Overview of Japanese Paper Recyclingapki.net/wp-content/uploads/2014/09/11-Masafumi-Hongan-PPT-EN.… · Recovered Paper Journal Largest Domestic Users of Recovered Paper (Paper Recycling

Developments in the Japanese Paper Recycling Industry, and

How the Government Facilitates the Sector

Sep 24, 2014

Masafumi Hongan

Recovered Paper Journal


The Characteristics of Japanese

Recovered Paper

Quality

Stability Reliability



Sorting Rules in Yokohama-City


Recovery Volume and Rate

(Source: PRPC)

40

45

50

55

60

65

70

75

80

85

90

0

5

10

15

20

25

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

recovery volume

recovery rate

Million tones Percent


Major Sources of Recovered Paper

and Collection System


Legal Framework for

Paper Recycling Business

• Waste Management and Public Cleansing Law enacted in 1970

• An exception to the law applies to four recyclable materials ( Paper, Iron, Clothing, Glass)

• Anyone can enter a paper recycling business without special permission.

• Divided recyclable business sector and solid waste business sector by law lead to defend co-mingling as material itself


Status of Recovered Paper

Processors (Packers)

• 1000 packers

• 1850 baling plants

• Most are independent middle and small –sized companies

• Many long-established companies

• Deep-rooted in a certain area as local industry

• No state-owned companies and a few paper manufactures’ subsidiaries


Largest Recovered Paper

Processors in Japan (Estimated, 2013)

Company Name Headquater Dealing Volume

(Million tons) Baling Plant

Omoto Shiryo Kobe 1.20 83

Miyazaki Aichi 1.10 57

Daiwa Shiryo Osaka 0.72 16

Kinoshita Kawasaki 0.70 25

Matsumoto Mitsuharu Shoten Kagawa 0.66 11

Fukuda Sansho Aichi 0.60 20

Hokkai Shikan Sapporo 0.60 20

Kitakanto Tsusho Ibaraki 0.50 24

Kurihara Shizai Tokyo 0.50 15

Oji Saito Shigyo Tokyo 0.45 13

Okubo Tokyo 0.45 16

Kaneko Shizuoka 0.45 18

Sanko Shigyo Tokyo 0.42 15

Yamamuro Tokyo 0.40 14


Specific Dealing Practice in

Domestic Market

• Packers prioritize local mills with supply even when export prices are surging

• Japanese makers purchase a stable amounts of recovered paper with stable price, monthly

• Even if the finished paper price hike or change, recovered paper price hardly does

• Reliability comes first in dealing. Packers and makers have built a strong relationship


Largest Domestic Users of

Recovered Paper (Paper Recycling Promotion Center, 2013)

Company Name

Consumption Volume

(Million tons) Product Grade

Oji Holdings 3.98 all grade

Nippon Paper Group 2.98 all grade

Rengo 2.27 paperboard

Daio Paper 1.93 all grade

Marubeni Group 1.30 printing, paperboard

Tokushu-Tokai Paper 0.54 printing, paperboard

Hokuetsu-Kishu Paper 0.28 printing, paperboard

Ehime Paper 0.18 paperboard

Okayama-Paper Industires 0.16 paperboard

Chuetsu Pulp & Paper 0.15 printing, paperboard


Recovered Paper Consumption

and Utilization Rate

0

10

20

30

40

50

60

70

0

5

10

15

20

25

paperboard paper recovery rate(Million tons) (%)

Utilization Rate of RCP Paper 41%

newspaper 75% Printing&Writing 27%

Mechanical 13% Woodfree 57%

Wrapping 5% Tissue 53% Others 2%

Paperboard 93% Total 64%


Why Paper Grade Production is

Decreasing Slowly in Japan?

• Green Procurement Law - Enacted in 2003, obligates government authority and offices to use recovered paper pulp product

• News and publications depend on paper-The slow shift to digital devices supports paper consumption. Over issues are included 20-40%

• The resale price maintenance system has implemented by the Japanese government


Tissue Grade Production Recovered Paper Pulp VS Virgin Pulp


Document Destruction Industry;

Major Three Types of Service

• Personal Information Protection Law enacted in 2003

• Market scale is about 1.3 million tons

• Over 300 companies provide document destruction services

• Three types of document destruction services; on-site shredder, shredder facility and direct melting in mill


Largest User of Secret

Document at Paperboard Mill [thousand tons, 2013, estimated]

【Directly Melting Mill】 • Koa Kogyo (Marubeni group) – 36 • Iwaki Daio – 20 • Oji Materia Edogawa Mill– 20 • Nippon Paper Soka Mill – 8 • Otsu Itagami (Daio group) – 6 • Rengo Yashio Mill – 6 • Rengo Amagasaki - 2 【Shredded User】 • JP corelex group – 36 • Marutomi Paper – 24 • Tsurumi Paper – 18


New Investment for Recovered

Paper Consuming Mill [thousand tons per year]

Company Location Capacity Date Grade Notes

Iwaki-Daio Paper (Daio Group)

Iwaki-City, Fukushima

144 2014:Q3 Recycled light

Weight Linerboard/ Recycled Medium

Conversion

Marusan Paper (Rengo's subsidiery)

Minamisoma-City, Fukushima

180 2014:Q4 Recycled Linerboard Scrap &

Build

Tokusyu Tokai Paper Shimada-City,

Shizuoka 18 18

2014:Q3 2015:Q4

Recycled Paper Hand Towels

Scrap & Build

JP Corelex Group Fuji-City, Shizuoka

60 2015:Q1 Recycled Toilet

Tissue Scrap &

Build


Supply-Demand Gap in Domestic Market and Import-Export Quota

-2

-1

0

1

2

3

4

5

6

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

supply-demand gap import volume export volume(Million tones)

Scarc

ity

Surp

lus

Import-Based Market

Export-Based Market


Company Name Export Domestic Total

Dom

estic

Capital

Nihon Pulp & Paper 510,000 834,000 1,344,000

Kokusai Pulp & Paper 420,000 970,000 1,390,000

Nisho-Pulp 260,000 240,000 500,000

Japan Office Pac 250,000 - 250,000

Marubeni Paper Recycle 96,000 404,000 500,000

Fore

ign C

apital

America Chung Num Japan 1,400,000 - 1,400,000

Touch International 375,000 - 375,000

Nishi-Tokyo Tsusho 350,000 - 350,000

Yamahatsu-Nihon 300,000 - 300,000

Ecomato Industry 220,000 - 220,000

Cycle Link 200,000 - 200,000

Toho-Bussan 192,000 - 192,000

Nihon-Materio 105,000 - 105,000

Others 210,000 100,000 310,000

Total 4,888,000 2,548,000 7,436,000

In 2013, Mitsuya-Sansho, Toyotsu-Certec and PR International withdrew from RCP trading business and KPP acquainted Sumisho Pulp & Paper.

Domestic, 30%

Foreign, 70%

By Capital about share of export volume

Packer, 84.8%

Trading Company,

15.2%

By Procurement Sources of domestic manufactures

Largest Japanese Exporters of

Recovered Paper [thousand tons, 2013, estimated]


Price Fluctuation

Domestic Price VS Export Price （yen／ｋｇ）

※Shipping price at packers

0

5

10

15

20

25

30

Jan

-08

Ap

r-0

8

Jul-

08

Oct

-08

Jan

-09

Ap

r-0

9

Jul-

09

Oct

-09

Jan

-10

Ap

r-1

0

Jul-

10

Oct

-10

Jan

-11

Ap

r-1

1

Jul-

11

Oct

-11

Jan

-12

Ap

r-1

2

Jul-

12

Oct

-12

Jan

-13

Ap

r-1

3

Jul-

13

Oct

-13

Jan

-14

Ap

r-1

4

OCC-domestic ONP-domestic

MIX-domestic OCC-export

ONP-export MIX-export


60

70

80

90

100

110

120

130

Jan

-05

Ap

r-0

5

Jul-

05

Oct

-05

Jan

-06

Ap

r-0

6

Jul-

06

Oct

-06

Jan

-07

Ap

r-0

7

Jul-

07

Oct

-07

Jan

-08

Ap

r-0

8

Jul-

08

Oct

-08

Jan

-09

Ap

r-0

9

Jul-

09

Oct

-09

Jan

-10

Ap

r-1

0

Jul-

10

Oct

-10

Jan

-11

Ap

r-1

1

Jul-

11

Oct

-11

Jan

-12

Ap

r-1

2

Jul-

12

Oct

-12

Jan

-13

Ap

r-1

3

Jul-

13

Oct

-13

Jan

-14

Ap

r-1

4

Currency Influence on the Net

Price to Export Market (JPN Yen / US Dollars) Oct. 2013

Price at $210 ($1=98JPY) 18.3Yen/kg

Sep. 2011 Price at $277 ($1=77JPY) 18.2Yen/Kg

Sep. 2008

Price at $285 (1$=107JPY) 26.5Yen/Kg

Currency Market


Concentration Ratio to China from Recovered Paper Exporting Countries

Country

Amount of Export (million

tons)

Top 5 of export destination and ratio

1st Place 2nd Place 3rd Place 4th Place 5th Place

1 United States 18.90 China 70.2% India 7.3% Mexico 5.6% South Korea 5.3% Canada 3.4%

2 Japan 4.89 China 79.2% Thailand 7.4% South Korea

7.3% Taiwan 6.2% Vietnam 3.8%

3 United Kingdom 3.05 China 71.4% Indonesia 6.2% India 5.6% Netherlands 4.2% Germany 3.4%

4 France 2.89 Spain 44.5% Germany 15.4% China 14.5% Netherlands 9.5% Belgium 9.0%

5 Germany 2.72 Netherlands 40.6% China 15.4% Austria 12.9% Switherland 10.5% France 7.3%

6 Netherlands 2.65 China 50.8% Germany 18.3% Belguim 10.7% France 4.4% Indonesia 3.8%

7 Canada 2.16 China 62.2% United States

33.7% South Korea

1.4% India 1.0% Taiwan 0.5%

8 Belgium 1.73 Netherlands 46.2% China 31.8% France 6.3% Germany 6.1% India 3.6%

9 Italy 1.69 China 55.1% Indonesia 9.3% Austria 9.0% Germany 8.7% Slovenia 3.9%

10 Australia 1.43 China 71.7% Indonesia 17.6% India 3.0% Malaysia 2.2% Vietnam 1.5%

11 Hong Kong 1.04 China 97.8% Philippines 1.2% Taiwan 0.6% Vietnam 0.6% Thailand 0.1%

12 Singpore 0.68 Indonesia 49.9% South Korea

13.3% Thailand 9.4% Bangladesh 8.4% Malaysia 7.6%


Four-Step-Model to Develop

Recovered Paper Market

STEP1

GDP $2000~

-Small production of paper & board per capita, while start collecting RCP

STEP2 GDP $5000~

-Emerging consumption of paper & board, depending import RCP

STEP3 GDP $10000~ -Exceed 100kg recovery volume per capita, either import or export based on the number of domestic mills

STEP4 GDP $20000~

-Turn to exporting country, and need to import some grade which export as finished paper

-India -Indonesia -Vietnam -Philippines

-China -Thailand

-Malaysia

-Japan -South Korea -Taiwan -Singapore

*GDP indicates per capita


More Recovery Effort to boost

Recovery Rate

• Ban on incineration policy conducted by some local governments

• Mining other papers (uncollected RCP) from household to reduce solid waste

• Diversification of collection way; expansion of new types of drop-off collection spots

• Document destruction service to cover small offices


New Types of Drop-Off Collection Spots


Quality Issues

• Mills check carefully RCP whether contain inferior goods and moisture at the time it delivers

• If contain those, manufactures track the supplier or the source to improve quality

• The three major inferior goods: thermal foaming coated papers, dye-sublimation paper and perfumed paper

• Paper Recycling Promotion Center promotes local authorities and related agency to give a further sorting effort


Industrial Associations’

Contribution

• Founded in 1974, consists of 35 manufactures and 536 packers

• Collect statistic :monthly consumption volume, estimated volume from paper manufacture

• Quality issue: share unusable materials and educate to improve recovery

Paper Recycling Promotion Center

• Established in 1977, consists of 809 packer members, 20 affiliated associations

• Encourages stable quality management and efficient supply chain

Japan Recovered Paper Association

• Founded in 1943 as forerunner, consists of 33 manufactures

• Statistic: monthly output, yearly detailed data

• Public relations about paper & paperboard industry

Japan Paper Association


Conclusion; Future Japanese

Market Projections for 2020 • Collection volume - almost stable around over 20

million tons by collection effort

• Recovery rate – increasing near to 90%

• Quality control – crucial issue to improve by all shareholders

• Domestic Consumption volume - Gradually declining

• Supply–demand gap(= export volume) - more expansion to about 6 million tons

• Diversify export destination – head to other Asian countries


About Recovered Paper Journal

• Exclusive magazine about the recovered paper market since 1992 (weekly, only Japanese edition)

• Covering market condition and current industrial news

• Articles based on original market price index, statistics and in-depth knowledge

• Contact me: [email protected]

Documents

Overview of Japanese Paper Recyclingapki.net/wp-content/uploads/2014/09/11-Masafumi-Hongan-PPT-EN.… · Recovered Paper Journal Largest Domestic Users of Recovered Paper (Paper Recycling