Mudanjiang Hengfeng: No Paper Tiger

Features

The world’s largest paper manufacturer for the tobacco industry fills Tobacco Asia in on current global trends.

By Thomas Schmid

Paper isn’t just paper as far as the tobacco sector is concerned. In fact, manufacturers require an enormously broad array of often surprisingly innovative, high-quality paper for their products. Whether it’s special types of cigarette paper, inner liners, plug wraps, or package blanks, they have to be developed, designed, and industrially produced. Paper is even making inroads as cigarette filter material lately, offering a much-needed alternative to the dreaded acetate tow.

In China’s far northeastern corner and straddling the country’s border with Russia lies Heilongjiang. The little known province is the home base of Mudanjiang Hengfeng Paper Co., Ltd. Hengfeng, the world’s largest manufacturer of cigarette paper and plug wraps; and second largest in terms of its output of tipping base papers. But, of course, the company isn’t restricting itself to these only, shelling out whatever paper product is needed by tobacco companies, according to Guan Xingjiang, general manager.

As the principal supplier of China Tobacco, 65% of Hengfeng’s annual production volume across all product categories is used domestically, the remaining 35% being exported.

Every market is important

When it comes to exports, Hengfeng has never focused on any particular market region and accords the same level of importance to all of them. “As an enterprise committed to globalization, we strive to meticulously cultivate every market, regardless of sales volumes generated, with some markets generating higher volumes [for us] and others lower ones,” explained Guan, also making it a point that Hengfeng only supplied legally operating manufacturers: “We have no tolerance for counterfeiters.”

Although the firm actively seeks out customers in practically every market, there is one that – at least at this time – remains somewhat … well, elusive for the Chinese company. “The United States of America, without doubt, is the world’s only superpower and maintain leading positions in economy, education, and culture; and it would be a very important market that we are willing to develop.

“But due to trade and investment barriers, most of our efforts [to penetrate the US market] have not been successful. The situation even has become much worse since [the current US administration] was installed,” Guan elaborated, clearly referring to the current trade war waged between the US and China.

Exports increasing thanks to HNB and vaping

Bilateral trade squabbles disregarding, Guan said he had observed a “step by step” contraction of the global tobacco industry on the background of an increasingly hostile anti-smoking environment brought on by progressively stiffer laws and regulations. “Yet our overall export business is increasing thanks to new products that we developed in response to worldwide customer demand.”

While Guan insisted that elaborating on all prevailing trends was “a huge topic” that couldn’t possibly be covered comprehensively in a single article, he agreed to point out some of the more important ones.

For example, the market for heat-not-burn (HNB) and vaping devices continued to boom undeterred, he said, adding that the almost comet-like rise of these two product categories posed “a serious challenge to the conventional cigarette industry.” To help fuel that boom, Hengfeng has created a range of special paper types particularly used in the manufacture of HNB tobacco cartridges. “Even the big traditional cigarette companies have by now all launched their own HNB products, so pushing our r&d for this type of paper is a no-brainer for us.”

Filter papers constantly evolving

HNB and vaping might be increasingly powerful forces to reckon with, but that doesn’t mean by any stretch that trends didn’t emerge in the conventional cigarette arena as well. They do. One case in point would be low-ignition propensity cigarette papers (LIPs), a product range Hengfeng has been offering for some years now.

“There still are new markets that look into LIPs,” asserted Guan, “although I do admit that – globally speaking - the topic of LIP cigarettes is no longer as hot as it was not too long ago.”

On the other hand, he said, slim cigarettes were becoming “more and more popular”, the format – in the past the almost exclusive domain of females - now also attracting male smokers.

Recessed filters likewise are on the upswing owing to their claimed properties of reducing tar and carbon monoxide more effectively than mono filters. For such filter types, Hengfeng has recently created stiff plug wrap paper. “It is our latest product and we developed it to facilitate the rising trend among our customers for manufacturing online-perforated cigarettes and cigarettes with recessed filters,” Guan elaborated, but also conceded: “Although some customers only ask for stiff plug wrap in order to give their products’ filters a visually enhanced, more attractive appearance.”

Staying with the filter topic, MG tipping paper also was trending worldwide, Guan said. This very specialized paper offers better printability and, as Guan called it, “reduced wet deformation”, enabling cigarette brands to lend their sticks that “something extra” by way of creative print patterns applied. Almost needless to say, the inks used are food-grade and non-toxic.

Greta Thunberg would approve

Trends don’t stop at plug wrap and tipping paper, though. As the world descends deeper into environmentalism and Greta Thunberg-inspired “going green” attitudes rule supreme, acetate tow has long been heavily criticized for its decades-long degrading cycle and causing unnecessary litter pollution. Several trillion acetate butts are discarded every year in waterways and oceans or end up in landfills or the countryside, according to a variety of organizations. “Environmentally-friendly products, therefore, are a powerful trend particularly in developed nations,” Guan correctly observed.

While several companies around the world have been working hard on bringing interesting new filter materials to the market that might fit the “environmentally-friendly bill”, Hengfeng has added semi-crêpe paper to its portfolio. Unbleached, the paper product can be manufactured into filter plugs and is claimed by Guan to “degrade considerably faster than acetate tow”, by that virtue alone already giving it a merit point on the “green scale”.

Circumventing the plain packaging menace

Plain packaging laws in an increasing number of countries may have put a bit of a lid on what can be done with outer packaging and what is prohibited, but a cigarette pack doesn’t consist of the outer blank alone. There also is the inner liner.

Guan has identified certain trends here, too. Faced with a branding ban on outer packaging, cigarette companies are doing the next best thing and have begun to simply put their branding on the invisible component of a cigarette pack, the inner liner. “We’ve had more and more brand owners approach us with requests for printed inner liners and it is my hunch that under the prevailing circumstances, printed, laminated, and coated inner liners eventually are going to replace the conventional ones to a large proportion,” Guan explained. To heed those customer requests, Hengfeng has developed a range of non-metal coated inner liner products that, according to Guan, “essentially retain the same function as conventional metal foil-laminated ones, yet can be considered as being better for the environment, especially when the base paper used is unbleached.”

Always keeping abreast of trends that catch on in the industry, Guan asserted that Mudanjiang Hengfeng Paper carried “the most complete paper product portfolio for the global cigarette industry, providing a one-stop solution to customers with a tremendously broad variety of cigarette papers, plug wraps, tipping bases, inner liner base papers, semi-crêpe paper, inner wrap papers, printed inner liners, and HNB papers.” What more is there to say?

Unaffected by coronavirus

As coronavirus took an ugly toll on China’s economy, including widespread facility shutdowns, supply line disruptions, and bottlenecks, and sharply declining exports, Mudanjiang Hengfeng Paper claimed in a communication with Tobacco Asia that it had not been affected at all.

The company insisted that even during the height of the crisis its factories had escaped a shutdown and remained fully operational. ”None of our workers was or is infected,” the company said.

There also have not been any raw material shortages [Hengfeng] that would have necessitated slowing down or halting production. There has been, however, a certain slump in domestic sales in January and February owing to state-owned China Tobacco having briefly suspended production due to the virus outbreak. “But we expect to catch up on these two months’ sales losses from March onwards as China Tobacco has now resumed production at all its facilities,” the company stated.

Meanwhile, Hengfeng continues to maintain a strict screening and protection regimen for its staff. “Every worker must wear a face mask at the workplace and at all times,” the company asserted. “Employees also undergo daily temperature scanning before entering the premises and the results are reported to management.” As further measures, factory floors and offices are sterilized daily and outside visitors are screened before being granted access.