Hidden Champion in the Paper Industry
Place a pulp board the size of a ceramic tile into the paper machine, and as the machine rotates, a jumbo roll of tissue paper is produced. These jumbo rolls are easy to transport and can be fed into downstream converting equipment where cutting, folding, and other processes transform them into household tissue products such as facial tissue, toilet rolls, and napkins.
This is exactly where Foshan Nanhai Baotuo Paper Machinery Co., Ltd. (hereinafter “Baotuo Paper Machinery”) comes into play. As an upstream supplier in the household tissue industry, Baotuo specializes in the R&D and manufacturing of high-speed tissue machines. In just 15 years, it has achieved an 8% global market share among leading tissue machine suppliers from 2000 to 2022, ranking fourth worldwide—behind only Valmet, Voith, and Andritz, three international giants each with over 150 years of history. Why did Baotuo boldly venture into the more capital-intensive upstream sector of papermaking? How did it rise to global No.4 and national No.1 in such a short time? The answer lies in import substitution, lowering equipment costs, and persistent technological innovation that opened doors to international markets.
Driving Localization in Just 15 Years, Catching Up with Centuries-old Peers
Baotuo Paper Machinery is a subsidiary of Baosuo Enterprise Group. For 15 years, it has focused exclusively on high-speed tissue machines, winning the trust of major players such as Dongshun Group, Libang Group, Zhongshun Group, Taisheng Group, and Sun Group. According to data published by Fastmarkets RISI, between 2000 and 2022, global tissue machine deliveries reached a combined annual capacity of 37.3 million tonnes. Among key suppliers, Baotuo ranked fourth globally and first in China with an 8.0% market share.
Such an achievement would have been unimaginable 15 years ago. Founded in 2007, Baotuo entered the market at a time when papermaking equipment was polarized: imported machines offered high speed and premium paper quality but came at extremely high prices, while domestic equipment lagged behind in performance. Seeing this opportunity, Baotuo decided to enter the upstream tissue machine sector.
Following nearly two years of research and market study, Baosuo Machinery Manufacturing Co., Ltd. (Baosuo Machinery)—a sister company of Baotuo—and Japan’s Sasaki Engineering jointly established Baotuo to develop and market vacuum former–based tissue machines.
The early years were tough. Long production cycles and high costs prevented scaling, and Baotuo ran at a loss for eight consecutive years. “At that point, even our Japanese partner wanted to give up. But later, we acquired their technology and doubled down on this track,” recalls Baotuo’s General Manager, Li Qibiao.
Since each tissue machine weighs over 100 tons and requires nearly a year from order to delivery, production posed challenges in storage, logistics, and delivery timelines. Baotuo tackled these issues through a combination of technology transfer, independent R&D, and localization. By significantly boosting domestic content, lowering equipment costs, and improving onsite installation guidance, Baotuo greatly enhanced its value proposition.
From 2015 onward, its market share surged. Today, less than 15 years since its founding, Baotuo is close behind the three European giants—Valmet, Voith, and Andritz. Its equipment now achieves 80–90% localization, and compared with imports of the same quality, Baotuo machines cost only one-third to one-half.
Overcoming Technical Barriers and Breaking Into the Upstream
Baosuo Machinery, Baotuo’s sister company, was among the first enterprises recognized as a National Hidden Champion in Manufacturing in 2017. Positioned upstream, Baotuo focuses on manufacturing tissue machines that produce jumbo rolls directly from pulp boards, while Baosuo Machinery converts these rolls into consumer products like facial tissue, toilet rolls, and napkins.
Despite their industrial linkage, the two companies’ production lines are technologically distinct. Entering the upstream sector meant starting from scratch. Baotuo’s products are also significantly different in scale: while Baosuo’s converting equipment ranges from a few million to tens of millions of RMB, Baotuo’s tissue machines start at over RMB 20 million, are heavy-duty, and require foundation work for installation.
Baotuo has also solved major technical challenges. In 2015, it overcame material issues in Yankee dryers, a core component of tissue machines. Traditionally made of cast iron, Yankee dryers faced safety and quality risks due to variations in manufacturing and operating environments. By developing steel Yankee dryers, Baotuo reduced risks, improved heat efficiency, and increased speed and output.
Recognizing that high-speed, high-capacity machines are not always ideal for energy-conscious regions such as Europe, Baotuo established an R&D team in 2017 to localize crescent-former tissue machines, which offer better energy efficiency. By fine-tuning width, design speed, and production capacity, Baotuo addressed multiple technical challenges including energy savings and basis weight control. Today, international sales account for about 20% of its business, with machines exported to Southeast Asia, Eastern Europe, Africa, and beyond.
Expanding R&D Investment and Product Portfolio
Currently, Baotuo delivers around 50 tissue machines annually, a production level described by Li Qibiao as the “ceiling” in the industry. Looking ahead, Baotuo is investing heavily in Through-Air-Drying (TAD) technology, a disruptive papermaking process that yields tissue with double the bulk compared to conventional products, reducing raw material usage by up to 60%.
“TAD technology can significantly improve absorption and strength, with broad application potential,” says Peng Weidong, Vice President of Baosuo Machinery.
With R&D staff accounting for 80% of its workforce and 33 patents to date, Baotuo is committed to innovation. Its main R&D hub within Baosuo Group’s headquarters allows full resource integration to tackle core technologies.
Given that China’s installed tissue machine capacity is approaching 20 million tonnes while consumption is only about 10 million tonnes, the market is oversupplied with conventional models. Baotuo therefore sees growing demand for higher-quality, more energy-efficient machines. Plans include promoting wider 5600mm machines and expanding into premium segments to strengthen competitiveness.
Looking One Step Ahead to Win Bigger Markets
Before venturing into tissue machines, Baosuo Machinery had already established itself in downstream paper converting. Why not continue to deepen in that area? Entering a new segment meant tapping a new market, albeit with higher risks and challenges. Despite eight years of losses, Baotuo persisted and eventually turned the corner—building a strong domestic and international reputation for Chinese-made tissue machines.
Now, beyond expanding its tissue machine portfolio, Baotuo is exploring opportunities to move even further upstream into pulp production, opening up a broader market frontier.
Baotuo’s story demonstrates that in the same industrial chain, taking just one extra step—with resilience, innovation, and persistence—can lead to breakthrough opportunities and global recognition.