Jeonju Paper's Transformation by Newspaper Paper Company... Accelerating Structural Improvement with Corrugated Cardboard

Investing 20 Billion KRW in Corrugated Board Equipment... Securing Annual Production Capacity of 800,000 Tons
Following Taelim Paper, Rising to 4th Place in the Industry... Possibility of Additional Investments
Demand Declines Due to Newspaper Industry Slump... Reduced to One-Third in 10 Years
Demand for Corrugated Board Increases with Growth in Parcel and Delivery Services... "Industry Landscape Change Inevitable"

Jeonju Paper logo. [Photo by Jeonju Paper]

[Asia Economy Reporter Lee Junhyung] Jeonju Paper, which once produced about half of the domestic newsprint, is transforming into a corrugated cardboard manufacturer. Through facility investments, Jeonju Paper will secure production capacity at the industry’s fourth-largest level by next year. This is part of business diversification in response to the continuous decline in newsprint demand. It is expected that other newsprint manufacturers will also undergo similar transformations.

According to the industry on the 19th, Jeonju Paper is investing 20 billion KRW to expand its corrugated cardboard base paper production facilities. With this investment, Jeonju Paper’s annual production capacity for corrugated cardboard base paper will increase from the current 600,000 tons to 800,000 tons by early next year. In terms of production capacity, Jeonju Paper will rise as a major corrugated cardboard manufacturer. The 800,000-ton production capacity Jeonju Paper will secure ranks fourth in the industry, following Taelim Paper (1.3 million tons), Shindaeyang Paper (1 million tons), and Asia Paper (950,000 tons).

Jeonju Paper first entered the corrugated cardboard market in 2019. In 2018, Jeonju Paper refurbished two of the four paper machines (machines that produce paper) that were producing newsprint and other papers to establish corrugated cardboard production capacity. Through this investment, the company will convert one of the remaining two paper machines that produced newsprint into a corrugated cardboard production machine. This is seen as a full-scale effort to improve the company’s structure by shifting its main product from newsprint to corrugated cardboard. Jeonju Paper also announced last year through its innovation project ‘TOP21 (Total Operational Performance 2021)’ that it would strengthen its corrugated cardboard business starting this year.

Jeonju Paper is also considering additional investments. This is due to the surge in demand for corrugated cardboard amid the rapid increase in parcel volumes driven by the spread of non-face-to-face services. The industry also notes the impact of Daeyang Paper, which produced about 7% of domestic corrugated cardboard, losing all two of its paper machines in a factory fire last October, creating a gap in the supply chain. As a result, a ‘corrugated cardboard crisis’ occurred from the second half of last year to early this year, turning the market into a supplier’s market. A Jeonju Paper official said, “There is naturally a possibility (of expanding investment),” adding, “We can continuously expand production facilities depending on market growth.”

The recent mixed fortunes in the paper industry are the background behind the decision made by Jeonju Paper, a newsprint company with a 50-year history. As the newspaper industry shrinks in the digital era, demand for newsprint has shrunk every year. On the other hand, demand for corrugated cardboard has been increasing daily, supported by the growth of the parcel and delivery markets. According to the Korea Paper Association, domestic newsprint production last year was 570,000 tons, down to one-third compared to 1.56 million tons ten years ago. During the same period, domestic corrugated cardboard base paper production increased by 41.6%, from 4.08 million tons to 5.78 million tons.

Given this situation, another newsprint manufacturer, Paper Korea, is also ramping up its production of corrugated cardboard base paper. Paper Korea supplies newsprint to major domestic newspapers. Like Jeonju Paper, it is interpreted as a strategy to diversify business into corrugated cardboard base paper production amid the slump in the newsprint industry.

The industry expects the shift in main product types among newsprint companies to continue. An industry insider said, “Securing corrugated cardboard production capacity by newsprint companies is a change for survival,” adding, “While newsprint demand continues to decline, demand for corrugated cardboard and white paperboard is increasing daily, so changes in the industry landscape seem inevitable.”

This content was produced with the assistance of AI translation services.