SCG PAPER OPENS NEW PAPER PRODUCTION LINE LOCAL AND OVERSEAS PRINT AND WRITING PAPER MARKET TARGETED Innovative production technology helps minimize resource consumption and environmental impact
SCG Paper celebrates the official opening of its latest state-of-the-art and environmental friendly Bt7.3 billion production line for its premium print and copy paper at Khon Kaen plant. With 200,000 tonnes per annum production capacity, the new production line will enable SCG Paper to better meet significantly increasing local and overseas market demand for the premium printing and writing paper and gain stronger ground in the regional market.
This new paper production line is located at Phoenix Pulp and Paper Plant in Khon Kaen province. It produces uncoated printing and writing paper, including pound and offset paper for high quality printing (Offset PRO) and premium quality paper for copying machine. The product has superior whiteness, opacity, smoothness and stiffness.
Mr. Kan Trakulhoon, President and CEO, Siam Cement Group (SCG), said after chairing the official opening of the new production line, “SCG strongly commits to operating sustainable business and environment protection. We seriously introduce environmental management measures in our entire production process and services, natural resource rehabilitation, environmentally friendly product and service research and development, and public activities to promote cooperation in environment preservation. All these form the core of our corporate social responsibility practice. And, all these can be achieved successfully only when everyone works closely together like what we see today.”
Mr. Chaovalit Ekabut, President of SCG Paper, said, “The uncoated printing and writing paper market, especially offset paper and paper for copying machine, has been growing dramatically at 6-8% per annum during the past couple of years. Despite weak demand for premium printing and writing paper at present due to economic recession, we expect the market demand to resume and grow in the future.”
SCG Paper won approval from the board of directors and shareholders in 2006 to make Bt7.3 billion investment in this printing and writing paper production project. With 200,000 tonnes per annum production capacity, the facility mainly produces premium printing and writing paper for domestic market and some will be exported to the region. The construction started in 2007 followed by machine installation and test-run in 2008. The official opening of the production line commences in April 2009.
The project won promotional privileges, including tax exemption on imported machineries and other tax incentives, from the Board of Investment (BOI).
The latest global technology for producing uncoated printing and writing paper has been deployed at the facility in order to produce high quality products in terms of opacity, smoothness, whiteness and stiffness.
In addition, the latest technology and production process significantly save a lot of natural resources used, reduce water consumption in the entire production process by 30-50%, and significantly reduce energy consumption. This mill integrates pulp production and paper production processes together, resulting in signification reduction in energy consumed in paper drying and raw material transportation.
The plant also use recycle waste to produce alternative energy for the production process. For example, biomass from pulp production and sewage treatment system is used for producing energy to replace coals. Such biomass is for example, bark, dust and sediment from sewage treatment system. This is not only a way to maximize the use of natural resources but also an elimination of landfill according to SCG’s Zero Landfill policy.
Thursday, November 19, 2009
Thursday, November 12, 2009
SCG Paper promotes premium product
SCG Paper is heavily marketing its Idea Work premium-grade paper in a bid to double its paper sales to Bt1 billion next year, from Bt500 million expected this year.
"The challenge is to persuade users to shift from standard to premium paper. That's why we have to conduct roadshows in offices, to offer paper samples for testing before making the decision to use it," business manager Danaidej Ketsuwan said yesterday.
The company is rolling out aggressive marketing activities for premium-grade paper aimed at corporate and end-users, backed by b Bt100-million promotional budget.
SCG Paper made paper products for industry before entering the enterprise and individual end-user markets last year with th launch of its Idea brand.
At that time, the company introduced Idea Green paper and received good feedback from state agencies, corporations and students.
The government has a policy of procuring green products, which boosted sales of the company's green paper, as well.
SCG Paper this year brought out an innovative paper, product called Idea Work, to tap customers requiring high-quality paper for work. Idea Work paper is priced higher than standard and green paper, by Bt2 to Bt110 a pack.
Despite being more costly, consumers needing high-quality paper for activities like presentations and printing will like it.
Total paper consumption this year is expected to climb 6 per cent to 200,000 tonnes.
One positive factor driving paper consumption is cheaper prices for printers.
The company targets its two paper products to grab 15-20 per cent of the market next year.
Premium paper accounts for 30-40 per cent of the Bt6-billion paper market.
"The challenge is to persuade users to shift from standard to premium paper. That's why we have to conduct roadshows in offices, to offer paper samples for testing before making the decision to use it," business manager Danaidej Ketsuwan said yesterday.
The company is rolling out aggressive marketing activities for premium-grade paper aimed at corporate and end-users, backed by b Bt100-million promotional budget.
SCG Paper made paper products for industry before entering the enterprise and individual end-user markets last year with th launch of its Idea brand.
At that time, the company introduced Idea Green paper and received good feedback from state agencies, corporations and students.
The government has a policy of procuring green products, which boosted sales of the company's green paper, as well.
SCG Paper this year brought out an innovative paper, product called Idea Work, to tap customers requiring high-quality paper for work. Idea Work paper is priced higher than standard and green paper, by Bt2 to Bt110 a pack.
Despite being more costly, consumers needing high-quality paper for activities like presentations and printing will like it.
Total paper consumption this year is expected to climb 6 per cent to 200,000 tonnes.
One positive factor driving paper consumption is cheaper prices for printers.
The company targets its two paper products to grab 15-20 per cent of the market next year.
Premium paper accounts for 30-40 per cent of the Bt6-billion paper market.
Wednesday, November 4, 2009
SCG sees flat sales until US revives
SCG Paper, The country's largest paper manufacturer,expects no sales growth from last year as the US economy has not recovered enough to drive global demand.
SCG Paper has sourced scrap paper from the United States where declining purchasing power has lowered the price by around 30% this year, said president Chaovalit Ekabut.
"The US has yet to see an economic recovery. In large cities people are still buying, but not in the towns where there aren't a lot of people," he said.
However, the price of scrap paper has seen a small increase since the end of the third quarter. Paper scrap is currently traded at $160 to $170 per tonne,compared with the record high of $250 in June last year.
Paper scrap, which is used in paper production, may be more expensive if oil prices rise further. The price of shortfibre pulp has also risen from a range of $520-530 to $560, pushing the prices of printing and writing paper up marginally.
Meanwhile, China is expected to increase its paper production by another 2 million tonnes next year and that will drive the demand and prices of raw material to rise further.
"However, we are not planning to stock more raw material because we are studying the possibility of using alternative materials that are easy to buy locally, such as weeds," said Mr Chaovalit.
In Thailand, demand for packaging paper and printing paper has rebounded since the third quarter and the market has already returned to the same levels as last year. The price of packaging paper is on the rise and should be stable at around $150-160 a tonne at the end of this quarter, he added.
In the third quarter of this year, SCG Paper's sales totalled 11.23 billion baht,up 6% from the second quarter but still down 9% compared to the same period of 2008 due to lower product prices. Net profit was 701 million baht, up 10% on a quarterly basis and 13% year-on-year.
Mr Chaovalit said packaging paper sales fell 7% in the first nine months while printing paper declined by 11%.However, third-quarter sales of packaging paper grew by 3% compared to last year.
Positive annualised growth is foreseen in the fourth quarter, driving the paper market in Thailand to the same level as last year."Growth of zero would still be fine," Mr Chaovalit said.
SCG Paper's 5-billion-baht paper plant in Vietnam, which has been operating since the second quarter, will raise its production in November and December.He projects it will contribute around 2.5 billion baht to the sales next year.
Shares of Siam Cement (SCC) closed on Friday on the Stock Exchange of Thailand at 204 baht, unchanged, in trade worth 423 million baht.
SCG Paper has sourced scrap paper from the United States where declining purchasing power has lowered the price by around 30% this year, said president Chaovalit Ekabut.
"The US has yet to see an economic recovery. In large cities people are still buying, but not in the towns where there aren't a lot of people," he said.
However, the price of scrap paper has seen a small increase since the end of the third quarter. Paper scrap is currently traded at $160 to $170 per tonne,compared with the record high of $250 in June last year.
Paper scrap, which is used in paper production, may be more expensive if oil prices rise further. The price of shortfibre pulp has also risen from a range of $520-530 to $560, pushing the prices of printing and writing paper up marginally.
Meanwhile, China is expected to increase its paper production by another 2 million tonnes next year and that will drive the demand and prices of raw material to rise further.
"However, we are not planning to stock more raw material because we are studying the possibility of using alternative materials that are easy to buy locally, such as weeds," said Mr Chaovalit.
In Thailand, demand for packaging paper and printing paper has rebounded since the third quarter and the market has already returned to the same levels as last year. The price of packaging paper is on the rise and should be stable at around $150-160 a tonne at the end of this quarter, he added.
In the third quarter of this year, SCG Paper's sales totalled 11.23 billion baht,up 6% from the second quarter but still down 9% compared to the same period of 2008 due to lower product prices. Net profit was 701 million baht, up 10% on a quarterly basis and 13% year-on-year.
Mr Chaovalit said packaging paper sales fell 7% in the first nine months while printing paper declined by 11%.However, third-quarter sales of packaging paper grew by 3% compared to last year.
Positive annualised growth is foreseen in the fourth quarter, driving the paper market in Thailand to the same level as last year."Growth of zero would still be fine," Mr Chaovalit said.
SCG Paper's 5-billion-baht paper plant in Vietnam, which has been operating since the second quarter, will raise its production in November and December.He projects it will contribute around 2.5 billion baht to the sales next year.
Shares of Siam Cement (SCC) closed on Friday on the Stock Exchange of Thailand at 204 baht, unchanged, in trade worth 423 million baht.
SCG PAPER TURNS TO ALTERNATIVE PULP MATERIALS
SCG Paper is resorting to other materials for paper pulp-making, to ease the expected increase in global waste paper prices due to higher demand from China.
President Chaovalit Ekabut said that the other materials for pulp-making, would offer the same quality as waste paper. Importantly, the production cost should be lower than when using waste paper to be imported from the United States.
The paper unit of the Siam Cement Group expects the global demand for waste paper next year to increase due to the business resumption of paper manufacturers in China.
Chaovalit said several Chinese paper manufacturers have resumed their operations after suspensions during the economic crisis. Those companies will have to order waste paper from the US, which is the largest supplier.
The move of Chinese paper-makers might affect other paper manufacturers including SCG Paper because the company is one of those that purchases scrap paper from the US to be made into new paper products.
Chinese paper manufacturers are expected to order a lot of scrap paper. They are expected to produce 2 million tonnes next year.
Chavalit said the company has to reduce risk from the expected shortage of scrap paper by considering using another material that is not made from scrap paper, such as weeds.
Other material prices should be lower than scrap paper, he said.
He said that the resumption of Chinese paper manufacturing has driven scrap paper prices up from the current level of between US$160 (Bt5,350) and $170 per tonne.
However, the scrap paper price is not expected to increase to $250 like in 2008, because of the low paper consumption of the US. The low consumption in the US is in line with the country's economic crisis. The consumption of paper this year dropped by 30 per cent.
In addition, the company believes the economic situation has bottomed out because sales revenue and net profit in the third quarter improved from the second quarter, he said.
SCG paper earned sales revenue of Bt11.23 billion, up 6 per cent from the second quarter while net |profit increased by 10 per cent to Bt701 million from the last quarter and increased 13 per cent year on year.
Chavalit noted that the pick up of sales revenue in the third quarter might help the total sales revenue this year meet flat growth or drop a little from last year's Bt47 billion. The company earlier predicted a plunge in sales in 2009 due to the crisis.
He said that the company outlook next year should be brighter because it will realise full revenue from a new paper craft plant in Vietnam. The company expected the plant in Vietnam would contribute Bt2.5 billion in sales revenue next year.
Chavalit added that besides the new plant in Vietnam, the company is ready for new investment. One of SCG Paper's investments is the merger and acquisition of paper plants in Thailand and overseas.
He could not reveal the investment budget for M&A, but said the M&As should be seen soon.
President Chaovalit Ekabut said that the other materials for pulp-making, would offer the same quality as waste paper. Importantly, the production cost should be lower than when using waste paper to be imported from the United States.
The paper unit of the Siam Cement Group expects the global demand for waste paper next year to increase due to the business resumption of paper manufacturers in China.
Chaovalit said several Chinese paper manufacturers have resumed their operations after suspensions during the economic crisis. Those companies will have to order waste paper from the US, which is the largest supplier.
The move of Chinese paper-makers might affect other paper manufacturers including SCG Paper because the company is one of those that purchases scrap paper from the US to be made into new paper products.
Chinese paper manufacturers are expected to order a lot of scrap paper. They are expected to produce 2 million tonnes next year.
Chavalit said the company has to reduce risk from the expected shortage of scrap paper by considering using another material that is not made from scrap paper, such as weeds.
Other material prices should be lower than scrap paper, he said.
He said that the resumption of Chinese paper manufacturing has driven scrap paper prices up from the current level of between US$160 (Bt5,350) and $170 per tonne.
However, the scrap paper price is not expected to increase to $250 like in 2008, because of the low paper consumption of the US. The low consumption in the US is in line with the country's economic crisis. The consumption of paper this year dropped by 30 per cent.
In addition, the company believes the economic situation has bottomed out because sales revenue and net profit in the third quarter improved from the second quarter, he said.
SCG paper earned sales revenue of Bt11.23 billion, up 6 per cent from the second quarter while net |profit increased by 10 per cent to Bt701 million from the last quarter and increased 13 per cent year on year.
Chavalit noted that the pick up of sales revenue in the third quarter might help the total sales revenue this year meet flat growth or drop a little from last year's Bt47 billion. The company earlier predicted a plunge in sales in 2009 due to the crisis.
He said that the company outlook next year should be brighter because it will realise full revenue from a new paper craft plant in Vietnam. The company expected the plant in Vietnam would contribute Bt2.5 billion in sales revenue next year.
Chavalit added that besides the new plant in Vietnam, the company is ready for new investment. One of SCG Paper's investments is the merger and acquisition of paper plants in Thailand and overseas.
He could not reveal the investment budget for M&A, but said the M&As should be seen soon.
Wednesday, October 28, 2009
Producers want more M&A deals
The paper industry needed more consolidation, the heads of Nordic papermakers UPM-Kymmene and M-real said yesterday, adding that they were ready to support a transformation of the sector.
The global paper industry has struggled for close to a decade to climb out of a slump caused by overcapacity, soft demand, low prices and weak earnings,heightening the need to consolidate.
But merger deals have been scarce throughout that period, and analysts said financing, valuation and competition issues would likely continue to constrain players' options.
UPM-Kymmene's chief executive Jussi Pesonen said his firm aimed to be an active player in the consolidation of an industry struggling to slash costs and close excess capacity.
"Definitely this industry needs to consolidate. Our role will be (that) of an active player," Pesonen, head of the world's third-largest firm in the sector by capacity, said at Reuters Paper and Packaging Summit.
"There will be swaps or share deals.We most probably won't see any cash deals in this industry for the next year or two," Pesonen told the summit at Reuters News bureau in Helsinki.
"We will participate only in those kinds of opportunities that create value for our shareholders and the company."
The current global downturn has further knocked demand for paper, as print advertising has dived.
"In the short term (the focus is on)restructuring, cost savings and balancing demand-supply," Pesonen said."This is a cost game. The lowest cost producer will always be better positioned."
Finnish packaging and paper producer M-real, whose sale last year of its graphic papers business to South Africa's Sappi for 750 million was the biggest deal in years in the sector, said it also aimed to support further consolidation.
"Our goal is to support consolidation of the European paper industry," M-real's chief executive Mikko Helander said at the summit.
"No one can be satisfied with the European paper industry's financial performance. Part of the difficulty is the industrial structure."
Helander said M-real was working hard on a strategic review that is seeking new solutions for its remaining uncoated fine paper and specialty paper units.
He said that such deals could be divestments, mergers, joint ventures or other unspecified options.
Helander said that M-real had taken big strides towards the structure that it wanted, with a heightened focus on packaging."We are moving in the right direction - the impact of paper has been reduced, the impact of packaging has increased."
Packaging now accounts for about 40% of revenues.
He said that in the future M-real would retain some papermaking but he said it remained to be seen how much paper production it would keep.
Moody's analyst Christian Hendker said sector consolidation was possible,but constrained by a lack of debt financing available, difficulties in valuing assets in a falling market, and potential competition issues.
The global paper industry has struggled for close to a decade to climb out of a slump caused by overcapacity, soft demand, low prices and weak earnings,heightening the need to consolidate.
But merger deals have been scarce throughout that period, and analysts said financing, valuation and competition issues would likely continue to constrain players' options.
UPM-Kymmene's chief executive Jussi Pesonen said his firm aimed to be an active player in the consolidation of an industry struggling to slash costs and close excess capacity.
"Definitely this industry needs to consolidate. Our role will be (that) of an active player," Pesonen, head of the world's third-largest firm in the sector by capacity, said at Reuters Paper and Packaging Summit.
"There will be swaps or share deals.We most probably won't see any cash deals in this industry for the next year or two," Pesonen told the summit at Reuters News bureau in Helsinki.
"We will participate only in those kinds of opportunities that create value for our shareholders and the company."
The current global downturn has further knocked demand for paper, as print advertising has dived.
"In the short term (the focus is on)restructuring, cost savings and balancing demand-supply," Pesonen said."This is a cost game. The lowest cost producer will always be better positioned."
Finnish packaging and paper producer M-real, whose sale last year of its graphic papers business to South Africa's Sappi for 750 million was the biggest deal in years in the sector, said it also aimed to support further consolidation.
"Our goal is to support consolidation of the European paper industry," M-real's chief executive Mikko Helander said at the summit.
"No one can be satisfied with the European paper industry's financial performance. Part of the difficulty is the industrial structure."
Helander said M-real was working hard on a strategic review that is seeking new solutions for its remaining uncoated fine paper and specialty paper units.
He said that such deals could be divestments, mergers, joint ventures or other unspecified options.
Helander said that M-real had taken big strides towards the structure that it wanted, with a heightened focus on packaging."We are moving in the right direction - the impact of paper has been reduced, the impact of packaging has increased."
Packaging now accounts for about 40% of revenues.
He said that in the future M-real would retain some papermaking but he said it remained to be seen how much paper production it would keep.
Moody's analyst Christian Hendker said sector consolidation was possible,but constrained by a lack of debt financing available, difficulties in valuing assets in a falling market, and potential competition issues.
Monday, September 28, 2009
Foreign orders add weight to recovery
Prospects have improved for the local paper industry due to a revival in overseas demand and prices, says Siam Cement Group.
Thailand's top industrial conglomerate said the demand for paper fell by almost 20% in the first half when compared with the same period in 2008 due to the sluggish economy. But the figure has improved in the second half due to larger exports, Chaovalit Ekabut, the president of SCG Paper, said yesterday.
Orders rose in the second quarter over the first three months while third quarter orders remain steady."The overall consumption of paper this year will be lower from last year but it should not be a double-digit decline," he said.
Paper prices, which fell 15% to 20%in the first half year-on-year, have started rising. The prices are now lower than last year's peak by 10% to 15%, Mr Chaovalit added.
The company is focusing on high value-added products to increase their contribution to its overall portfolio to 25% in 2010, up from 20% this year, to enjoy higher profit margins.
SCG Paper, Thailand's largest paper manufacturer, yesterday launched a coffee-cup sleeve produced from recycled paper that comes with a "Thermozense"heat indicator which will be available at True Coffee cafes.
Mr Chaovalit said the new product has been developed under SCG's principle of "green inspiration", which promotes environmental responsibility among consumers. An initial run of 100,000 heat indicators has been produced. The colour of the sticker changes from red to white as the coffee cools.
"True is aiming for technology that enables us to have a better experience in our daily lives and SCG has helped us by creating the innovation that we have been searching for for a long time," said Papon Ratanachaikanont, assistant to the president of True Corp.
"In the past, we depended on foreignmade products by using coffee sleeves imported from China. Now that there are new sleeves from SCG, it will lower our cost by 30%," he said.
Shares of Siam Cement (SCC) closed yesterday on the Stock Exchange of Thailand at 224 baht, down 5 baht, in trade worth 356 million baht.
Thailand's top industrial conglomerate said the demand for paper fell by almost 20% in the first half when compared with the same period in 2008 due to the sluggish economy. But the figure has improved in the second half due to larger exports, Chaovalit Ekabut, the president of SCG Paper, said yesterday.
Orders rose in the second quarter over the first three months while third quarter orders remain steady."The overall consumption of paper this year will be lower from last year but it should not be a double-digit decline," he said.
Paper prices, which fell 15% to 20%in the first half year-on-year, have started rising. The prices are now lower than last year's peak by 10% to 15%, Mr Chaovalit added.
The company is focusing on high value-added products to increase their contribution to its overall portfolio to 25% in 2010, up from 20% this year, to enjoy higher profit margins.
SCG Paper, Thailand's largest paper manufacturer, yesterday launched a coffee-cup sleeve produced from recycled paper that comes with a "Thermozense"heat indicator which will be available at True Coffee cafes.
Mr Chaovalit said the new product has been developed under SCG's principle of "green inspiration", which promotes environmental responsibility among consumers. An initial run of 100,000 heat indicators has been produced. The colour of the sticker changes from red to white as the coffee cools.
"True is aiming for technology that enables us to have a better experience in our daily lives and SCG has helped us by creating the innovation that we have been searching for for a long time," said Papon Ratanachaikanont, assistant to the president of True Corp.
"In the past, we depended on foreignmade products by using coffee sleeves imported from China. Now that there are new sleeves from SCG, it will lower our cost by 30%," he said.
Shares of Siam Cement (SCC) closed yesterday on the Stock Exchange of Thailand at 224 baht, down 5 baht, in trade worth 356 million baht.
TREND RISKS REDUCED BY HIGH VALUE-ADDED
SCG Paper, a business unit of the Siam Cement Group, plans to boost its proportion of revenue from high value-added paper to 25 per cent by next year.
The move will be aimed at diver-sifying risks arising from general paper consumption, which usually follows economic trends.
President Chaovalit Ekabut yesterday said sales revenue form high value-added paper had showed a slight year-on-year increase so far, while revenue from other products had fallen, due to the economic slowdown.
The proportion of company revenue generated by high value-added paper is about 20 per cent this year, and that is set to increase.
SCG Paper generated revenue fo Bt47.11 bilion last year.
"Paper consumption, both domestically and in export markets, is in line with the world economic situation. If we focus more on innovative products, we have a greater chance of expanding our client base and our markets. At present, SCG Paper manufactures high valueadded products made from paper for several clients," he said.
Chaovlit said total paper consumption in the first half of the year fell 20 per cent year on year in volume, while paper prices fell 15-20 percent. SCG Paper's first-half sales volume declined at a double-kigit rate from a year earlier, but its figures are still better than those of the overall market.
paper-consumption trends and paper prices have been improving in the second half, thanks to the econow 10-15 per ecnt lower than at this time last year.
If Thailand's exports recover in the fourth quarter and early next year, then demand for paper should also improve, he said.
SCG Paper recently began manufacturing coffee sleeves made from recycled paper. The sleeves come with ThermoXense, a heat-indicator sticker that is produced exclusively for True Coffee. If the beverage in the sleeve is hot, the heat indicatkor turns from a red colour to white. SCG Paper has produced 100,000 ThermoZense sleeves for True Coffee and may produce more in the future.
Papon Ratanachaikanont, assistant to True Corp's president, said True Coffee had cancelled the importation of coffee sleeves from China and switched to ordering them from SCG Paper, a Thai manufacturer.
He said True Coffee would raise its full-year revenue target after achieving its earlier target of Bt140 million in only the first half.
The move will be aimed at diver-sifying risks arising from general paper consumption, which usually follows economic trends.
President Chaovalit Ekabut yesterday said sales revenue form high value-added paper had showed a slight year-on-year increase so far, while revenue from other products had fallen, due to the economic slowdown.
The proportion of company revenue generated by high value-added paper is about 20 per cent this year, and that is set to increase.
SCG Paper generated revenue fo Bt47.11 bilion last year.
"Paper consumption, both domestically and in export markets, is in line with the world economic situation. If we focus more on innovative products, we have a greater chance of expanding our client base and our markets. At present, SCG Paper manufactures high valueadded products made from paper for several clients," he said.
Chaovlit said total paper consumption in the first half of the year fell 20 per cent year on year in volume, while paper prices fell 15-20 percent. SCG Paper's first-half sales volume declined at a double-kigit rate from a year earlier, but its figures are still better than those of the overall market.
paper-consumption trends and paper prices have been improving in the second half, thanks to the econow 10-15 per ecnt lower than at this time last year.
If Thailand's exports recover in the fourth quarter and early next year, then demand for paper should also improve, he said.
SCG Paper recently began manufacturing coffee sleeves made from recycled paper. The sleeves come with ThermoXense, a heat-indicator sticker that is produced exclusively for True Coffee. If the beverage in the sleeve is hot, the heat indicatkor turns from a red colour to white. SCG Paper has produced 100,000 ThermoZense sleeves for True Coffee and may produce more in the future.
Papon Ratanachaikanont, assistant to True Corp's president, said True Coffee had cancelled the importation of coffee sleeves from China and switched to ordering them from SCG Paper, a Thai manufacturer.
He said True Coffee would raise its full-year revenue target after achieving its earlier target of Bt140 million in only the first half.
Thursday, September 24, 2009
ASEAN EXPORT ORDERS A BOON TO PRINTERS
The printing industry expects its exports to rise by up to 15 per cent this year mainly on advance orders from the Asean market.
Kriengkrai Thiennukul, chairman of the Printing and Paper Packaging Industry Club of the Federation of Thai Industries, said yesterday that the main factor encouraging the industry for next year is orders from Asean, which accounts for 60 per cent of total printing exports. Overseas importers have placed orders for three to six months in advance.
However, total printing sales this year were expected to be flat at US$1.45 billion or about Bt50 billion, he said.
If markets abroad could improve next year, exports are estimated to reach Bt55 billion-Bt60 billion. The industry shifted its focus to Asean a few years ago as it saw stronger performance in this region than in the US and Europe.
Printing exports in the first eight months of this year dropped by 9 per cent from the same period last year, but the export performances of other Southeast Asian countries were worse, declining 10-20 per cent.
The Printing and Paper Packaging Industry Club formerly targeted the country to be the printing hub of Asia.
Pornchai Rattanachaikanont, president of the Thai Printing Association, said manufacturers this year could export more kraft paper to Japan, and cardboard paper to India and Saudi Arabia.
The industry has also gained a positive outlook for this quarter, as there are promising orders for Christmas and New Year from both local and overseas markets.
Thailand is now hosting Pack Print International 2009 and the Thai Inter-national Plastic and Rubber Exhibition, which open today and continue to Saturday at the Bangkok International Trade and Exhibition Centre. Some 400 printing, packaging, plastic and rubber manufacturers from 20 countries are joining the exhibition.
Messe Dusseldorf Asia, the organiser, expects the event to attract about 20,000 visitors over its four-day run.
Kriengkrai Thiennukul, chairman of the Printing and Paper Packaging Industry Club of the Federation of Thai Industries, said yesterday that the main factor encouraging the industry for next year is orders from Asean, which accounts for 60 per cent of total printing exports. Overseas importers have placed orders for three to six months in advance.
However, total printing sales this year were expected to be flat at US$1.45 billion or about Bt50 billion, he said.
If markets abroad could improve next year, exports are estimated to reach Bt55 billion-Bt60 billion. The industry shifted its focus to Asean a few years ago as it saw stronger performance in this region than in the US and Europe.
Printing exports in the first eight months of this year dropped by 9 per cent from the same period last year, but the export performances of other Southeast Asian countries were worse, declining 10-20 per cent.
The Printing and Paper Packaging Industry Club formerly targeted the country to be the printing hub of Asia.
Pornchai Rattanachaikanont, president of the Thai Printing Association, said manufacturers this year could export more kraft paper to Japan, and cardboard paper to India and Saudi Arabia.
The industry has also gained a positive outlook for this quarter, as there are promising orders for Christmas and New Year from both local and overseas markets.
Thailand is now hosting Pack Print International 2009 and the Thai Inter-national Plastic and Rubber Exhibition, which open today and continue to Saturday at the Bangkok International Trade and Exhibition Centre. Some 400 printing, packaging, plastic and rubber manufacturers from 20 countries are joining the exhibition.
Messe Dusseldorf Asia, the organiser, expects the event to attract about 20,000 visitors over its four-day run.
Monday, August 24, 2009
Producers want more M&A deals
The paper industry needed more consolidation, the heads of Nordic papermakers UPM-Kymmene and M-real said yesterday, adding that they were ready to support a transformation of the sector.
The global paper industry has struggled for close to a decade to climb out of a slump caused by overcapacity, soft demand, low prices and weak earnings,heightening the need to consolidate.
But merger deals have been scarce throughout that period, and analysts said financing, valuation and competition issues would likely continue to constrain players' options.
UPM-Kymmene's chief executive Jussi Pesonen said his firm aimed to be an active player in the consolidation of an industry struggling to slash costs and close excess capacity.
"Definitely this industry needs to consolidate. Our role will be (that) of an active player," Pesonen, head of the world's third-largest firm in the sector by capacity, said at Reuters Paper and Packaging Summit.
"There will be swaps or share deals.We most probably won't see any cash deals in this industry for the next year or two," Pesonen told the summit at Reuters News bureau in Helsinki.
"We will participate only in those kinds of opportunities that create value for our shareholders and the company."
The current global downturn has further knocked demand for paper, as print advertising has dived.
"In the short term (the focus is on)restructuring, cost savings and balancing demand-supply," Pesonen said."This is a cost game. The lowest cost producer will always be better positioned."
Finnish packaging and paper producer M-real, whose sale last year of its graphic papers business to South Africa's Sappi for 750 million was the biggest deal in years in the sector, said it also aimed to support further consolidation.
"Our goal is to support consolidation of the European paper industry," M-real's chief executive Mikko Helander said at the summit.
"No one can be satisfied with the European paper industry's financial performance. Part of the difficulty is the industrial structure."
Helander said M-real was working hard on a strategic review that is seeking new solutions for its remaining uncoated fine paper and specialty paper units.
He said that such deals could be divestments, mergers, joint ventures or other unspecified options.
Helander said that M-real had taken big strides towards the structure that it wanted, with a heightened focus on packaging."We are moving in the right direction - the impact of paper has been reduced, the impact of packaging has increased."
Packaging now accounts for about 40% of revenues.
He said that in the future M-real would retain some papermaking but he said it remained to be seen how much paper production it would keep.
Moody's analyst Christian Hendker said sector consolidation was possible,but constrained by a lack of debt financing available, difficulties in valuing assets in a falling market, and potential competition issues.
The global paper industry has struggled for close to a decade to climb out of a slump caused by overcapacity, soft demand, low prices and weak earnings,heightening the need to consolidate.
But merger deals have been scarce throughout that period, and analysts said financing, valuation and competition issues would likely continue to constrain players' options.
UPM-Kymmene's chief executive Jussi Pesonen said his firm aimed to be an active player in the consolidation of an industry struggling to slash costs and close excess capacity.
"Definitely this industry needs to consolidate. Our role will be (that) of an active player," Pesonen, head of the world's third-largest firm in the sector by capacity, said at Reuters Paper and Packaging Summit.
"There will be swaps or share deals.We most probably won't see any cash deals in this industry for the next year or two," Pesonen told the summit at Reuters News bureau in Helsinki.
"We will participate only in those kinds of opportunities that create value for our shareholders and the company."
The current global downturn has further knocked demand for paper, as print advertising has dived.
"In the short term (the focus is on)restructuring, cost savings and balancing demand-supply," Pesonen said."This is a cost game. The lowest cost producer will always be better positioned."
Finnish packaging and paper producer M-real, whose sale last year of its graphic papers business to South Africa's Sappi for 750 million was the biggest deal in years in the sector, said it also aimed to support further consolidation.
"Our goal is to support consolidation of the European paper industry," M-real's chief executive Mikko Helander said at the summit.
"No one can be satisfied with the European paper industry's financial performance. Part of the difficulty is the industrial structure."
Helander said M-real was working hard on a strategic review that is seeking new solutions for its remaining uncoated fine paper and specialty paper units.
He said that such deals could be divestments, mergers, joint ventures or other unspecified options.
Helander said that M-real had taken big strides towards the structure that it wanted, with a heightened focus on packaging."We are moving in the right direction - the impact of paper has been reduced, the impact of packaging has increased."
Packaging now accounts for about 40% of revenues.
He said that in the future M-real would retain some papermaking but he said it remained to be seen how much paper production it would keep.
Moody's analyst Christian Hendker said sector consolidation was possible,but constrained by a lack of debt financing available, difficulties in valuing assets in a falling market, and potential competition issues.
Tuesday, August 18, 2009
SCG Paper enters premium market with "ideas"
SCG Paper, the country's largest integrated paper maker, has launched a new premium product under the "Idea Work" brand and aims to make Bt1 billion from this in the first year.
The brand was developed in order to diversify the market and meet different customer demands.
"Despite the slowdown this year, the market of office paper has been growing by 7 to 8 per cent per annum due mainly to the importance of computers in offices nowadays. Moreover, paper has become a tool in building an impressive image," SCG Paper's president Chaovalit Ekabut said.
The firm currently offers two office paper products: Idea Green and Idea Work.
"The segments targeted by the two products are clearly differentiated. 'Idea Green' attracts environmentally friendly users, while 'Idea Work' should create a new niche market by serving demands for premium paper products," marketing director Puttaporn Saengratanadej said.
He added that Idea Green hold a 10 per cent market sharer, and SCG Paper hopes its new product will hold 15 to 20 per cent of the market within a year.
He added that in Thailand last year, about 200,000 tonnes of office paper, at an estimated value of Bt6 billion, was consumed.
Chaovalit said the paper industry in the second half should not be any worse than it was in the second quarter of this year, when demand fell by 10 to 15 per cent compared to the same period last year.
"It is difficult to predict the market situation in the second half because it relies mainly on the global economy.
However, we believe that we have survived the bottoming out in the first quarter, when demand plunged by 20-25 per cent year on year," he said.
In addition, he said, the SCG paper plant in Vietnam had been up and running since the second quarter and is expected to produce around 50,000 tonnes this year. The plant has total production capacity of 220,000 tonnes per year.
Meanwhile, the price of short and long paper pulp has risen by US$100 (Bt3,398) per tonne from the start of this year, so short and long pulp now cost $500 and $600 per tonne respectively.
Although the price of oil has been on a continuous rise, he said the price of raw materials should not be too affected because it is more controlled by demand and supply.
The brand was developed in order to diversify the market and meet different customer demands.
"Despite the slowdown this year, the market of office paper has been growing by 7 to 8 per cent per annum due mainly to the importance of computers in offices nowadays. Moreover, paper has become a tool in building an impressive image," SCG Paper's president Chaovalit Ekabut said.
The firm currently offers two office paper products: Idea Green and Idea Work.
"The segments targeted by the two products are clearly differentiated. 'Idea Green' attracts environmentally friendly users, while 'Idea Work' should create a new niche market by serving demands for premium paper products," marketing director Puttaporn Saengratanadej said.
He added that Idea Green hold a 10 per cent market sharer, and SCG Paper hopes its new product will hold 15 to 20 per cent of the market within a year.
He added that in Thailand last year, about 200,000 tonnes of office paper, at an estimated value of Bt6 billion, was consumed.
Chaovalit said the paper industry in the second half should not be any worse than it was in the second quarter of this year, when demand fell by 10 to 15 per cent compared to the same period last year.
"It is difficult to predict the market situation in the second half because it relies mainly on the global economy.
However, we believe that we have survived the bottoming out in the first quarter, when demand plunged by 20-25 per cent year on year," he said.
In addition, he said, the SCG paper plant in Vietnam had been up and running since the second quarter and is expected to produce around 50,000 tonnes this year. The plant has total production capacity of 220,000 tonnes per year.
Meanwhile, the price of short and long paper pulp has risen by US$100 (Bt3,398) per tonne from the start of this year, so short and long pulp now cost $500 and $600 per tonne respectively.
Although the price of oil has been on a continuous rise, he said the price of raw materials should not be too affected because it is more controlled by demand and supply.
Eucalyptus debate continues
The impact of farming eucalyptus trees on Thailand's ecosystem remains a highly controversial topic for agriculturists, academics and state officials.
Some academic research says eucalyptus plantations have a devastating effect on the environment as they dry up groundwater reserves and leach vast quantities of nutrients from the soil.
But officials and the pulp and paper industry see the tree as a lucrative cash crop that could help reduce farmers'poverty levels.
"There have been studies that say the [eucalyptus] tree has no adverse effects on soil fertility and water levels.The farmed tree business is a source of additional income that also adds green areas to the land," said Charnvit Jarusombathi, senior executive vice-president of the pulp and paper company Advance Agro Plc (AA).
AA has encouraged farmers to grow eucalyptus for 19 years to supply wood chips for its pulp and paper mills.
In 2002, the company heavily promoted eucalyptus as a paper crop and suggested farmers grow the trees around the borders of their rice fields.
Today, some 1.2 million rice farmers grow paper trees in such a manner. The crop provides a supplementary income of about 16,000 baht a year for 20 rai of rice growing 1,600 trees.
Recent reseach conducted by Kasetsart University and the Thailand Research Fund says growing eucalyptus trees in rice fields has less impact on soil and water quality growing them as a standalone crop. These results support other research findings that suggest growing trees for pulp as a mixed crop is less damaging to the environment than as a single, unrotated crop.
AA has more than 100 breeders to develop high-yield tree varieties tailored to meet local climatic and soil conditions.It has tested more than 2,500 eucalyptus varieties to create hybrids that produce high yields, are insect- and droughtresistant, and can be harvested in three to five years, said Mr Charnvit.
As part of its eucalyptus promotion strategy, AA provides farmers with 101 free saplings each and guarantees to buy back the trees three years after planting for 30 baht each.
The company will also allow farmers with bigger land plots to take as many free saplings as they like, to be bought back at 30 baht each three years later.
But the most popular scheme for is to buy saplings at five baht each, and sell the wood back to AA at prices guaranteed between 55 and 70 baht per tree.
"Participants of the first two schemes bear no cost but have used their workforce to take care of the trees. However,all participants get technical assistance from the company," said Mr Charnvit.
At present, there are 175 million paper trees grown on rice and cassava plantations nationwide. Most are in the northeastern provinces. AA plans to increase the figure to 500 million by 2012.
The company expects its farmed-tree business to produce about 580,000 tonnes of short-fibre pulp this year for its two paper manufacturing plants.
The plants also use imported longfibre pulp to annually make about 600,000 tonnes of Double A-brand writing paper.
AA distributes its products in more than 100 countries, and the firm has with 18 representative offices overseas.
Writing paper is the company's major revenue source.
AA forecasts revenue of 20-21 billion baht this year, on a par with 2008. Exports will account for about 55% of income.
The company earlier reported plans to build a third paper mill to increase its annual capacity to more than 1 million tonnes.
But the initiative is on hold because of the downturn, said Mr Charnvit.
Last year 542,694 tonnes of writing paper was sold domestically, down 15%from the year before, according to Industry Ministry figures.
The sector showed improvement in the first quarter, when sales rose nearly 8% year-on-year to 62,450 tonnes.
Some academic research says eucalyptus plantations have a devastating effect on the environment as they dry up groundwater reserves and leach vast quantities of nutrients from the soil.
But officials and the pulp and paper industry see the tree as a lucrative cash crop that could help reduce farmers'poverty levels.
"There have been studies that say the [eucalyptus] tree has no adverse effects on soil fertility and water levels.The farmed tree business is a source of additional income that also adds green areas to the land," said Charnvit Jarusombathi, senior executive vice-president of the pulp and paper company Advance Agro Plc (AA).
AA has encouraged farmers to grow eucalyptus for 19 years to supply wood chips for its pulp and paper mills.
In 2002, the company heavily promoted eucalyptus as a paper crop and suggested farmers grow the trees around the borders of their rice fields.
Today, some 1.2 million rice farmers grow paper trees in such a manner. The crop provides a supplementary income of about 16,000 baht a year for 20 rai of rice growing 1,600 trees.
Recent reseach conducted by Kasetsart University and the Thailand Research Fund says growing eucalyptus trees in rice fields has less impact on soil and water quality growing them as a standalone crop. These results support other research findings that suggest growing trees for pulp as a mixed crop is less damaging to the environment than as a single, unrotated crop.
AA has more than 100 breeders to develop high-yield tree varieties tailored to meet local climatic and soil conditions.It has tested more than 2,500 eucalyptus varieties to create hybrids that produce high yields, are insect- and droughtresistant, and can be harvested in three to five years, said Mr Charnvit.
As part of its eucalyptus promotion strategy, AA provides farmers with 101 free saplings each and guarantees to buy back the trees three years after planting for 30 baht each.
The company will also allow farmers with bigger land plots to take as many free saplings as they like, to be bought back at 30 baht each three years later.
But the most popular scheme for is to buy saplings at five baht each, and sell the wood back to AA at prices guaranteed between 55 and 70 baht per tree.
"Participants of the first two schemes bear no cost but have used their workforce to take care of the trees. However,all participants get technical assistance from the company," said Mr Charnvit.
At present, there are 175 million paper trees grown on rice and cassava plantations nationwide. Most are in the northeastern provinces. AA plans to increase the figure to 500 million by 2012.
The company expects its farmed-tree business to produce about 580,000 tonnes of short-fibre pulp this year for its two paper manufacturing plants.
The plants also use imported longfibre pulp to annually make about 600,000 tonnes of Double A-brand writing paper.
AA distributes its products in more than 100 countries, and the firm has with 18 representative offices overseas.
Writing paper is the company's major revenue source.
AA forecasts revenue of 20-21 billion baht this year, on a par with 2008. Exports will account for about 55% of income.
The company earlier reported plans to build a third paper mill to increase its annual capacity to more than 1 million tonnes.
But the initiative is on hold because of the downturn, said Mr Charnvit.
Last year 542,694 tonnes of writing paper was sold domestically, down 15%from the year before, according to Industry Ministry figures.
The sector showed improvement in the first quarter, when sales rose nearly 8% year-on-year to 62,450 tonnes.
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