International Paper's package includes Shanghai headquarters

As one of the many multinational companies with Asia headquarters in Shanghai, International Paper has become a global leader in the paper and packaging industry and supplies a wide range of products that most of us use every day.

International Paper has operations, including pulp and paper mills and converting and packaging plants, in North America, Europe, Latin America, Russia, Asia and North Africa.

"Our company is based in the United States, has a 110-year history and is one of the leading paper and packaging companies in the world with about $23 billion in annual sales," Paul Brown, president of International Paper Asia, said.

International Paper has some 62,000 employees in 20 countries including 9,000 employees and 25 factories in China producing industrial and consumer packaging as well as a joint venture with Shandong Sun Paper producing coated carton board.

Before setting up headquarters in Shanghai, the first step in China taken by the company was to establish an office in Hong Kong in the 1990s.

"When our Asia headquarters was in Hong Kong, we were primarily focused on business development but we moved to Shanghai in 2004 when we started expanding our operations in China," Brown said.

"As a result of globalization, we've expanded our production in countries outside the United States and Europe into faster growing economies such as Brazil, Russia and China. The United States is a very important market for us but we are also a global producer of paper and packaging," Brown said.

"We're in a favorable market position in paper and packaging and we believe Shanghai is a very attractive headquarters location for business in China as well as the rest of Asia," Brown said.

The US-based company has operations across China, ranging from Shenyang in the northeast to Guangzhou in the south to Chengdu in the west. "The vast majority of our products manufactured in China are consumed locally," Brown said.

With over $1 billion in sales last year, the paper and packaging maker is expected to continue its growth in 2010. As China has become a major world economy, "the growth in paper and packaging consumption is very closely connected to overall economic growth," Brown noted.

Facing the fierce market competition in China, it helps to be a multinational corporation with local know-how.

"We act like a local manufacturer, hiring Chinese employees and managers and we have very few foreigners in our business. It gives us the advantage of combining global resources with local management and knowledge," Brown said.

"When they are out in the market competing, they can compete as local people with all the technical, management and marketing resources of a successful multinational corporation," Brown said about his company's Chinese employees.

The demand for paper and packaging dropped dramatically during the financial crisis. International Paper made bold moves by diversifying their sales to those market segments which were less vulnerable in the recession and through aggressive cost control.

"In the middle of 2008, we prepared for the financial crisis by tightening our belts in International Paper operations around the world. We took a number of steps to ensure strong cash flow and minimize costs," Brown said.

As a result, the company had excellent cash flow in 2009 and came out of the financial crisis with a healthy balance sheet. "We've just acquired SCA Asia Packaging and we continue to look for other ways to grow our business in China. I believe China is an excellent market for paper and packaging and the future looks bright for our company and for our employees," Brown said. He is confident about the future prospects of International Paper where he has worked for nearly 30 years.

(China Daily 07/02/2010 page18)