Guangzhou Paper Group Made a Good Start, with Profit for the First Month Since Four Years Ago
Release Date:2012-02-23 08:58:00

At the beginning of 2012, when the macro-economy was in sharp decrease, the machines relocated by Guangzhou Paper Group were under debugging for operation, and the product sales during the Spring Festival was at a low point due to the seasonal influence, all staffs spared no pains and made positive response to such adverse factors. Guangzhou Paper Group won the first battle in January and made a good start for the first year after the relocation for the sake of environmental protection and the full restoration of production, with the book profit of over RMB 100 million and the operating profit of over RMB 6 million; that January was the first month of operating profit since 2008.

Seizing the opportunities of raw material market to purchase quantities of waste paper at a low price .At the end of 2011, European debt crisis was getting worse and worse, and the future economy trend was complicated and confusing, so the price of waste paper substantially fell down abnormally.In the face of the rapidly changing market situation, after collection and demonstration of lots of market information, Guangzhou Paper Group was courageous and resolute to purchase waste paper at one time, the quantity of which was equivalent to the normal purchase quantity of five month in November 2011, so as to lock the price of waste paper low in the future period of time. The opportunity of price fall was transient. In December 2011, the price of waste paper rebounded, and kept higher in January 2012, fully demonstrating that this purchase strategy of Guangzhou Paper Group was correct. Meanwhile, in order to solve the financial problem arising out of purchasing waste paper in large volumes at one time, Guangzhou Paper Group postponed issuing the letter of credit in batches through negotiation with the supplier, and postponed the delivery period to the first half year of 2012, with stable arrival of goods based on the use volume every month, without posing pressure on the warehousing and production. Such waste paper purchased at a low price and delivery in January 2012 effectively lowered the waste paper use-cost by nearly RMB 270/ton, and reduced the cost by more than RMB 10 million.

Increasing the product market influence, and firmly stabilizing the newspaper price.The marketprice of waste paper substantially fell down, causing certain impact on the newspaper price.There were increasingly loud calls forlowering the price, and the pressure of lowering the newspaper price was increasing.On one hand, Guangzhou Paper Group strengthened the communications with the customers to further strengthen the alliance and cooperation under the premise of price stability; on the other hand, Guangzhou Paper Group gave full play its influential role in the industry to jointly soothe the customers with other enterprises in the same industry.In January 2012, the selling price of newspaper was kept stable, with the gross profit ratio 6% higher than expected, with an increase of 18% on a month-over-month basis.

Innovating the business operation mode to decrease the logistics cost.Guangzhou Paper Group introduced large-scale logistics companies for all-round and in-depth integrated logistics service cooperation to fully vitalize the geographic advantages, so as to optimize the logistics system and decrease the logistics cost. Previously, Guangzhou Paper Group innovated the sales logistics mode, and took advantage of resources to change train container transportation to ship transportation to reduce the transportation expenses. This year, Guangzhou Paper Group further integrated the logistics for importing waste paper, with unified distribution and one-package service from customs declaration to short-distance transportation to loading and unloading, so that the logistics cost for importing waste paper in January was decreased by 12% on a month-over-month basis. Guangzhou Paper Group will continue to expand the breadth and depth of logistics integration to continuously reduce the logistics cost in next step

Deeply exploring the potential of consumption reduction and expense control.Guangzhou Paper Group strengthened the cost control and explored cost reduction space to create a refined control system. It extended the2011refined assessment method to increase the attention of each department to cost utilization.In 2012, it set stricter assessment goal for theBSCassessment system, further refining the cost indicators, and established a controllable comprehensive budget management system with early warning in the actual operation.In January, three kinds of expenses were lower than the budgets to some extent.

Since thefinancial crisis,Guangzhou Paper Group suffered from loss for several consecutive years due to the imbalance between supply and demand of main product markets and other factors, but achieved profit in January this year, which was a tremendous inspiration for Guangzhou Paper people.In the face of rapidly changing market situation, Guangzhou Paper Group will continue to overcome difficulties and seek improvement in stability at a new starting point according to the operation management policy of "innovation and potential exploration to reduce losses, joint venture and cooperation to promote transformation", striving to make a good start and a good end in 2012.