Asia's Pulp & Paper Sector Investing Heavily

Written by Jennis Jacob for Industrial Info Resources (Sugar Land Texas)

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Summary

Led by an increase in e-commerce packaging, Asia's paper sector is investing heavily in growth projects.

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Asian Paper Market Stays Strong

Asia is emerging as an active region for global paper mill investments, driven by a combination of factors like rising consumption, manufacturing expansion, and sustained demand from fast-growing end-use sectors. While several Western markets continue to face slower growth in graphic and printing paper grades, Asian economies (namely, China, Indonesia, and India) continue to attract investments toward new capacity developments as well as expansions.

The e-commerce boom has become the chief driver of rising demand for packaging-grade paper. At the same time, urbanization and rising disposable incomes have boosted consumption of tissue, hygiene and household paper products. Additionally, manufacturing sector expansion has meant an increase in need for industrial and specialty paper solutions. Government policies, aimed at promoting a circular economy, such as extended producer responsibility (EPR), green procurement, and subsidies for recycled content, are further accelerating the sector's growth.

With an export-oriented production approach, Asian countries are aggressively expanding their pulp and paper capacity, including integrated pulp and paper mills. As an example, China's machine-made paper and paperboard production reached 158.469 million tons (mt) with an 8.6% year-on-year increase last year. The country also was the top exporter of paper articles with exports worth US$29.8 billion in 2024.

Billions in Planned Spending

Industrial Info is tracking 451 active capital-spending projects worth more than US$34 billion geared at paper mills in Asia. While 44% of the investment is geared towards grassroot development, 48% is focused on plant expansions.

While China is attracting the highest spending, equivalent to over US$23 billion, Indonesia and India are attracting investments worth more than US$3 billion and US$1 billion, respectively. Countries like Malaysia, Turkey, Cambodia, Vietnam, Bangladesh and the United Arab Emirates are also attracting potential investments.

Asia's paper mill demand continues to strengthen, supported by ongoing production upgrades and rising end-use needs.

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