Thailand's paper industry:
Rising demand but rising costs also
By Jon Fernquest |
The market for paper in Thailand peaked before the 1997 Asian Crisis.
Demand for paper in Thailand has yet to reach the same level it reached back then.
Thailand's paper consumption at 20 kilogrammes per capita is still very low compared to the 100 kilogramme average of countries such as Singapore and Hong Kong and over 200 kilogrammes in Japan.
That's not to say that merely consuming large amounts of paper is a good thing in itself. It's not like the more paper I consume, the more trees that are cut down, the better the world will be. Recycled paper is another option. (See Wikipedia)
Paper is used to produce books, magazines, and newspapers, but I could use my computer as a reading and writing device instead.
Reading on a computer, however, is still not very convenient and probably won't replace paper for a long time.
Rising energy costs are making paper more expensive, so very soon, reading and writing with our computers may save us a lot of money in paper costs.
An article in today's Bangkok Post business section discusses the paper production operations of Siam Cement Group (SCG).
Here is the article in full:
Pulp maker expands to meet demand
Current Phoenix mill at full capacity
NAREERAT WIRIYAPONG
Thursday June 12, 2008
KHON KAEN - Phoenix Pulp and Paper Plc (PPPC), wholly owned by Siam Cement Group (SCG), is studying an investment of six to eight billion baht to raise pulp capacity by 100,000 tonnes to serve rising demand and cash in on exports.
PPPC, Thailand's top pulp producer, has nearly completed construction of its 7.3-billion-baht paper mill. Production is set to start in early July with output of 100,000 tonnes of printing paper up to the end of this year.
By the beginning of 2009, the plant would step up production to a maximum of 200,000 tonnes per year, said managing director Terasak Chamikorn.
The facility will acquire pulp from the PPPC plant that has operated for more than three decades and is now running at full capacity of 240,000 tonnes a year, said Mr Terasak.
About one-quarter or 50,000 tonnes of PPPC's pulp output is currently exported to more than 30 countries including China, Hong Kong and India.
PPPC's short-fibre pulp made of eucalyptus is now trading at almost $800 per tonne, up from $720 at the beginning of this year. The price is still on an upward trend, said Mr Terasak.
He said that once the paper mill was in operation, it would require all of the current pulp production and the company would not have pulp left for the export. Therefore, PPPC needs to increase pulp production capacity, scheduled to become available in 2010.
"We want to maintain our exports. Currently pulp prices are very good and have kept increasing over the past two years," said Mr Terasak.
The company expects to double its annual revenue to eight billion baht when its paper mill is fully operational next year.
This year, it expects revenue to approach five billion baht, up from four billion last year, thanks for the increase in domestic demand and rising pulp prices.
Around 70% of PPPC's paper capacity is for local demand with the rest for export.
Printing paper prices are currently around $850-900 per tonne, driven up by high oil prices. PPPC itself says its energy cost has risen five-fold due to the sharp increase in oil and coal prices.
PPPC expects domestic demand for printing paper to rise by double digits this year from about 600,000 tonnes in 2007. The market is still only at half of the peak seen before the 1997 financial crisis, said Mr Terasak.
He said Thailand's annual paper consumption of 20 kilogrammes per capita was still very low, compared to more than 100 kg in Singapore and Hong Kong, and more than 200 kg in Japan.
Apart from PPPC, SCG also operates other two pulp factories in Ratchaburi and Kanchanaburi with a combined capacity of 240,000 tonnes per year.
(Source: Bangkok Post, business, 12-06-08, page B12, NAREERAT WIRIYAPONG, temp-link)
Vocabulary:
capacity - the greatest quantity that can be produced with the factory and machines available
at full capacity - the greatest amount possible is being produced
pulp capacity, pulp production capacity - the greatest amount of pulp that can currently be produced by the factory
paper capacity - the greatest amount of paper that can currently be produced by the factory
combined capacity of two factories - the greatest amount that the two factories together can produce
Siam Cement Group (SCG) - the largest cement company in Thailand, listed on the Stock Exchange of Thailand (SET), founded by King Vajiravudh [King Rama VI] in 1913, has expanded into various businesses: petrochemicals, paper and packaging, cement, building products and distribution, company is controlled by the Crown Property Bureau, which has 30% of Siam Cement's shares (See Wikipedia)
pulp, wood pulp - a dry fibrous material prepared by chemically or mechanically separating the fibers which make up wood (See Wikipedia on wood pulp, pulpwood, wood pulp paper, and overview of pulp industry)
short-fibre pulp - the kind of pulp produced from eucalyptus trees: "Eucalyptus pulp, which has short fibres, gives paper good printing characteristics, while Billerud’s long-fibre pulp gives the paper sufficient strength to withstand stresses in the production process and for additional handling by converters and printers" (Source: Billerud Annual Report 2006)
recycled paper - new paper made from old paper (don't have to cut down more trees; See Wikipedia)
a device - a small machine that performs some task
convenient - easy to use, an easy way to do something
cash in on Y - making money from Y (using a situation Y to gain an advantage; See glossary)
a paper mill - a factory for making paper (See Wikipedia on industrial papermaking, Fourdrinier machine, and some FAO info on Thai paper industry from the 1990s)
a facility - (See glossary)
acquire - get or obtain something
eucalyptus - a type of large tree often used to produce paper: "The wood produced by the tree is highly appreciated by the charcoal and pulp and paper industries. The short rotation allows a larger wood production and supply wood for several other activities, helping to preserve the native forests from logging. When well managed the plantations are sustainable and the soil can sustain endless replantations" (See Wikipedia)
operate X - make X work
operate a factory - use a factory to produce goods
operations - the work done in a factory or business
a fully operational factory - a factory that is being used (or is at least ready for use)
rise by double digits - increase by an amount in the range 10% to 99% (two digits in the number)
the peak - the highest level reached
per capita - per person (total amount / total people)
