ROADMAP FOR THE PAPER INDUSTRY IN PHILIPPINES (2014-2020) - - PowerPoint PPT Presentation

ROADMAP FOR THE PAPER INDUSTRY IN PHILIPPINES (2014-2020) _________________________________________

Ray N. Geganto

• Exec. Director

Philippine Paper Manufacturers Association Inc. (PPMAI)

formerly Pulp &Paper Manufacturers Assoc. of the Phils. (PULPAPEL)

The Phil. Paper Manufacturers Assoc. Inc. (PPMAI): (formerly Pulp and Paper Assoc. of the Phils.(PULPAPEL)

MEMBERS MILLSITE

• 1. Trust International Paper Corp. (TIPCO)

Mabalacat, Pampanga

• 2. United Pulp and Paper Co. (UPPC)

Calumpit, Bulacan

• 3. Bataan 2020 Inc.

Samal, Bataan; Baesa, Q.C.

• 4. Container Corp. of the Phils. (CCP)

Balintawak, Q.C.

• 5. Noahs Paper Mill, Inc.

Marikina

• 6. Liberty Paper Inc.

Valenzuela City

• 7. Paperland, Inc.

Balintawak, Q.C.

• 8. Fiber Sorting Inc.
• 9. Asia Paper Ind. Corp.

10.St. Thomas Paper Corp.

• 11. Hansson Paper Phils. Corp.
• 12. Vanson Paper Ind. Corp.

Pampanga Trece Martires, Cavite

• Sto. Tomas, Batangas

Pasig, NCR Valenzuela, NCR

What is Paper and Paperboard?

Paper Industry in Phils. -Current State and Background

2001

2010

2012 Est.

Historical Trend % p.a.

• No. of Paper Mills

43

27

24 Industry Capacity, ‘000 Tons 1,580

1,297

1,200

• 2.2%

Production 1,056

1,038

825

• 2%

Imports 533

961

1,100

+9.5%

Exports 139

165

110

• 2%

CONSUMPTION 1,450

1,834

1,810

+2.2%

Paper &Board per Capita Consumption 16

20

19

+2%

Paper Mills remaining in Operation (2012)

• 1. Trust International Paper

Pampanga Newsprint, Printing &Writing

• 2. United Pulp and Paper

Bulacan Containerboards

• 3. Bataan 2020

Bataan, Q.C. Pr &Wr, Containerboards,Bag paper

• 4. Container Corp. of Phils.

Quezon City Containerboards, Cartonboard

• 5. Noahs Paper Mill

Marikina Pr &Wr, Bag paper

• 6. Liberty Paper

Valenzuela City Containerboards

• 7. Fiber Sorting

Pampanga Cartonboard, Containerboard

• 8. Asia Paper Ind.

Cavite Printing &Writing

• 9. Paperland / Valley

Quezon City Cartonbd, Containerbd, Bagpaper

• 10. St. Thomas Paper

Batangas Containerboard

• 11. Cascades / Malinta

Cavite Containerboards

• 12. Multipack/Certified Mills

Laguna Containerboards, Brown wrapping

Paper Mills remaining in Operation (2012)

• 13. Danao Paper

Cebu Containerboards

• 14. Hansson

Pasig Pr &Wr, Brown packaging paper

• 15. Hansson (Menzi)

Bukidnon Packaging

• 16. Quanta

Pampanga Tissue

• 17. Vanson

Valenzuela Pr &Wr, Cartonboard

• 18. Fedco

Laguna Pr &Wr, Cartonboard

• 19. Alliance

Valenzuela City Pr &Wr, Cartonboard, Wrappings

• 20. Golden Swan

Cavite Containerboard

• 21. Rosario

Valenzuela Brown wrapping/packaging paper

• 22. Globe Paper

Malabon Pr &Wr, Brown wrapping/packaging

• 23. Rural Paper
• 24. World Class Paper

Bulacan Pampanga Pr &Wr, Brown packaging Packaging, Printing &Writing

Paper mills Closed /Shutdown –

from early 90’s-2011

• 1. PICOP Resources *

Surigao Kraftlinerbd, NP, G’wood printing

• 2. SCA Hygiene

Cavite Tissue and sanitaries

• 3. Kimberly-Clark

Laguna Tissue and sanitaries

• 4. Paper City

Valenzuela Pr &Wr, Cartonboard

• 5. Aclem

Laguna Pri &Wr, Tissue, Brown wrapping

• 6. Manila Paper Mills

Quezon City Pr &Wr, Containerboard, Wrapping

• 7. Sunrise

Bataan Cartonboards, Containerboards

• 8. Dasmarinas Paper

Cavite Cartonboards, Containerboard

• 9. East Asia Paper

Cavite Tissue and Sanitaries

• 10. Arco

Las Pinas Containerboard, Brown wrapping

• 11. Isopack

Laguna Containerboards

• 12. Worldwide

Paranaque,Q.C. Brown wrapping, Cartonboard *Integrated Pulp-Paper Mill

PICOP Millsite in Surigao del Sur _____________________________________________

Paper mills Closed /Shutdown –

from late 80’s-2011

• 13. Rustan Packaging *
• 14. Phil. Paper Mills
• 15. 3rd Wind Paper
• 16. Chanmeco
• 17. Asgard
• 18. Paramount

Iligan Tondo, Manila Pampanga Valenzuela Novaliches Valenzuela Cartonboards,Containerboard Cartonboard, Containerboard Tissue and Sanitaries Containerboard, Cartonboard Containerboard, Cartonboard Printing & Writing, Brown wrapping

• 19. Fortuna

Valenzuela Containerboard, Wrapping, Tissue

• 19. Prince / Sn Fernando

Pampanga Printing &Writing

• 20. Oxford Paper

Laguna Pr &Wr, Containerboard,Wrapping

• 21. PDM

Laguna Specialty Paper *Integrated Pulp-Paper mill

Pulp Mills in Philippines

In operation as of 2010:

Site Capacity Product

• 1. Canlubang Pulp

Laguna 3,600 Tons/yr Abaca Market pulp

• 2. Alindeco

Albay 12,500 Abaca Market pulp

• 3. Specialty Pulp Manuf

Leyte 12,000 Abaca Marketpulp

• 4. Pulp Specialists Inc.

Leyte 5,000 Abaca Market pulp

• 5. Newtech Pulp

Lanao 8,500 Abaca Market pulp CLOSED / Shutdown from 90’s -2010

• 6. PICOP Resources *

Surigao 110,500 T/yr Kraft,Mech’l pulp

• 7. Cellophil Resources

Abra 65,000 Kraft Market pulp

• 8. Isarog

Albay 9,000 Abaca market pulp *Integrated to Paper mill.

THE PAPER INDUSTRY ALSO HAS CLOSE LINKAGES TO:

• Technical Association of the Pulp and Paper

Industry (Tappi-Phils.)

• DOST – Forest Products Research and

Development Institute

• DTI – Bureau of Product Standards
• DENR – Environmental Management Bureau
• Printing Industries Development Foundation
• UPLB College of Forestry and Natural Resources

Problems of the Pulp and Paper Industry in Phils. ________________________________________

• RAW MATERIAL

– Local wastepaper quality low (poor yield, inefficient operation) – Local wastepaper supply is inadequate (high price) – Imported wastepaper supply getting tight – No local source of pulp.

• HIGH COSTS OF ENERGY

– Electricity (requires investment for lower-cost power and energy-efficient technologies) – Fuel (requires investment to convert to coal, biomass and fuel- efficient technologies)

Paper Industry Fiber Raw Material Demand

2010 2011 Wastepaper, Local-sourced 970,000 854,500

• White/Deinking grades

250,000e

• Brown/Packaging grades

604,500

Wastepaper, Imported 120,400 248,000

• White/Deinking grades

200,000e

• Brown/Packaging grades

48,000

Wastepaper Totals 1,090,400 1,102,500 Pulp (all imported since 2010) 67,250 49,820

Problems of the Pulp and Paper Industry in Phils. –2 ________________________________________

• MANY PAPERMACHINES OLD AND SMALL

– Small mills costlier to operate than bigger mills – Difficult to rehab, maintain, upgrade (frequent breakdown) – Some mills not originally intended to run on 100% wastepaper – Lack equipment to handle low-grade wastepapers.

• FLOODING OF DOMESTIC MARKET WITH IMPORTED PAPER

– Tariff duties removed/minimized – Misclassification in imports – Low valuation of certain grades paper.

Problems of the Pulp and Paper Industry in Phils. –3 ________________________________________

• ENVIRONMENTAL REGULATIONS GETTING MORE STRINGENT

– Mills suffering cash flow lack low-ROI funds to install more anti- pollution devices – Mills must invest in cleaner production technologies (expensive) – To improve environmental performance – need highly-technical professionals or training for its personnel.

• SKILLED AND PROFESSIONAL MANPOWER DIMINISHING

– Overseas jobs pull workers from paper industry – Other industries offering more attractive compensation – Fast turnover / high cost of training – Declining # of engineering graduates going to pulp and paper industry.

PROPOSED SOLUTIONS AND LONG-TERM STRATEGIES _____________________________________________

• RAW MATERIAL

– Limit export of OCC due to supply is inadequate – Invest on technologies that improve wastepaper utilization – Establish local production of woodpulp (enable existing paper mills to make higher-grade paper &board) – Develop agri-wastes and annual crops as sources of non-wood fibers (supplemental virgin pulp for existing paper mills).

Recovery Rate of Selected Countries

Selected Countries Recovery Rate as of 2011 USA 66.8% Japan 76.9% World 57.2% Malaysia 54.1% Indonesia 53.5% Philippines 49.9% China 45.0%

Source : RISI World Pulp and Recovered Paper Forecast

PROPOSED SOLUTIONS AND LONG-TERM STRATEGIES -2 _____________________________________________

• HIGH ENERGY COSTS

– Upgrade existing mills to energy-efficient technologies – Encourage investments in co-gen plants – JV with new power projects – Encourage investments in bio-mass and waste- burning power plants or boilers – Support projects based on clean and renewable energy.

PROPOSED SOLUTIONS AND LONG-TERM STRATEGIES -3 _____________________________________________

• OLD AND LOW-CAPACITY PAPERMILLS

– Projects and programs to improve tonnage and productivity – Retool or replace small machines to shift to higher-value paper products – Make available local virgin pulp to reinforce low- grade recycled fiber and enable production of better-quality paper and board.

PROPOSED SOLUTIONS AND LONG-TERM STRATEGIES -4 _____________________________________________

• IMPORTED PAPER FLOODING DOMESTIC

MARKET

– Set up better controls vs. misdeclaration of imports – Defer further reduction of remaining tariff duties

• n paper and paperboard

– Help existing mills establish capability to make higher-grade paper products.

Paper products we should make

PROPOSED SOLUTIONS AND LONG-TERM STRATEGIES -5 _____________________________________________

• ENVIRONMENTAL ASPECTS

– Incentives for investment in clean technologies – Support for upgrading wastewater treatment plants and new pollution control devices.

• MANPOWER ASPECTS

– Support for training and manpower development programs, esp. intended at improving process efficiencies and environmental performance.

Market Growth by Grades of Paper/Paperboard

2011 Local Product- ione Imports Total Market

Segment Share of Market %

Projected Growth

(2011-2016)

Printing &Writing 260,000 196,400 456,400 26% +1% Newsprint 170,000 42,000 212,000 12%

• 2%

Packaging P & B 466,200 403,300 869,500 49% +3.5% Tissue/Sanitaries 30,000 65,000e 95,000 5% +4% Other Paper &Board 24,000 115,800 139,800 8% +2% TOTALS 950,200 822,500 1,772,700* +2.3%

*with exports

MARKET DRIVERS OF GROWTH -PULP &PAPER INDUSTRY

_____________________________________________

• Growth in Exports (Electronics, Fruits, Handicrafts, Garments,

Furniture)

• Growing Local Consumption (Processed Food, Appliances,

Consumer goods) due to population growth and rising purchasing power (OFW,Tourism,BPO and service sectors)

• Rise of Small &Med. enterprises, incl. provincial, agri- areas
• Growth in Education, literacy, cultural levels
• Growth in Entertainment, Sports, Fashion industries
• Expansion in domestic retail trade and inter-island commerce

(Packaging &documentation of goods moving frm provincial producers to consuming cities,towns)

SPECIFIC PROJECTS AND PROGRAMS RECOMMENDED _____________________________________________

• RAW MATERIAL (5-8 years)

– Estab. Mechanized wastepaper sorting plants in urban areas – Develop industrial tree plantations of fast-growing species (5- years gestation) in logged-over and denuded areas – Agro-Forestry/Tree farmer cooperatives for privately-owned lands – Social Forestry for informal settlers and indigenous peoples – Encourage contract-tree growing for wood-based industries (timber, biomass energy, paper pulp, chip exports). – Invest in wood-based market pulp mill

• Proposed site : Northeastern Mindanao (Caraga, Reg.11)

FOREST-BASED PULPMILL PROJECT FOR PHILS. _____________________________________________

• Proposed Capacity : 330,000 Tons/Year (1,000 Tons/day)
• Product Grades

: Market Pulp (Hardwoods)

• Target Market :

– 150,000 Tons/year Local demand (Bleached and Unbleached Pulps) – 180,000 Tons/year Exports (Bleached Hardwood Pulp)

• Recommended Site : Eastern Mindanao
• Requires foreign equity investments to

– help fund the Capital for the Project – gain access to Export market – acquire modern technologies in paper pulp manufacturing

• Cont’d

FOREST-BASED PULPMILL PROJECT FOR PHILS. –p.2 _____________________________________________

• Fast-growing species :

– Mostly Acacia Mangium, Eucalyptus hybrid spp, Gmelina, etc.

• Reforestation / re-planting cycle : 5 – 7 years
• Areas to be developed into sustainable forests:

– Industrial Tree Plantation : 20,000 hectares – Agro- and Social Forestry : 30,000 hectares

SPECIFIC PROJECTS AND PROGRAMS RECOMMENDED _____________________________________________

• PRODUCT UPGRADES / IMPORTS REPLACEMENT (3-5 years)

– Invest in agri waste-based pulp mills (using rice straw, bagasse, corn stalk, palm

• il /pineapple/tobacco wastes) – 50-100 Tons/day
• Proposed site : Northern/Central Luzon, Negros, Mindanao

– Invest in non-wood pulpmills utilizing annual plants (abaca, banana, kenaf, bamboo) – 30-50 Tons/Day

• Proposed site : Bicol, Southern Luzon, Leyte, or Mindanao.

– Invest in non-integrated kraftliner paper mill to serve the needs of fruit exporters and high-quality packaging requirements (300-500 Tons/day)

• Proposed site : General Santos, Davao or Cagayan de Oro

UPGRADE FPRDI-DOST R&D CAPABILITIES TO SUPPORT:

• Program to acquire new testing facilities for FPRDI Lab

(Est. Budget P10 Million)

• Project to reactivate/replace the Pilot paper machine

at Los Banos, as Center for research and training of industry personnel and engineering students.

• Program to strengthen the cooperation in Research

and Lab. services at DOST-FPRDI with the pressing technical requirements of the Paper industry.

• Establish formal Training programs for Paper industry

personnel and new Engineering graduates with both FPRDI-DOST and TESDA.

Jobs generation aspects of Pulp &Paper Mills

Employment/Livelihood generation = Direct Indirect Integrated Pulp-Paper Mill, 500-TPD 1,300 30,000 Recycle-based Paper Mill, 300-TPD 250 87,500 Market Pulp Mill, 1,000 TPD 500 140,000

8+20, 2.7+6

PAPER INDUSTRY ROADMAP – Goals and Programs _____________________________________________

• Short-Term (2014-2016):

– Raise local paper recovery rates to 60% – Discourage exports of local wastepaper – Launch large-scale tree plantations for pulp,timber,biomass – Plan and begin the engineering for a modern pulpmill project – Upgrade technologies at existing mills – Build local capabilities to produce higher grades of paper – Establish smaller pulpmills for agri-wastes and annual crops – Upgrade the research and training facilities of FPRDI.

• Cont’d

PAPER INDUSTRY ROADMAP – Goals and Programs _____________________________________________

• Medium-Term (2017-2022):

– Further raise paper recovery rates to 70% – Construction and startup of wood pulpmill – Upgrade/expand existing mills to produce Hi-grade paper – Expand forest plantations to support pulpmill project – Continue upgrading the production technologies of old mills

• Long-Term (2023-2030):

– Expand production of non-wood pulp and paper – Retire old machines and consolidate operations of small mills – Expand Exports of pulp

• Cont’d