Did you know Domtar has a thriving international pulp business? Currently, Domtar has customers in more than 40 countries on five continents. Domtar Asia Limited, established in 2009, serves the growing pulp market in China and Southeast Asia.
The region does not produce enough of its own high-quality pulp to keep up with the growing demand for products like tissue, diapers, feminine hygiene supplies, specialty paper and fiber-reinforced materials. This is especially true in recent years as its economy has improved and more Chinese citizens move into the middle class. As a result, the market is ripe for imported pulp.
Lewis Fix, Domtar’s vice president of pulp sales and marketing, says the move into Asia was a good one. “China is the fastest-growing destination for market pulp, so it makes sense for us to be on the front end of this. Very little of what we sell into China and what’s produced in Asia comes back into North America. We’re supplying a need for this growing economy to produce tissue and specialty products for consumers who live in the region.”
The Domtar Asia Limited Difference
There are other pulp producers who sell in China and Southeast Asia, but Domtar Asia Limited takes a unique approach to serving this market.
“We opened our office in Hong Kong to be a direct sales and marketing arm in China and the broader region. A lot of other pulp producers work through intermediaries, but we chose to have a direct relationship with our customers,” Fix says. “They feel connected to where the pulp is manufactured and how it arrives on their shores. We also provide turnkey service for customs clearance, letters of credit and all of the necessary documentation. It eliminates the middleman and allows us to develop a closer relationship with our customers.”
Having a sales and marketing presence on the ground in Asia also lends a great deal of credibility to the company. It shows that Domtar Asia Limited is committed to the market for the long term.
Day-to-day operations are managed by David Liang, vice president of Domtar Asia Limited, and seven other colleagues. Liang says the company’s commitment to the region has paid off.
“Domtar is regarded as one of the most reliable pulp suppliers to the China market. We have a high level of trust with our customers,” he says. “Our experienced staff and market expertise help ease the documentation workload for customers. We also are able to act on real-time market intelligence to supply the right pulp to the right customers at the right time for better financial returns.”
The Quality Advantage
Another area in which Domtar Asia Limited has a clear advantage is in product quality. Some producers sell second-quality pulp into the region or treat the market as flex, but Domtar Asia Limited sells the same quality pulp and fluff pulp that is used for Domtar’s own product manufacturing and is committed to maintaining a solid reputation month after month.
“Our customers have high standards, and they appreciate that we don’t take their requirements for granted,” Fix says.
Currently, Domtar exports about one-third of its market pulp to China. This pulp is produced at our Kamloops, Plymouth, Marlboro and Ashdown mills. In 2017, Domtar Asia Limited sold nearly half a million air dry metric tons of market pulp, a volume that represents significant growth.
The biggest area of growth for Domtar Asia Limited is for fluff pulp, which has been growing at an average rate of 10–15 percent over the past five years. But in 2017, the volume jumped 65 percent to nearly 200,000 air dry metric tons, mainly as a result of the Ashdown Mill’s conversion to fluff pulp production. Our Kamloops Mill also exported 51 percent of its bleached and unbleached paper-grade pulp to China in 2017.
In addition to the work we do in China, Domtar Asia Limited expanded into Southeast Asia in 2016. We currently export more than 100,000 tons of paper-grade and fluff pulp to the region from our Kamloops, Plymouth, Marlboro, and Ashdown mills. This market is managed by Nicole Chan, one of four colleagues who have been with Domtar Asia Limited since it opened; she started in customer service and now serves as regional manager for Southeast Asia.
While the quality of our market and fluff pulp is a key advantage, Domtar Asia Limited also has the privilege of having Jack Hsieh as part of the team. Hsieh, hired in March, is a globally recognized technical expert in the manufacture of hygiene products using fluff pulp. He helps customers increase their manufacturing productivity, efficiency and quality.
“With more than 30 years of rich frontline experience and skills, Jack is a great contributor to our introduction of Ashdown fluff pulp into the market,” says Liang.
Fix agrees, saying, “Our customers trust Jack to make adjustments to their machines because of his experience and reputation in the industry. It’s been great to have him on our team.”
A Strong Outlook in Asia
Domtar Asia Limited is well positioned for growth in the coming years.
“We have reliable, consistent monthly sales, and we’re sitting on the world’s largest and fastest-growing pulp market,” says Liang. “If demand continues to grow like this, we have great potential in this market.”
The office also has a high level of trust among its customers, which makes the future look bright indeed.
“Our customers see David and our office as an extension of the mills,” Fix says. “They can see that we treat the Asian market as strategic, just like any other geography in which we operate. And as this market keeps growing, we’re ready.”
