NTPM to increase output
Company investing US$30mil in Malaysia and Vietnam facilities
NIBONG TEBAL: NTPM Holdings Bhd is investing over US$30mil to expand its tissue paper production facilities in Malaysia and Vietnam for the 2019 financial year.
Group managing director Lee See Jin said the bulk of the budget, about two thirds, went towards the expansion of the Vietnam facility.
“The new production line for the Vietnam facility, which is being installed currently, would be ready to commence production in May,” hesaid.
In Malaysia, the group is expanding the Nibong Tebal facility.
“The new line for Nibong Tebal, which had been installed, commenced production in November 2018.
“It now has the capacity to produce up to 110,000 tonnes per year compared with 90,000 tonnes previously,” Lee said.
In Bentong, the group has another plant with the capacity to produce 10,000 tonnes of tissue paper yearly.
“Once the expansion in Vietnam is completed, the group would have the capacity to produce 170,000 tonnes of tissue paper annually, with an estimated value of RM900mil,” he added.
According to Lee, the global tissue paper market is expected to grow at a compounded annual growth rate of close to 6% from 2018 to 2022.
“Factors such as the growing population and increasing awareness about hygiene in the developing countries will have positive influence on the global tissue paper market.
“The key focus in 2019 is to increase production to fulfil the increasing demand in South-East Asia and other export markets,” Lee said.
Lee added that the price of pulp, which rose to US$850 per tonne in September 2018 from US$550 per tonne in early 2017, had reduced the group’s net profit despite a 10% increase in selling prices.
“However, in December, the price of pulp had dropped to about US$760 per tonne.
“We hope to see a further reduction in price. This would help to lower our production cost,” he added.
According to Lee, the group is not anticipating its performance to improve in the 2019 financial year ending April 30 compared to 2018.
“This is due to the higher prices of pulp and other petroleum-based materials, both of which have impacted our margins.
“We expect 2019 performance to be flat compared with 2018.
“Moving forward into 2020, we are optimistic about our new tissue production capacities,” he said.
According to Lee, NTPM is also looking into ways to strengthen its customer base and improve distribution channels.
“We are also exploring the development of new paper products. (This would give us) the opportunity to venture into fresh business segments which would bring about some level of synergy,” he said.
On expansion: NTPM plans to expand its plant in Nibong Tebal.