The global economic crisis that began in 2008 affected all areas of industry, including China’s carton producers. However, some statistics show that the paper industry (and paper demand) across China and Asia will experience about 5 - 6% growth from the end of this year to 2010. How can carton producers capitalize on this opportunity? The author suggests a few measures below:

I. All Companies Should Establish a Development Strategy

In light of local management conditions, businesses should anticipate future development, set long-term goals (together with a time frame in which the goal should be reached) and determine a business scope with firm operating guidelines.  This means that companies first need to make a detailed investigation and scientific analysis of market demand, competitors, etc., in order to analyze the advantages and disadvantages and then decide how to expand, specialize or diversify. The strategy, once agreed, should be strictly implemented.

II. Manpower Selection and Employee Retention

The key to successful development is implementing the development strategy once it is decided.  Apart from hardware, the most critical factor in this is talent.

It is imperative that the management have a keen eye for talent. When hiring new staff, especially executives, character, achievement, reputation and work experience must first be examined and then interviews conducted. Prior to being hired, prospective executive staff should be updated on the company’s current situation and long-term prospects. They should also be allowed to observe company operations and have access to information, rather than being hastily hired on the basis of a single interview.

After the roles and duties of new hires are determined, the responsibilities, standards, and evaluation indicators of this position must be defined. Personnel’s responsibilities and rights (particularly financial rights) during employment must be clear. It is up to their superiors to supervise, inspect and guide the use of the given authority. It is up to managers to approve staff salaries and evaluate performance. Such salary and performance evaluation systems can be performed across all levels of management to further the company’s development.

High salaries can be paid to retain top talent.  This should be based on independent evaluation indicators, established goals and profit sharing. It is a proven fact that salary structures not linked to how the company works are inferior to those that are. Ensuring the availability of an able deputy for every position is crucial to maintaining stable development. Companies can only sustain healthy long-term development when they have the correct method of manpower selection and employee retention.

III. Improve Company Management to Promote Development

So far we have looked at company development strategy and talent management, but not corporate culture. At present, to improve competitiveness carton companies rely on management. The functions, responsibilities, standards, processes, indicators and evaluation methods of various positions and departments should be defined, as should the corresponding management system. This applies to both large- and small-scale companies, although not all large-scale companies have complete configuration of sectors and personnel. Although small-scale companies are unlikely to configure their resources, capable personnel can help them do just that. In so doing, companies will have good development with better management and better results can be achieved using the same equipment and product structure. Improving management is a way to up efficiency and its associated benefits.

IV. Low Gram Carton Products

The author participated in Reed Exhibtions’ SinoCorrugated 2009 show in April 2009.   There he noticed that one company from Zhejiang was selling five-layer, 490g/m² cardboard of good weight and high quality.   Companies not capable of producing such cardboard lag behind those that can. Those companies which offer a wide range of options enjoy larger market shares and, consequently, greater profits.

Equipment modification or additional equipment is needed to produce low-weight paperboard. If local companies can produce such products, based on the properties of carton products, competition among manufacturers will thrive - meaning more options for carton end users. Therefore, the production of low weight cartons should depend on the actual situation of the company.

Carton companies go through a variety of development strategies.  These include: production structural adjustment; price systems based on market fluctuations; complete packaging solutions; production and quality improvement; brand building; complete quality management systems; equipment updates and modifications; accelerated cash flow; financial management; company culture building and information construction. Companies must survive, no matter what strategies are adopted, and they can only develop when they are in profit.

At SinoCorrugated 2010, due to be held in April in Dongguan, many industry and technology activities will be held.  These are expected to facilitate in-depth dialog and interaction within the industry.