A visit to April's Rizhao, China, pulp mill
By Larry N. Montague

This past May, I had the distinct pleasure of meeting with personnel from APRIL's pulp mill in Rizhao, Shandong Province, China.

From the moment I walked into the corporate office building, I realized I was in the presence of greatness. The corporate story is told electronically in a wrap-around room complete with special effects that would make Walt Disney take notice.

A.J. Devanesan is president and COO. He has a chemical engineering background and is a fellow of the Wharton Business School. According to Devanesan, "At one time this mill was state owned. Over a five year period, other major paper companies had looked at [it] and actually considered buying it. With no offers in hand, my sales director visited the mill and came back and told me that I should take a look. I asked how much money were they asking, and he said book value. My chairman said it's a deal."

After the quick decision to purchase the mill, it took 1.5 years to complete the transaction and APRIL became the owner in August 2005.

ABOUT THE MILL
The Rizhao mill has the capacity to produce 2 million metric tpy of pulp and currently produces nearly 1.5 million metric tons. On May 31, 2012, it had its second largest production month with 125,000 metric tons; its best production month was 140,000 metric tons.

The mill makes all its bleaching chemicals on-site for its four-stage bleaching process. It has a 5,210 metric ton digester for acacia, two twin-wire pulp dryers capable of handling 2,800 metric tons each, and a 7,200 metric ton recovery boiler.

For the most part, the mill uses acacia and eucalyptus chips sourced from China, Thailand, Australia, Malaysia, Vietnam, and Indonesia. Cost and yield are key drivers for the mix.

The mill's current effluent COD is between 60-70 mg/l, with plans to reduce it to 50 mg/l (the standard in China is 100 mg/l.)

Chips arrive in ships owned by APRIL. The company currently owns 7-8 custom built ships and has 12 more in the pipeline. APRIL studied the Japanese and Korean port-based industries and fashioned this mill to be port-based instead of forest-based.

APRIL designed the mill to exceed national environmental standards; they began with the best worldwide standards and exceeded them by 10 percent. The company plans ahead and allocates a very large budget to environmental protection.

THE FUTURE
APRIL may expand in pulp in the future but is currently being very prudent. It has faced financial crisis in the past, and does not want to make a wrong step. It is currently looking at downstream expansion into liquid packaging, board, and tissue as sustainable and long term product lines, and intends to keep building to meet requirements of outside and internal integration.

APRIL is building capacity primarily for the Chinese market. It currently is at 45 percent capacity versus Chinese market pulp demand. It may export within a regional area or even to the West Coast of the U.S. In Indonesia it is building capacity for export.

While the average Chinese citizen currently uses only 35-40 kilos of paper per year, China boasts the two largest pulp mills in the world: One is owned by APP and the other by APRIL. Many smaller mills have been shut down--in China it seems bigger is better. Some 85 percent of the world's new paper products capacity has been installed in China during the past several years and today the country is a net exporter of paper.

Larry Montague is president and CEO of TAPPI and can be reached at: lmontague@tappi.org. This is just one of many stories Larry posts on TAPPI's Over the Wire newsletter, based on his visits to industry companies around the world.

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