NTPM to in­crease out­put

Com­pany in­vest­ing US$30mil in Malaysia and Viet­nam fa­cil­i­ties

The Star Malaysia - StarBiz - - News - By DAVID TAN david­[email protected]­tar.com.my

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.

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