Guitang takes the lead in bagasse-based tissue with two new machines in south China

Using abundant and cheap bagasse fibre as the raw material, Guangxi Guitang will be adding 50,000 tons/yr to Chinese tissue capacity next year. If all goes according to plan, the company may well add more machines as it strives to become the biggest Chinese tissue producer.

Hugh O'Brian

Chinese tissue producer Guangxi Guitang is not a big player in the tissue business. Not yet at least. But Guitang is looking to make a big impact on the Chinese, and perhaps the world's, tissue industry when it starts up two new tissue paper machines later this year.

Using a high proportion of bagasse as the raw material, they will be the first in the world to use this fibre for high-speed production of higher-quality tissue. Bagasse, also known as sugar cane fibre, is a by-product from the company's major sugar making operations. Guitang has been using bagasse as its fibrous raw material on slow running paper machines for printing and writing grades since the 1960s, and for tissue making since the mid-1980s. The Guitang Group, located in the city of Guigang in the southeast of Guangxi, a southern province in the P.R. of China, started as a sugar producer in the 1950s. Over the years it has grown and developed so that today it is China's largest sugar producer. In the mid 1960s the company first ventured into papermaking, using the bagasse fibre for printing and writing paper. Today it makes about 85,000 tons/yr of these grades mainly based on bagasse. Later, in 1985, the group made its initial move into the tissue business, again using bagasse as the raw material.

The company's president Mr. Yang Herong explains: "When we sought to expand the paper operations of our company, we realized that bagasse had quality limitations when it comes to fine paper. As quality requirements for fine paper have moved up in China in recent decades, the limitations of bagasse have been a disadvantage for us since the short fibre length gives lower strength than wood fibres. Therefore we decided that it made much more sense to focus on tissue. For the foreseeable future, we will continue to make fine paper on our existing machines, but we don't plan to expand in that area."


Tissue will clearly be the growth area for Guitang in the future. Total tissue output from the group's tissue company, known as Guangxi JeiBao Paper Co. Ltd., is now only around 20,000 tons/yr made on 18 small paper machines. These PMs are all domestically produced and run at speeds of 60-100 m/min. The product, Yang says, is a pretty basic economy brand of tissue.

Sensing that the Chinese tissue market offered an extremely good opportunity for future growth, Guitang started a research program in 1990 to study the possibility of using bagasse for higher-quality tissue made at high speed. Continues Yang: "We have lots of small tissue machines, making a total of 20,000 tons/yr and employing about 1,000 workers. But the quality is inconsistent from these small machines. To tap the true potential that bagasse offers for tissue products, we realized we needed to make a revolutionary jump upwards both in terms of quality and quantity. So in 1990 we started a project to see if our idea to use bagasse to make higher-quality tissue on modern machines was realistic". That research proved successful with Guitang carrying out extensive testing and pilot trials with numerous western suppliers. The most extensive trials were run on the Voith Andritz pilot tissue machine in São Paulo, Brazil, in order to confirm the suitability of Guitang's bagasse pulp for tissue production on fast Crescent Formers. These tests also sought to determine the maximum input of bagasse pulp. Trials with different ratios of wood pulp (HW or SW+HW) and bagasse were run in 1-layer and 2-layer headbox configurations, with the result being that Andritz recommended a 2-Layer headbox, with wood pulp used on the Yankee side (generating good hand feel) and bagasse on the hood side, so that it does not stick to the Yankee. Following these trials, the company then took the important decision in 2001 to install the two big tissue machines.

The total investment is on the order of RMB 300 million or USD 40 million. The two new 2.7-m wide Crescent Former PMs from Andritz will have a design speed of 1,500 m/min. Each has a capacity of 25,000 tons/yr, thus increasing Guitang's tissue by 50,000 tons/yr, to 70,000 tons/yr. The present schedule calls for the first paper machine to start in the first quarter of 2003 and the second one should be on line in the second quarter. By the end of 2003 Yang expects them to be running close to full speed. The paper machines will be followed by two Perini Sincro converting lines to make both toilet rolls and kitchen towels. "With the new machines up and running," says Yang, "we will be among the top five tissue makers in China, up from our present ranking at number 11. Our target is eventually to be the number one tissue producer in China. So, if all goes according to our plan, I certainly expect to add more bagasse-based PMs in the near future". Raw material supply should not be a problem as the Guangxi region is the major sugar cane growing area in China. Thirty-five million tons of cane are harvested there each year, which produce more than four million tons of bagasse as by-product. The total amount of bagasse needed by Guitang Group for tissue production will take only 10% of the annual yields in Guangxi.

ECONOMIC AND ENVIRONMENTAL ADVANTAGES. "Being the first company in the world to run bagasse on a high speed tissue machine puts us in an interesting position," says Yang. "We are proud to be leading the way in this area, and confident that we will be successful in using the environmental and economic advantages that bagasse offers. The cost of the bagasse is very low as it is a by-product of the sugar process. That certainly gives us a major economic advantage compared with other producers." Guitang will of course be using some purchased wood pulp on the machines, to get the desired strength properties needed for runnability. For the lighter weight facial grades, the mill will use perhaps 40% wood pulp, while for the more standard toilet grades the proportion will be on the order of 20-30% wood pulp. For heavier towel grades, says Yang, wood pulp will make up only about 10% of the furnish. While going from running small machines at 60 m/min, to big machines running at 1,500 m/min is a big jump to make, Yang is confident that it will be successful.

'We have selected the best equipment and have carried out a very extensive training program from top to bottom. We have hired 100 new employees, all with college degrees, so we have a highly-educated, highly-trained workforce. Combined with the suppliers' expertise and high technology equipment, we really don't think the operation will be too complicated." "Of course we are taking a big risk by investing so much money," continues Yang, "but we are very confident that bagasse is the right raw material. We have carried out extensive research over more than 40 years and feel we are experts in these fibre characteristics and properties. So we are taking a risk but expect to be justly rewarded as well."


To run the higher-quality tissue business, Guitang will establish a new company to distinguish it from JieBao, which is the company making the more basic tissue on the slower machines. Yang explains: "We will form a new company to operate the big paper machines and converting lines. We haven't actually decided on the name of the company yet, but we are considering something like The Natural Paper Company (Tian Ran in the Chinese 'Pinyin' phonetic pronunciation). We feel that, because we are using bagasse, a raw material that would otherwise be burned, we are making a strong environmental contribution. We want to make sure that we convey that important environmental message and image to the market".

The company's business plan calls for about 70% of the tonnage to be converted on the Perini Sincro machines, with the major product being toilet paper, which will make up 90% of the converted output. Guitang will also be selling something like 30% of the tonnage as jumbo rolls to smaller converters in China. It may even export some tonnage to neighbouring countries such as South Korea and other converters in South East Asia. Guitang considers its core market to be the region in a radius of 800 km from its mill, which includes a population of roughly 300 million people. As transportation costs for bulky tissue are of course a very important factor in profitability, the company is also considering setting up its own small converting plants nearer to some of the bigger cities in Southwest China. Jumbo rolls would be transported via ship and train to these 'mini mills' which would be nearer the population centres, thus reducing total transport costs.


Yang says that he is currently exporting a small quantity of tissue, on the order of 250 tons/month, to the USA mostly in the Los Angeles area. He intends to continue and perhaps even increase this business after the new PMs start. "It is part of our market development strategy to be selling some of our products on the international market. If we can sell into the US market, our products will get a better reputation and this raises the whole brand image. In addition the selling price is quite good in the US."

WITH SUCH AMBITIOUS PLANS, AND AN IMPORTANT COST ADVANTAGE BASED ON THE CHEAP BAGASSE FIBER, Guitang will certainly be a tissue producer worth following closely over the coming years. Concludes Yang: "I strongly believe in the tissue market in China. I think that the recent market conditions, which have been a very competitive situation with poor pricing, are only temporary. I am very optimistic about the potential of this market, although that does not mean that I will make money. We will have to continue to work in a very smart manner to make that happen."

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