Build a new factory at home and abroad paper leading box board corrugated paper production capacity is quietly transferred

Papermaking leaders at home and abroad are in Southeast Asia

According to Philippine media reports recently, the Philippines United Pulp and Paper (UPPC) will invest 8.5 billion Philippine pesos (about 165 million US dollars) to build a new corrugated paper machine with an annual capacity of 220,000 tons, which is scheduled to be put into production in November 2020.

The project was approved by the Philippine Board of Investments on April 16. The project will be located in Calumpit, Bulacan Province, and the products are not only intended for local consumption, but also for export to overseas markets.

UPPC was established in 1969 and is currently a subsidiary of SCG Thailand. According to Fastmarkets RISI data, UPPC currently has two paper machines in Calumpit, with a combined capacity of about 230,000 tons of corrugated paper per year.

The machine is just one of many new projects for box board corrugated paper in Southeast Asia. According to incomplete statistics of the paper industry news, the new production capacity of wrapping paper and recycled pulp announced by China's main wrapping paper enterprises in Malaysia and Laos has reached 6-7 million tons/year, but local paper enterprises in Southeast Asia and investors from other countries and regions are also increasing investment in Southeast Asian countries.

1. Japan jointly acquired 25% of a carton factory in Malaysia

Early last year, Japan United acquired a 25% stake in United Packaging Malaysia Pte LTD. United Packaging Malaysia Pte Ltd is a corrugated box company based in Shah Alam, near Kuala Lumpur, funded by Thai Containers Group Co Ltd. Upon completion of the acquisition, RPM will become a wholly owned subsidiary of Rengo. The corrugated packaging business in Southeast Asia, including Malaysia, will serve as an important strategy for Japan's joint "general packaging industry" overseas business, and the alliance also said it will further strengthen the supply system in the region.

2. Japan's Oji Paper Holdings will build a new plant in Malaysia

GS Paperboard & Packaging (GSPP), controlled by Japan's Prince Paper, will build a new 1,445 tonnes/day box board corrugated machine in Malaysia, which is expected to start production in 2021. Following the completion of the new investment, Prince's corrugated board production capacity in Malaysia has grown from the current annual output of 300,000 tonnes to more than 750,000 tonnes.

3. Japan's Marubeni plans to build a box board corrugated paper project in Vietnam

Japan's Marubeni Co., Ltd. announced in January this year a new 350,000 tons/year box board corrugated paper project in Vietnam's Bati - Vtau province, which is expected to be put into production in the second half of 2020 fiscal year.

4. Nine Dragons is planning to set up factories in Malaysia and India

Zhang Yin, chairman of Nine Dragons Paper Co., LTD., said that his company does paper raw material processing in Malaysia's Port Klang Trade zone, and is ready to invest in the construction of an intelligent and modern paper mill.

The Malaysia plant is the second overseas investment announced by Nine Dragons Paper this year. On March 2, Nine Dragons signed a Memorandum of Understanding (MOU) with India's Maharashtra Industrial Development Corporation. Under the MOU, Nine Dragons will build the new plant in Maharshtra, invest about Rs 450 crore (about $630 million) over five years and create 10,000 jobs.

5. Liwen Paper invested HK $5.1 billion in construction projects in Malaysia

In October last year, Leven Paper announced an investment of HK $5.1 billion to build a new capacity of 700,000 tonnes of wrapping paper and 550,000 tonnes of recycled pulp in Sepang, Selangor, Malaysia, to meet the growing demand for paper in Southeast Asia and China.

According to the plan, after reaching the project, 700,000 tons of wrapping paper and 550,000 tons of pulp can be produced annually. This will be Liven's second overseas production base outside China after Vietnam. At present, the first phase of Liwen Paper project is under construction.

6. Jingxing Paper builds wrapping paper project in Malaysia

In January this year, Zhejiang Jingxing announced the construction of a new plant in Selangor, the new project is 43 kilometers away from Port Klang and 52 kilometers away from Kuala Lumpur International Airport. The total investment of this project is 299.4 million US dollars (205,089.00 yuan), mainly using imported American waste paper as raw materials to produce waste pulp board and packaging base paper, with an annual output of 800,000 tons of waste pulp board and 600,000 tons of packaging base paper, including 355,000 tons of box board paper and 245,000 tons of corrugated paper. The project is planned to be constructed in two phases with a construction period of 4 years.

7. Zhejiang Xinshengda built three coated white board paper production lines in Malaysia

On March 27, Hangzhou Blue Sea Yongchen Technology Co., Ltd. and Xinshengda Holding Group held a signing ceremony for the general contract of the Malaysia project. Zhejiang Xinshengda new plant is located in Kedah, Malaysia, the first phase of the construction of three coated white board production lines, a total annual capacity of 700,000 tons, is planned to be put into production in 2020.

Vietnam will become the largest consumer of box board corrugated paper in ASEAN

In addition to the impact of China's waste paper import policy, the capacity expansion of the wrapping paper and paperboard industry in Southeast Asia in recent years has benefited from economic growth, especially the development of processing manufacturing and fast-moving consumer goods industries, as well as the rise of e-commerce has greatly driven the demand for packaging.

Vietnam's economic growth hit a 10-year high of 7.08 percent in 2018, and the Asian Development Bank's recently released Asian Development Outlook 2019 predicts that Vietnam's economic growth will reach 6.8 percent this year and 6.7 percent next year.

Announcing the new investment in Vietnam, Marubeni said demand for box board corrugated paper in Vietnam would grow by more than 10 per cent a year, outpacing Thailand, Indonesia and other countries. In addition, benefiting from stable economic growth brought about by a large number of foreign investment export industries, Vietnam is expected to become the largest consumer of box board corrugated paper in ASEAN countries in the first half of 2020.

In its 2018 annual results report, Fajar also said that Indonesia's consumer goods industry has attracted a lot of investment in recent years, and the food and beverage retail industry maintained a healthy development in 2018, which has brought consumer demand for wrapping paper and cardboard.

It is worth mentioning that, due to the reduction in the amount of waste paper imported from China, Fajar increased the export of wrapping paper to the Chinese market in 2018. According to the company's 2018 financial report, Fajar export sales accounted for 27% of the company's total sales, compared to 16% in 2017.