China’s Ministry of Industry and Information Technology (MIIT) has reportedly sent a notice to 67 papermakers that they must reach a consensus to cut 6.35 million tons of annual output from the national market.
According to a report in the China Daily newspaper, “the low-end papermaking industry has become a key target of the government’s new measures to cut industrial overcapacity.” The newspaper does not define what MIIT considers to be “low-end” papermaking.
The government request is similar to ones MIIT has made previously to the copper and aluminum smelting industries, the steel industry and to cement producers.
An MIIT official quoted by China Daily says the government believes the output cuts can help resolve overcapacity problems and prevent air pollution, suggesting older mills with higher emissions levels are being targeted.
The paper producers have not been given much time to determine how to cut output, as the mills targeted for closure have been given a deadline to eliminate excess capacity by the end of 2013.
“Authorities won’t allow the companies to transfer the overcapacity to other facilities, according to the ministry,” says the China Daily report.
The same report indicates the paper industry is being treated lightly compared to the steel industry, where MIIT sees excess capacity of more than 160 million tons, and the cement sector, where the ministry estimates excess capacity of more than 300 million tons.