Eastern horizons

​Introducing Wangqiu Song – Metsä Group’s recently recruited SVP, Asia and China – and his unique perspectives on both the Finnish and Asian pulp businesses. 


​Arriving in Finland as a young exchange student in 1987, Wangqiu Song couldn’t possibly have imagined how his fate would be intertwined with the country he would go on to make his home.

“In many ways, I entered the Finnish forestry sector thanks to a series of coincidences,” he explains. “After my studies concluded, my first job here in Finland was at Statistics Finland, the national statistics bureau. I was then offered a job in a quality-control project requiring a statistician to collect and analyse data – this was my first step into the industry.”

It wasn’t long before his employers realised the benefit of a Chinese-speaking emissary representing the Finnish pulp and paper industry in Asia. As Song explains, this went far beyond simply overcoming language barriers.

“Having the advantage of an understanding of both sides of the table, I would say that my role – in addition to that of business manager – has always involved a great deal of cultural interpretation for both parties in our dialogues and negotiations. The ability to read the situation correctly from each perspective is hugely important,” he says.

A new world

Turning his attention to the China of today, Song points out that recent legislative change in the country imposing severe limitations on the importing of all manner of waste materials, including recycled fibre, has had complex ramifications for paper makers and their suppliers.

Song explains that these bans were imposed for two reasons. He first cites the price China has paid for its economic growth, in the form of environmental damage during the past 40 years. Various decisive measures have been taken by the government to reverse the situation, among them limiting the import of waste materials. It may appear that to some extent recycled fibre has been indiscriminately lumped in with the other waste materials included in these restrictions.

“The second motivation here is the negative effects upon human wellbeing which have been caused by poorly sorted waste materials and other issues. In the past, when China has imported recycled paper, various other kinds of waste were combined in the same lots, including potentially harmful substances. This gave rise to pollution, which in turn carried health risks.”

While the government policies may lack refinement in their categorisations, Song sees them having been executed for valid reasons, while acknowledging that they have presented challenges to various industry players, particularly those paper mills primarily using recycled fibre as a raw material.

The journey to come

Might the change stimulate the market for fresh fibres? “If you don’t have enough recycled fibre, you use fresh fibre to substitute,” Song points out. “While this is a more expensive route, it also has its hugely positive aspects, including cleaner production processes and, of course, superior end products. This is especially the case, if you look at it from the packaged food safety point of view.”

Already last year, pulp imports into China grew by more than 12%, and Song believes around half of this growth was most likely driven by the shortage of recycled paper. In his wider evaluation of the current Asian pulp market, Song sees strong indications that China will require more and more import pulp for the paper industry. 

“For our industry,” he argues, “both recycled and virgin fibre are the main raw materials. Yet increasing demand for packaging material, tissue or hygiene products, or special applications – will be met primarily by virgin fibre for the future. The growth areas within the business in China look very positive compared to global metrics such as the growth of the economy and private consumption – driven by higher household income –, urbanisation, and the combat for a better environment in general.”

Song concedes that the consumption of newspaper and certain other paper grades has been in decline due to the downturn of print media in China, but all things considered, is confident that pulp demand is geared to grow.

Environmental factors have also weighed heavily in the circumstances leading to this market situation. At only 21%, forest cover is low in China relative to other pulp-producing territories such as the Nordics, and to compound matters, much of this resource is protected for ecological reasons.

As Song explains, wood harvesting in China was once uncontrolled, and replantation neglected or overlooked in the past. This level of deforestation has had severe implications for the environment, and in response, the central government has more recently adopted a strict policy of protection for forest areas, as well as wider harvesting bans. Although the country has invested significantly into new plantations, the supply of wood for local pulp production is still very limited in China.

“I envision this situation continuing for the next 10-20 years at least,” Song concludes. “Naturally, this bodes extremely well for the country’s trusted international suppliers of fresh-fibre pulp.”

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