funds.

In this current economic situation, saving money may be a measure taken by many companies, but Davis believes that the paper industry can save greater costs through effective management and operation. He said that the era of cash as king has arrived, and companies must have money in their hands and not panic in their hearts.

"These are not a big problem for us, but since we want to enter this industry, we must have rules and keep our minds undisturbed. What suggestions do you have for this?" Fan Wubing naturally has no worries about funds, but since he wants to enter the market, he must have the patience to follow the industry's laws and adapt to the environment and go with the trend. It is also important to just know that it is wrong to spend money in it, and at least the company can operate it effortlessly.

Davis said to Fan Wubing, "Actually it's very simple. I have studied this issue seriously. First, companies should reduce unnecessary procurement expenses, minimize management costs, and reduce corporate daily expenses. The global online office management system we currently use can solve this problem to a large extent and has innate advantages, which is incomparable to them. Second, the paper industry must join forces with suppliers and overcome difficulties with downstream customers. For example, the settlement period between the two parties was two months, but now it will be shortened to one month, which can also reduce each other's financial pressure."

"If you do this, the pressure on suppliers will increase, which will easily lead to their negative response." Fan Wubing hesitated.

Davis replied, "Even so, they have no other choice."

Papermaking is a capital-intensive industry with a very significant economies of scale. In terms of capital, the papermaking industry's output value of 100 yuan occupies fixed assets equivalent to that of petrochemical, metallurgy and other industries. Especially for high-end product production lines, a high-end paper with a capacity of about 100 million yuan is required for every 1000 tons of high-end chemical pulp, and a high-end chemical pulp with a capacity of about 1050 million yuan is required for every 1000 tons of high-end chemical pulp. Paper projects are often worth billions of investment.

In terms of scale, the average scale of the world's pulp mill last year was 210,000 tons, including 380,000 tons in North America, 330,000 tons in Japan, Indonesia, and South Korea in Asia, 200,000 tons in Western Europe, and the average scale of the world's paper mills was about 80,000 tons, including 180,000 tons in North America, and 80,000 tons in Western Europe, Indonesia, South Korea and Japan in Asia.

As for a single production line, the scale of pulp mills that currently produce wood pulp in the world is generally believed to be more than 300,000 tons, and the output of cardboard paper machines is generally believed to be more than 150,000 tons.

The characteristics of capital-intensiveness and economies of scale in the paper industry determine the special significance of funds for papermaking enterprises. The self-accumulation of production and operation obviously cannot meet the needs of rapid expansion of enterprises. More importantly or more effective is achieved through capital operations and external transactions.

Therefore, Davis said that suppliers have no other choice. After all, the demand for paper products in the domestic market is growing, but there are only a few domestic paper companies, especially large paper companies. There are very few companies that can produce some high-end paper, so this is a seller's market.

There is no other reason, because there are too many investments in high-end paper, and the entry threshold is very high, and ordinary companies cannot afford it. Even if you raise money, you have to consider the pressure of funds. After all, there are these foreign-funded enterprises around you. With their old capital, they can immediately drag you down. When they pull the price back, there are no rivals.

However, compared with the high investment, the profit margin of some projects has decreased compared to before. Taking copper plate paper as an example, the price was as high as nearly 10,000 yuan a few years ago, but the average price in the market is about 9,000 yuan. Although it has an impact on changes in raw material costs, it is an indisputable fact that the profit margin of copper plate paper products has become thinner.

The reason is that in the past planned economy era, due to funding constraints and the cumbersome national approval procedures, the project was launched very slowly. For example, a coated paper manufacturer with a production capacity of only 10,000 tons could occupy the leading position of the industry for decades. In this case, if a papermaking company produces high-end new products that are popular in the market, few competitors can keep up in the short term, and the company can obtain high profits for a long time.

However, with the development of the domestic economy, investment entities have diversified in recent years and expanded approval authority. When a high-profit new product appears in the market, other companies and investors will follow up quickly, and new projects will be completed and put into production soon, which will make the supply of this new product in short supply and greatly shorten the cycle of obtaining high profits, and the actual return on investment of the project may be lower than expected.

Chasing profits is the nature of capital. When the huge investment does not meet the expected results, will capital continue to invest in the papermaking industry? Of course, the answer is no. Therefore, except for a few foreign-funded papermaking companies that have already gained advantages in land grabbing, such as Jinguang App, China, it has no foreign-funded enterprises in this industry recently. As for the new domestic projects, they are just some private small and medium-sized papermaking companies.

After reporting to Fan Wubing for a while, Davis said to him, "In fact, if it weren't for the internal information you provided by your boss, I think we might replace the status of foreign-funded enterprises such as Jinguang App in China, I would not agree with investing in the paper products industry."

"Why?" Fan Wubing asked curiously. Davis didn't object to his opinion much.

"It is because of the arrival of the information age that it has a huge impact on the traditional paper industry." Davis replied.

In terms of function, paper can be mainly divided into industrial packaging paper, domestic paper, newspapers, and exhibitions of astronomy and information technology. Some people have predicted that due to this, the demand for paper will decrease, but the actual situation in the past two years is that the consumption of cultural paper has not only not decreased, but has grown rapidly.

The reason for this phenomenon is that with the application of network technology, the amount of information people obtain has increased sharply. Even if the information that needs to be printed is only a small part of network information or email, the actual paper usage is relatively large.

But just when people think that previous judgments were wrong, things are changing.

With the development of electronic information technology, especially information storage technology and information browsing terminal equipment, cultural papers as carriers of information records have been subject to alternative impacts.

For example, the emergence and rapid development of mobile hard drives and USB devices have made paperless offices a reality. In particular, the Internet 1, Ads1 broadband and optical cables can be connected to ordinary people's homes, wireless Internet access and mobile Internet access are becoming increasingly popular. People communicate, communicate and learn through the Internet. These things that were originally covered in high-tech have become part of people's daily lives with the sharp drop in their prices.

"Your consideration is not wrong, but you have to see other aspects." Fan Wubing expressed his understanding of Davis' concerns, and he also said, "Although office paper is being reduced, the use of paper in other aspects is increasing, one is increasing and the other is declining. The use of paper products is still increasing rapidly in terms of total volume. We don't have to worry about the shrinking market."

In fact, due to the development of new technologies, examples of traditional products being impacted were born. For example, in the early 1990s, the state invested heavily in establishing the Dalian Hua Video Recorder Manufacturing Factory, but the project was just completed and was hit by the emerging VCD machines on the market, and the company was in a slump.

For the papermaking industry, industrial paper and domestic paper will have greater consumption demand with the development of society, but the consumption of certain categories of cultural paper may be affected or even severely shrink. The exhibition of electronic technology has a huge impact on the replacement of certain cultural papers, and may have a revolutionary impact like the complete replacement of VCD video recorders. This is an issue that papermaking companies must consider when investing in projects in the future, and it is also a shadow that affects the development prospects of existing cultural paper manufacturers.

But overall, as long as you choose the right investment direction, you can avoid this trouble and effectively develop yourself.

"However, one thing we need to pay special attention to-" Fan Wubing touched his chin and said to Davis in the video. "The conflict between the Internet today is very large in terms of traditional media. It can be expected that in the future, the circulation of newspapers will be greatly affected, but the demand for books will increase, especially the number of textbooks will increase to a large extent. This should be a direction we need to pay attention to."

"The boss is really far-sighted and admirable." Davis exclaimed sincerely. In his eyes, or experience, Fan Wubing has never made any mistakes in these general directions. This time, his inference on the paper products market is also in line with his investigation results in recent days.

However, my conclusions cannot be as accurate and clear as my boss, and can only be said to be a slightly exposed trend.
Chapter completed!