November/December 2005
Nine intrepid ReMA members made history in September by traveling halfway around the world to China to join the association’s first official international trade mission. The eight-day event, which focused on paper, was a grand success—and an experience the mission members will never forget.
By Adam Minter
A group of China’s biggest importers of scrap paper stood at one end of the China Hotel’s ballroom, business cards in hand. At the other end, six Americans stood beside a stage as ReMA President Robin Wiener introduced them as members of ISRI’s paper recycling study mission to China. As soon as Wiener concluded her comments, the Chinese consumers pounced on the ReMA members in search of new sources of America’s number-one export to China by volume: scrap paper.
So began the sixth night of ISRI’s eight-day, three-city trade mission to China, held in mid-September. The delegation of nine, including Wiener, had already visited top government officials in Beijing and major paper mills in Shanghai. The group, then in the southern manufacturing hub of Guangzhou, had also just acquired its third assigned contingent of U.S. consular staff.
Though jet lag was still a factor—and though the boiled hot dogs in the buffet across the ballroom had become oddly tantalizing—the group was reveling in opportunities. Rick Post, an account executive with Louis Padnos Iron & Metal Co. Inc. (Holland, Mich.), handed out his business cards with the cool precision of a Vegas blackjack dealer. In return, he accepted frenzied offers of cards and markets with polite aplomb. “This is what I came for,” he said, displaying the card of one of China’s largest secondary fiber importers. “This one goes into the collection.”
As Post expanded his card collection, Wiener conversed with Robert Murphy, chief of the U.S. Consulate Foreign Commercial Service in Guangzhou. A few feet from her, Linda Leone, fiber procurement manager for Solvay Paperboard L.L.C. (Williamsville, N.Y.), listened as a Guangzhou importer described his fiber needs (even though she’s a consumer, too).
Next to the buffet, loaded plate in hand, Joe Scheck, operations manager for Standard Industries (Ventura, Calif.), discussed container availability with a representative from one of the world’s leading shippers. Other mission participants traded cards, ideas, questions, and answers with a high-level cross-section of representatives from Southern China’s paper industry, related businesses, and regulatory agencies.
That evening captured, in roughly 90 minutes, the essence—and the hustle-bustle—of ISRI’s China visit, which marked the association’s first formal international trade mission.
Getting the Ball Rolling
The mission was busy from the beginning. On the first full day, in Beijing, the group visited China Customs and was briefed on issues related to scrap paper imports and the division of labor between the departments that oversee such imports. This was followed by an equally unprecedented visit to China’s State Environmental Protection Administration (SEPA). “That was an interesting day—even though we were all jet-lagged,” said one mission member, with a weary smile. Indeed, many of the ReMA members had arrived the day before, and most had slept only a few hours due to the time difference.
Yet the government meetings were only the beginning of an ambitious day in Beijing. After SEPA, the group met with the president of the China Technical Association of the Paper Industry, the highest-level academic paper association in China. Then, back at the hotel, the group was feted at a cocktail reception attended by top-level consular staff, Chinese government officials (including some from SEPA and AQSIQ—the General Administration of Quality Supervision, Inspection and Quarantine), and representatives from China’s scrap paper and metal industries. While mission participants visited with secondary-fiber consumers, Wiener and Chinese regulators discussed proposed changes to SEPA’s regulations that have the potential to significantly affect ReMA members as well as concerns over a rumored Oct. 1 AQSIQ deadline. This conversation resulted in a subsequent invitation for Wiener to attend a high-level policy meeting at AQSIQ several days later in Beijing.
And so, at the beginning of its first morning in Guangzhou, the group was without Wiener, who had to return to Beijing to attend the meeting. In her place was Marty Davis, president of Midland Davis Corp. (Moline, Ill.) and a past president of ISRI’s Paper Stock Industries Chapter. After breakfast, the group boarded a van to visit Nine Dragons Paper Industries’ mill in nearby Dongguan. A police car was parked in front of the van. Evidently, the owner of Nine Dragons had arranged for a police escort. “He wanted to make sure that you made it,” explained Diana Liu from the U.S. Consulate’s Foreign Commercial Service, who accompanied the mission with colleague Eileen Bai.
As the police escort led the van through the winding, crowded streets of Guangzhou, Terry Millie, the new Beijing-based representative for RecycleNet Corp., discussed the city’s commercial advantages with Liu and Bai. Up front, Davis and Marty Berkowitz, trading manager for Standard Industries, engaged in a running commentary on the huge amount of infrastructure and housing being built along the highway. “It’s just refreshing to see so much growth,” said Davis. “Where I’m from in Illinois, believe me, you don’t see this.”
Farther along, the van passed several scrap metal yards, causing the attention—and the weight—of the bus to shift to the right side. “Oh, yeah,” said Berkowitz with some satisfaction. After passing through a stunning set of pristine green hills, the van descended into a wide river valley where a distant pier was stacked with thousands of bales of paper. The mission participants were well aware that Nine Dragons, via its U.S. trading arm, America Chung Nam, is China’s leading importer of U.S. goods—not just scrap paper—by volume. “That must be it,” said Joe Scheck, thinking they had arrived at the mill. “Just look at all of that inventory.” That inventory did not belong to Nine Dragons, it turned out. The van drove on, descending a ramp and turning away from the pier into the gritty manufacturing city of Dongguan, continuing past rows of white-tile buildings streaked black with pollution. In the distance, a massive power plant and its towering stack rose from the surrounding fields. Massive buildings extending in every direction imposed on the highway. Construction scaffolding rose from the surrounding empty spaces—then the OCC bales started, extending for hundreds of feet, rising three and four high, covered by tarps.
At the Nine Dragons headquarters building, the group was ushered into a conference room where, fortunately, bottles of water awaited. Ming Chung Liu, whose business card identified him as general manager, swept into the room. His self-description perplexed the mission members because many knew him as the company’s founder and current co-owner with his wife.
Liu explained that Nine Dragons runs eight paper machines in Dongguan, with two more under construction. When complete, the 3.5-square-kilometer mill will have about 2 million mt of annual capacity. The mill’s 352-megawatt coal-fired power plant supplies all its power, with the excess sold to the local utility. Currently, the facility consumes roughly 3.3 million mt of scrap paper a year, though Liu said the company could need 5 million mt in two years. The mill, which employs 6,000 and deploys 320 container trucks, maintains a 60-day inventory of recovered fiber to feed its lines. Liu then opened the floor for questions.
After a brief introduction of ReMA and the mission participants, Marty Davis asked Liu about his impressions of U.S. scrap paper. “On average,” Liu answered, “European, Japanese, and Australian paper are much cleaner than U.S. fiber.” The mission participants frowned and looked at each other around the room. After a brief, good-natured discussion of the issue, Liu offered a tour.
Everyone loaded into a bus, with Liu standing proudly, confidently at the front. As the van toured the plant, he offered additional details on its operations, then led the group into the first of two buildings housing a packaging line. Outside, Dongguan was in the midst of a heat wave, with the temperature exceeding a humid 100 degrees F. Inside the plant, the temperature was even higher. By the end of the packaging-line tour, every mission member was soaked with sweat. “I have a rule,” yelled Rick Post over the roar of the paper machines. “Never visit a mill in August—except in China.” Linda Leone stopped in front of an open window and luxuriated in the 100-degree breeze. Despite the discomforts, the group’s impressions were positive and summed up by Leone: “This is really clean, really impressive,” she said, heading for Liu’s tour van. “This is close to what we expect in the U.S.”
Undeterred by the unseasonable heat, Liu showed the mission crew another sauna-like manufacturing line, then directed the van behind a building where dozens of bales of plastics and metal were stacked. It turned out that those materials—contaminants to Nine Dragons—had been pulled from imported scrap paper bales. “That comes in with the paper shipments,” Liu said to quiet murmurs from the group. Nearby—as if proving his point—workers waded through broken bales, grabbing plastics and other rubbish before it entered the pulper.
On the Waterfront
Two days earlier, in a similar van on the way to a paper mill in Shanghai, RecycleNet’s Terry Millie—a recent transplant to China—contemplated his first four weeks living in Beijing and his reasons for joining the trade mission with his boss, Paul Roszel. “This gives me a good chance to get a sense of the overall markets,” he said. “China’s so big and so much is happening that it’s hard to do it on your own.” Between port and factory visits, Millie and RecycleNet held receptions in Shanghai and Guangzhou for their Chinese customers. And in Shenzhen, the group enjoyed an elegant dim-sum lunch at the Shangri-La Hotel.
That lunch almost didn’t happen due to an incident that added some international intrigue to the ReMA mission. Here’s what happened: Shenzhen is separated from the rest of China by a border checkpoint where Chinese must show identification and foreigners must display passports. The checkpoint, an artifact from the mid-1980s, was set up because Shenzhen was the first of China’s cities allowed to “reform and open” economically. Today, the checkpoint is usually tended in a perfunctory manner. Unfortunately, ISRI’s trade mission arrived on a day when it was being enforced strictly. Worse, several of the mission participants (including this Shanghai-based writer, who should have known better) had not carried passports.
Thus, in the middle of a 100-degree afternoon, at the center of a smog-choked border checkpoint, ISRI’s mission members had to disembark from the bus and await a decision whether they could cross—or whether they would have to turn back. As the consular officials negotiated with the checkpoint staff, the group commiserated. “I say we don’t split up,” said Rick Post. “If someone can’t go, then we all go back to the hotel.” Everyone agreed. Fortunately, after the checkpoint officials learned that the group was a trade mission certified by the U.S. Department of Commerce, they agreed to let the ReMA crew pass.
The van passed the muscular skyscrapers of Shenzhen and became mired in a traffic jam of container trucks. “This is like Long Beach,” said Martin Berkowitz of Standard Industries. “Only it seems to be moving a bit quicker.” The trucks soon exited onto a special truck lane, allowing the van to proceed to the waterfront with little interference. As the ocean came into view, the consulate’s Eileen Bai pointed at several green islands in the distance. “That’s Hong Kong,” she said. Several participants were skeptical. They expected to see the skyscrapers of the legendary city. As Bai explained, however, many of Hong Kong’s outlying islands are still undeveloped.
In contrast, Yantian—the group’s destination—is definitely developed. In the space of 10 years, in fact, it has grown from a fishing village into the world’s fourth-busiest port. This became apparent as the van negotiated the narrow main street through town and the towering walls of shipping containers stacked eight high. “The other great wall of China,” said Marty Davis. “That’s just incredible.”
The van entered the port gate and followed the container walls to the headquarters building, where the group learned about the port’s operations and toured its high-tech command center. For RecycleNet’s Roszel, whose company has thousands of Chinese importers among its online clients, the visit was particularly edifying. “Seeing this many containers and how they coordinate them really makes it come into focus,” he said, shaking his head. “Impressive, impressive.”
Later, the group clustered around an interactive map that displayed the routes of container vessels heading to Yantian. Mission members were invited to call out different shipping routes. As they did, yellow lines representing the routes wound like thin ropes around the globe.
Afterward, port officials showed the crew the sprawling port complex. As the van rolled slowly along the piers, passing endless containers and towering cranes that were unloading vast container vessels, the ReMA members were like enthusiastic art lovers in a museum. “You’d have a hard time believing this is the reality here if you didn’t actually see it,” said Marty Davis as the van passed a long line of quay cranes. According to a port official, those cranes can unload about 35 containers an hour—almost double the average rate at U.S. ports of 18 containers an hour. “This is quite surprising,” said the port official. “We just always assume that things are more efficient in the United States.”
Marty Berkowitz had an explanation, however. “Have you ever heard of the Longshoremen?” he asked. Briefly, the van stopped and port officials allowed the group to wander a small section of the pier to take photos. Almost immediately, a security vehicle arrived to investigate the foreigners wandering the quay. “They don’t miss anything here, do they?” Joe Scheck observed.
A Beginning, Not an End
The next morning, Robin Wiener—who had returned the previous night from her meetings in Beijing—was first on the van. She described her discussions with the Chinese officials. In turn, she was briefed on the 14-hour mission day she had missed, including the port visit, a luxurious and scenic dinner atop the Shangri-La hotel in Shenzhen, Linda Leone’s version of a poem found on a fan given to the group at the Yantian port, and the sing-along that erupted for at least part of the two-hour return trip to the hotel in Guangzhou.
Forty-five minutes later, the van rolled into the Lee & Man Paper Manufacturing Ltd. mill in Dongguan. There was a sense of déjà-vu about the visit because the mill’s vast outdoor scrap paper inventory was the one the group had mistaken for Nine Dragons’ inventory the previous day. Later, as they rode through the facility, several participants looked for bales they had shipped there.
The tour was led by Ross Li, the mill’s executive director and assistant general manager, who warmly welcomed the ReMA group. Later, his welcome was tempered by a frank discussion of problems that Lee & Man had encountered with its imported scrap paper. “The biggest problem is that quality has been declining over the years—particularly from the U.S.A.,” he said during a meeting in the mill’s conference room.
Though this point had been made in other venues during the trip, here it elicited openmouthed surprise from at least one participant and several follow-ups for clarification. Li explained that mixed paper and something called “living garbage”—later explained as household waste—was contaminating OCC shipments. Animal carcasses in OCC shipments were of particular interest to group members who, in turn, shared their experiences with that problem. Thus began a brief bonding session, capped by an account of a horse body that arrived with a trailer of bales. In the end, mission participants thanked Li for discussing his company’s fiber requirements. “It makes a real difference to hear it from the company, in person,” said Rick Post. “This will really help.”
Back at the hotel, the group convened for a series of addresses by local business, shipping, and regulatory representatives. These were the last scheduled events of the trade mission, and initially there was a sense of anticlimax about them. That changed several minutes into a presentation by an AQSIQ representative, whose presentation showed photos of scrap paper shipments contaminated by “residential waste,” “fire ants,” and “toilet waste.” Other addresses offered similar candor, albeit without the graphics. In fact, though it was late afternoon and despite the group’s cumulative exhaustion, these final presentations were some of the most informative of the eight-day trip. “Things are really starting to clear up on some of these customs issues,” said Marty Davis during a coffee and cookie break. “I think we’re really beginning to understand the various aspects of how things are regulated here.”
It was past 5 p.m. when the meetings ended. The remaining participants rushed to shake hands and share business cards with each other, all the while discussing dinner plans and departure schedules. Some would return directly home while others would stop for business elsewhere. Four mission members continued to Hong Kong for some sightseeing. Nobody on the trip said it was their last visit to China.
As a whole, the mission was a beginning best summed up by the last speaker during that last late afternoon in Guangzhou. “We hope that your presence here is a beginning of new cooperation and business between our industries,” said Li Yuan Feng, director of the Guangdong Recycling Association and founder of Huanli Recycling. “Have a good trip home and a speedy return to China.”
Adam Minter is a journalist based in Shanghai, where he writes about business and culture for U.S. and Chinese publications.
Nine intrepid ReMA members made history in September by traveling halfway around the world to China to join the association’s first official international trade mission. The eight-day event, which focused on paper, was a grand success—and an experience the mission members will never forget.