As recorded in the “Tiangong Kaiwu” (The Exploitation of the Works of Nature), the invention of papermaking during the Han dynasty became an unparalleled milestone in the development of human civilization. From packaging, food containers, recording information to lifestyle cleaning products, paper has become an indispensable part of modern life.
Though the Taiwanese paper industry is not yet 400 years old, it has nonetheless developed a diverse range of paper products through the influence of mechanized production flowing from the European industrial revolution and the modern advancement of automation technology. Founded in 1947, the Taiwan Paper Industry Association (TPIA) has spearheaded the development of the Taiwanese paper industry for more than 70 years.
Upon its relocation to Taiwan, the Nationalist government took over the public companies operated by the Government-General of Taiwan during the Japanese colonial period, with the National Resources Commission handed seven major government-owned enterprises including the Taiwan Paper and Pulp Corporation. Hsieh Hui was appointed the Special Executive Officer of the Office of the Special Commissioner in Taiwan as well as Light Industry Group Leader.
Apart from the larger-scale Taiwan Pulp and Paper Corporation, there was also the Taiwan Province Paper and Printing Company, a smaller paper mill and printing press. After May 1946, the Taiwan Provincial Government dissolved the paper and printing company and separately sold it to the private sector. In fact, in the first decade after the retrocession of Taiwan, many private paper mills failed due to insufficient funds and lack of experience. Rather, it was the small and midsized paper mills that succeeded because of US aid and non-continuous operations. As a result, this created an industry of national-provincial joint ventures and small independent paper mills. In 1947, the paper industry’s annual production was extremely small, failing to even crack 14,000 metric tons. With so many things still waiting to be done after the war, all the industrial equipment needed by the paper industry, such as carpets and copper wire mesh, as well as the distribution of sugar cane pulp, paper cargo tax rates, and conducting export trials, were all coordinated by the TPIA.
By 1957, the paper industry had entered a state of overproduction. The small scale of paper mills and uneven product quality, plus expensive raw materials, high interest rates and export losses also led to destructive price cutting in the domestic market.
After 1958, the government began gradually rolling out measures to boost exports, such as promoting loans and using domestic surpluses for exports, but none achieved obvious results. In 1960, under the guidance of the External Trade Council, the TPIA established the China Paper Trading Company to cooperate on exports while also setting up a foreign exchange joint registration application system, low-interest export loans, low-price raw material acquisitions, and imported raw materials tax refunds. In was not until 1965 that this cooperation ended and paper mills were left to export freely.
During the 1960s, export volumes grew significantly from 44,000 metric tons to 70,000 metric tons. The paper industry continued to expand steadily, with the number of domestic paper mills rising at the same time.
From 1970, the government switched from an economic policy focused on exports to improving the domestic investment environment and help Taiwanese industries take off. This strategy led to a strong demand for all types of industrial paper, including corrugated boxes for bananas and general merchandise, white and gray cardboard for shoes and apparel, and kraft paper bags for cement and fertilizer, opening up a golden era for industrial packaging paper.
The growing need for industrial paper prompted the upstream paper mills and downstream packaging industry to collaborate in driving the standardization of industrial paper as well as research into imported waste paper quality and distribution. The 1973 oil crisis led to a spike in imported pulp prices, inspiring industrial paper plants to make use of waste paper and sparking the Taiwanese paper industry’s first important green transformation.
Rapid increases in production also brought all kinds of challenges for raw materials, the environment, product quality, and sales and marketing. During this period, the TPIA established production and sales improvement committees for various types of paper and a water industry water pollution research committee, strengthened coordination of the waste paper import business, set joint export teams for white cardboard and coated paper/typing paper, and continued to bolster professional industry training.
Taiwan and South Korea are both situated in northeast Asia. Given their the common goal of opposing communism at the time, representatives from their respective paper industries decided in 1976 to strengthen bilateral collaboration under the ROC-ROK economic cooperation framework. The first official cooperation conference was held in Taipei in 1977. The two sides set up permanent organizations to share information on market conditions, with the China Paper Trading Company and the Korea Paper Association being the designated entities in charge of paper export collaboration.
Apart from collaborating with South Korea, Taiwan’s paper industry operators also actively sought overseas contacts to increase export opportunities, including participating in international printing and packaging exhibitions and inviting leaders from the Japanese paper industry to Taiwan for exchange visits.
After 1986, Taiwan’s privately owned paper enterprises began making major advancements. Some grew bigger and bigger, while others engaged in international expansion. The number of paper mills during this 10-year period did not change much, but the number, size, width and speed of papermaking machinery increased significantly, leading to exponential growth in total production. The production of paper and paperboard in 1996 was 333 times that of 1947, reflecting Taiwan’s drastic economic and social changes, population growth, and improving lifestyle in the 50 years following retrocession. Both gross national product and average national income enjoyed double-digit growth.
As production volume increased, quality also reached stable standards. During this decade, the paper industry and the government jointly formulated 105 draft national standards for paper products and 16 draft amendments. Industry participants also reached a consensus on waste paper testing standards in the hopes of standardizing and institutionalizing various manufacturing processes.
This period also laid the foundations for the industry to face new challenges in the coming decade. The government strove to accede to the World Trade Organization (WTO), bringing along with it the impact of unequal international trade terms. The rapid rise of China and the drastic lifestyle changes ushered in by digital technology also foreshadowed the painful transition period the paper industry was about to face in the new millennium.
Taiwan officially acceded to the WTO in 2002. Zero import tariffs resulted in the dumping of low-price paper products into Taiwan, forcing the domestic paper industry to endure the impact of weakening market power and low profits. The 5-7% export tariff, on the other hand, weakened export competition, igniting a bitter war against unfair trade terms both at home and abroad.
The Taiwanese paper industry’s opposition against low-priced paper product imports is well documented. In 1998, the TPIA applied for anti-dumping measures against Japanese and Indonesian coated paper imports and Thai non-coated paper imports. In 2007, it again applied for anti-dumping tariffs and temporary anti-dumping duties against Japanese, Chinese and Indonesia non-coated paper imports, but none achieved satisfactory outcomes. At the time, the government knew very well the impact of free trade on the domestic paper industry, which is why the Ministry of Economic Affairs commissioned the Taiwan Institute of Economic Research to produce the “Paper Trade Investigation Warning Report” in 2001.。
On the other hand, the rise of the Chinese economy had a magnetic effect, attracting Taiwanese industries to the mainland and triggering adjustments to the domestic paper industry’s territorial map. In the face of greater competition, the TPIA actively advised paper mills to update their papermaking equipment, elevate efficiency and quality, reduce costs, improve management practices, develop high value-added products, advance the electronization of the paper industry, establish connections with international businesses, strengthen international competitiveness, and strive for sustainable development.
The business models of paper industry enterprises over the most recent decade has been highly diverse. Apart from making printing and writing paper, industrial paper, and household paper, companies are developing horizontally by transitioning to the production and sale of niche products. Vertically, companies are moving to integrate the upstream and downstream in the production chain by venturing into corrugated boxes, printing and packaging design.
However, the obstacles posed by unfair tariffs resulting from international free trade and competition remain. During this period, the TPIA continued to fight for better trade terms, applying for anti-dumping tariffs and temporary anti-dumping duties in 2012 against Chinese, Japanese, South Korean and Finnish coated paper imports, though the outcomes are yet to be decided. With the Economic Cooperation and Framework Agreement (ECFA) between Taiwan and China stalling and joining regional trade agreements remaining full of uncertainties, some local paper industry enterprises have set up branch organizations or paper mills in China, Hong Kong or Southeast Asia to expand their operations.
Taiwan’s lack of natural resources has prompted greater environmental awareness and led the government to promote policies that revolve around the circular economy concept. Among all of Taiwan’s manufacturing industries, the papermaking industry is the model student when it comes to having the longest history of resource recycling and reuse and sustained technological innovation. Examples include acquiring raw materials from man-made fast-growing tree species and crop stalks, reusing recycled paper, cogeneration, and turning waste into fuel. In firm consensus regarding its green direction, the paper industry will continue to promote correct paper recycling classification and participate in building a horizontal and vertical chain to facilitate the recycling and reuse of waste resources across different industries.