Paper money goes into the red

China's 25 listed pulp and paper manufacturing companies reported a total 15 million yuan ($2.43 million) net loss in the first quarter of 2013, according to Securities Times.

It is the first time the 25 listed companies have reported a net loss in the past four years. The figures from Wind Information Co Ltd show the net income of the 25 companies in the first quarter was 633 million yuan in 2010, 715 million yuan in 2011, 110 million yuan in 2012 and a net loss of 15 million yuan in 2013.

Orient Securities Co Ltd was quoted by Securities Times as saying the profitability of paper manufacturing companies is still low but companies with a strong presence in the pulp manufacturing sector have better profitability.

Meanwhile, industry experts believe lower demand for some traditional products such as artists' paper and newsprint paper also dragged down companies' net profits.

China's 12th Five-Year Plan (2011-2015) for the pulp and paper manufacturing industry revealed that China has become the largest paper manufacturing and consuming country in the world in the past decade. The total demand for paper and cardboard will reach 115 million tons in 2015, an increase of 4.6 percent from 2010. The total output of paper and cardboard will reach 116 million tons in 2015.

Northeast Securities said it is essential for paper manufacturing companies to seek upstream and downstream expansion to achieve better results in the future.