Setting sail: exporting recovered paper to mills in China is the backbone of America Chung Nam's business - America Chung Nam Inc

Recycling Today, June, 2002 by Brian Taylor

While ACN's Nine Dragons mill consumes steady quantities of OCC, other brown grades and some mixed paper, the company seeks other material for its wider client base. "Some of the joint venture mills require old newspapers (ONP) for duplex board and newsprint, while some are tissue mills that we help supply with sorted white ledger (SWL)," says Wang.

The growth of Nine Dragons and the overall boom in the Asian papermaking industry has caused ACN to boost the amount of material it ships each year. "In 2001, we traded about 2.2 million tons of paper and pulp," says Wang. "What we're looking at for this year with the start-up of the new machine is between 2.5 million and 2.8 million tons." The growth, he adds, will largely be in the OCC and mixed paper grades consumed at the Nine Dragons facility, as well as ONP consumed at the joint venture mills.

Provided the Chinese economy stays strong, ACN's obligation to supply East Asia with recovered paper should only increase. Part of that obligation will be to another ACN-owned facility being planned for a town about 30 miles from Shanghai. "Some of the new capacity we'll need in the future will be for that paper mill, which will be coming online in 2004 and will have expansion phases scheduled for the next several years after that," says Wang.

"The Shanghai mill will be a 12 to 15-year project," he remarks. "And the original mill in Dongguan has more growth to come. In terms of our trading side, we're always interested in looking for long-term partners here in the U.S. to build our tonnage," says Wang.

When completed, the Shanghai mill will be able to produce three million tons per year of containerboard.

It will greatly increase the already considerable amount of recycled paper being fed into paper machines owned by ACN. The two paper machines already up and running in Dongguan are fed in part by a recycled fiber line that processes 1,100 metric tons each day.

Dongguan will eventually have two more paper making machines requiring feedstock, while the Shanghai mill may ultimately have more than four units.

"There's a lot of hard work in front of us," Wang comments. "Where are we going to find all that material? We'll have to spread our arms out a little more to cover it, and perhaps do some more procurement out of the Midwest. We also have room to grow in Europe, where our one office has been open for just two years."

A FAMILIAR DESTINATION

Thanks in part to the long-term, steady nature of ACN's buying and brokering practices, shipping to China has become more familiar and less intimidating to many U.S. paper recyclers.

"Over the years, we've been growing our business with the philosophy that we need to be honest, and we need to build dependable, long-term relationships,"' says Wang. "Things have to be win-win for both parties. We do not believe we can succeed all by ourselves in a vacuum."

In last year's interview, Ming Chung Liu said of ACN's suppliers, "they range from 10,000 tons per month suppliers to 100 tons per month small suppliers. Small and big suppliers are both welcome. Quality is the number one issue, and loyalty is important too."