Paper mill lifts Kampot’s hopes
REPORTS of government approval for what could become the Kingdom’s first pulp and paper mill in Kampot province’s Teuk Chhou district have galvanised investment hopes and instilled a renewed sense of opportunity in the southwestern coastal province.
Last month, the Council for the Development of Cambodia (CDC) agreed to issue a final registration certificate for Shunying Pulp And Paper Co Ltd’s $504 million factory in Prek Tnaot commune’s Changhon village, noting that the plant would provide jobs for 2,261 locals.
Kampot provincial governor Cheav Tay told The Post on March 4 that new investment continues to pour into Kampot, even as the world remains beleaguered by the Covid-19 pandemic.
He said any development project will be a positive for the population and economic growth in the province, as well as Cambodia as a whole.
“I’m overjoyed with the number of investments Kampot province has received. No matter how small or large, these will create new jobs for the people and generate family income,” Tay said.
He said he did not know the
timeframe for the paper mill, noting that the decision had to be made at the national level given the project’s magnitude.
Kampot provincial Department of Agriculture, Forestry and Fisheries director Chan Rith said conditions in the province are particularly favourable for growing all sorts of crops.
“Kampot is a great location with potential for agriculture, agro-industry and tourism,” he said, pointing out that the paper mill will be located on the road from Kampot to Sihanoukville.
With no mills currently in Cambodia, the trees and
pulp used to make paper are exported as raw material to neighbouring countries.
Tek Sopheak, country manager of Paper Tree Investment (Cambodia) Co Ltd, a subsidiary of Thai-based Paper Tree Holding Co Ltd, is investing in more than 1,800ha of eucalyptus plantations in the Kingdom.
He said: “I hadn’t heard news of the company’s plans to build a paper mill in Cambodia, but as I see it, the investment has little chance of materialising anytime soon, given that Cambodia lacks the raw materials – especially eucalyptus – which would be the main material
needed for the factory.”
Eucalyptus trees take three to five years to reach market maturity, according to Sopheak. For the paper mill to be economically viable, the company must have 10,000ha at its disposal.
While eucalyptus provides the ideal fibre for paper, he suggested that sugar cane and acacia trees could provide a decent alternative.
According to Sopheak, his company currently buys raw eucalyptus timber at $25-30 per tonne, which it grinds into pulp and then sells to paper mills in Thailand for about $92 a tonne.
MEMBERS of the OPEC group of oil producers and allies were expected to raise output in a meeting on March 4, in response to a rebound in demand and prices.
While the so-called OPEC+ group is often at loggerheads over how much oil to pump to the market, a sudden plunge in prices triggered by the coronavirus pandemic led members to agree on a dramatic cut in output to underpin prices.
Now that vaccination campaigns are underway and demand from China, the world’s largest oil importer, has bounced back to pre-pandemic levels, the success of the meeting on March 4 will hinge on whether heavyweights Russia and Saudi Arabia can agree on a way forward.
“There is within the alliance a major difference of opinion on the capacity of the oil market to absorb new volumes” of crude, said Bjarne Schieldrop, chief commodities analyst at SEB research group.
The world’s second-largest crude producer after the US, Russia “leans for caution”, Schieldrop explained, while number three, Saudi Arabia, “defends the increase in supply”.
On the sidelines of a technical meeting on March 2, OPEC head Mohammed Barkindo pushed for middle ground when he said the cartel must emphasise “cautious optimism” given persistent risks from the pandemic.
During a meeting in January, the alliance of 23 oil exporters needed two tough days of talks to agree to gradually increase supply to the oil market.
While 7.125 million barrels per day (bpd) were withheld from the market last month, the cartel lowered that figure to 7.05 million bpd for this month, effectively supplying the market with an additional 75,000bpd.
Experts generally expect that OPEC+ will agree to release another 500,000bpd next month.
In addition, Saudi Arabia could flood the market with an extra one million bpd if it decides to drop an extra production cut it voluntarily took on to facilitate agreement and allow Russia and Kazakhstan to increase their own production.
Iran, Venezuela and Libya
have been exempt from OPEC’s quotas, while countries like Iraq and Nigeria have produced above quota for months, flouting the cartel’s agreement.
OPEC members are also monitoring any signs that US President Joe Biden might lift sanctions on Iran, which would allow Tehran to re-enter the global market and dramatically increase supply.
On March 3, the club assessed market conditions in its monthly meeting, held by video conference, but gave no statements to the media.
The videoconference summit on March 4 was set to be the second this year and was scheduled to start at 2:00pm (1300 GMT ) in Austrian capital Vienna, where OPEC has its headquarters.