Bamboo tissue gets a big boost with Lee & Man investments in China

LEE & MAN PAPER has embarked on a very ambitious program to prove that bamboo is a great fiber for making tissue paper products. The company is adding two new tissue machines per year and by the end of next year will have at least eight. At the same time it is building what it hopes might become the world’s major bamboo based tissue brand, called Hanky.

Hugh O’Brian

If you have any interest in the potential that bamboo has as a fiber for tissue making, you might want to get on an airplane to Chong-Qing, China, not far from Chengdu. That’s because what must be the world’s largest bamboo based tissue making operation is in full expansion there at the present time.

Lee & Man Paper, one of the world’s largest producers of containerboard for corrugated packaging, is adding tissue machines at an astounding rate at its ChongQing mill. Two started up in 2014, two started up in 2015, two more will start in 2016 and the same in 2017. All are from established suppliers including Valmet, Voith and Kawanoe and are being built at an ultra-modern plant just next to the existing giant containerboard mill.

TAKING THE LONG ROAD. Getting to this point, however, has been a long journey for Lee & Man Paper. “Back in around 2005-06 we were only making containerboard,” explains Raymond Lee, the Chairman at Lee & Man Paper Group. “But we were thinking about diversifying into other paper grades, as a way to get better balance, and we had a couple choices. Tissue was one of them, as was printing and writing papers.”

At that time tissue seemed to be much too small, in terms of volumes and capacities, compared to the enormous containerboard capacity of around 5 million tons per year that Lee & Man was approaching. Instead of tissue, the choice was then made to explore printing papers instead with the requirement that the operation would have high control of its raw materials.

“The thought,” continues Raymond, “was that we didn’t want to go into any paper grade where we could not have complete control of the raw materials, meaning papermaking fibers. Because if we just imported market pulp, like many other printing and writing producers in China, we’d have no specific advantages. It would be just what everyone else was doing.”

So at that time the decision was made to build a small pulp mill based on bamboo fiber to feed a printing and writing paper machine. In Chongqing, in western China, there are vast resources of bamboo that grows fairly wild and nobody was using it. There can be entire forests of bamboo, or it can simply be growing on land that is not usable for anything else, like land that may be too steep to grow food. “So,” continues Raymond, “there is a lot of bamboo in this area and we were given the opportunity to build a pulp mill to use it.”

PIONEERING DID NOT WORK PERFECTLY. One thing led to another and in 2007 the company started a 100,000 ton per year bamboo pulp line, but when it was time to order and install a printing paper machine, the financial crisis of 2008 hit. That, says Raymond, took their attention fully back to their fundamental business of containerboard. So it could be said that this first pioneering effort with the bamboo pulp line certainly faced with some initial problems. “The financial crisis forced us to ask ourselves what we really wanted to do. We decided to forget about printing and writing paper, and stick to containerboard. As for the pulp line, we decided to just make bamboo pulp and sell it as market pulp, to see if we could make some money off our investment. And that’s what we did for a couple years, without any great success but no failure either.”

IN 2011, BAMBOO PULPING MADE ANOTHER HESITANT START, as Lee & Man Paper decided to make dissolving pulp from bamboo because dissolving pulp prices had nearly doubled in a very short time. This, however, essentially required a doubling of the pulp capacity, to almost 200,000 tons per year. Unfortunately dissolving pulp prices dropped quickly the following year and, although the capacity had been doubled, the dissolving pulp project was likewise dropped.

It should be said that these investments were tiny compared to the enormous cash flow generated by the containerboard business, so it never put the company at risk. Instead, in hindsight, these can be seen as creative diversification efforts seeking to extract advantages that Lee & Man Paper believed it had.


After going through these various scenarios, Raymond says that the company came back to tissue based on the perceived benefits it had in pulp costs as well as energy costs. By locating the tissue operation at the ChongQing mill site, it had the enormous infrastructure advantages, specifically steam energy. Another factor driving the decision to re-examine tissue was that the Lee & Man Paper bamboo pulp was being used by local tissue makers very successfully, and they were making money. So in 2013 tissue really got the green light when it was decided to install two Kawanoe tissue machines of 15,000 tons each, and almost simultaneously a Voith crescent former was ordered as well. The idea was to see which technology, the Kawanoe former or the crescent former, was most suitable for bamboo.

DO IT BIG . . . OR DON’T DO IT. In 2014 the Kawanoe machines started and jumbo rolls were sold to Chinese converters with immediate success, explains Raymond, at a much higher price than market pulp. This was all he needed to confirm the judgment that Lee & Man Paper should get into tissue in a big way.

“My philosophy with any diversification was that I wanted to do it big. Otherwise there was no reason to do it. Thus once we started the Japanese machines we gained a lot of confidence. So I immediately went ahead and ordered several more crescent formers.” The ordering process went like this: 2 Kawanoe ordered in 2013. 1 Voith and 1 Valmet in 2014. 2 more Valmet in 2015 and 2 Voith in 2015 as well.

BETTING ON A STRONG BRAND. The aim of all this activity is clearly to lead the way, and the world, in producing tissue paper products with bamboo fiber. Essentially about 70% to 75% of the fiber used in Lee & Man’s tissue is bamboo, with the rest being a mix of hardwood and softwood market pulp. Raymond is quite confident based on their experience so far that they will succeed. “In a sense you could say that, since we had been selling bamboo pulp to tissue makers for several years, we weren’t totally new to bamboo-based tissue. And some Chinese buyers were already buying bamboo-based tissue without really knowing. What we aim to change is that we will make a conscious effort to promote our new brand as a sustainable fiber.”

“IT’S CALLED HANKY and we plan to spend a lot of time and money to promote Hanky as the premium and number one brand of tissue made out of bamboo. Our bamboo is a FSC certified, sustainable fiber. This is important since the attitude in China has changed re-markably in the past couple years with respect to the environment. Bamboo fiber for papermaking involves absolutely zero controversy here in China. So it’s very positive. Of course recycled fiber is also seen as a good environmental choice, but frankly in China prod-uct safety issues have been huge recently, so with respect to a hygiene product, recycled fiber is totally rejected in China. And the product itself is just not the same quality as bamboo or wood fibers.”

LATECOMER USING MOST MODERN METHODS. Another strategy that Lee & Man Paper will use in the Chinese tissue market is to emphasize its extremely high level of automation and cleanliness in the tissue production process. As mentioned above there is a high awareness of product safety issues in China and for a hygiene product like tissue, it is a concern. Thus, Lee & Man Tissue will likely be promoting its automation and cleanliness aspects in its marketing efforts. 

Altogether, with the investment program covering 2014 to 2017, Raymond Lee estimates that between US$250-300 million will be spent to bring tissue capacity to about 320,000 tons per year. And although it’s not certain, the pace of investment will very likely continue at that same speed or even faster depending on how well the market adopts bamboo-based tissue. 

Being in China, which is generally a very rapidly expanding tissue market, is a big advantage. In addition, being located in western China means the tissue market growth rate is even higher, based of course on a very low level of present consumption.

“I THINK THERE IS CERTAINLY ROOM TO GROW,” concludes Raymond. “Perhaps not as quickly as in the past few years but we certainly should be okay for the next 10 years. And I desperately want to get this done and to establish Lee & Man Tissue as a major player in tissue, especially in bamboo-based tissue.” 

“I should add that we are an extremely careful company when it comes to financial risk so we are not making any reckless gambles here. But we are taking a calculated risk to grow and diversify, to add balance to our containerboard business.”

“So far the product quality is excellent, and we are improving all the time as we move up the learning curve. I think China will be a big market for us but in addition we have been working to explore major export markets such as the USA. I personally have been visiting buyers in the US and they really like the product and have shown a high level of interest. We just need to make a concerted effort to widely increase the awareness of bamboo-based tissue and the many positive aspects that it offers. We will shortly be getting to that.”

STAY TUNED . . . If you’re interested in bamboo-based tissue, Lee & Man Paper is a company to watch. And, as mentioned at the beginning of this report, you also might want to think about making a visit to Chongqing, China, sometime in the near future. *

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